1                This working paper describes the user charges assessment for National Parks and Wildlife Services and provides information on its impact on GST revenue distribution for the 2007 Update.  The development of the assessment method is discussed in Volume 3 of the 2004 Review Working Papers.

Description of the category

2                The National Parks and Wildlife Services user charges category comprised user charges collected from fees and charges associated with the administration, regulation, planning, support and management of national parks and wildlife services.  More specifically, the category included fees and charges collected from visitor entry fees, camping fees, publication sales, use of recreation facilities, leases and licenses, and fauna permits and licenses.

3                Table 1 shows average user charges for the last six financial years for National Parks and Wildlife Services.  In 2005-06, average user charges of $4.68 per capita represented 0.69 per cent of total average user charges and 15.2 per cent of category average expenses.

Table 1            National Parks and Wildlife Services User Charges, 2000-01 to 2005-06

Assessment Method

Description of the assessment

4                The National Parks and Wildlife Services user charges assessment for the 2007 Update was carried out using one component: user charges.

5                In the 2006 Update National Parks and Wildlife Services user charges were assessed using the proportion of the population visiting national parks discounted by 50 per cent.  For the 2007 Update the Commission discounted the impact of visitor number data by a further 50 per cent because of ongoing concerns about data comparability.

Assessment structure

6                Table 2 summarises the assessment structure for the 2006 Update.

Table 2            National Parks and Wildlife Services User Charges assessment structure for the 2007 Update, 2005-06

Component	Component weight	Factors	Basis of calculation
	%
Revenue raising capacity	100.00	User charges factor	Based on the proportion of the population visiting national parks, weighted by 50 per cent.

Calculating the category factor

7                Table 3 summarises the components, component weights and disability factors assessed for this category for the last year of the 2007 Update.  It shows the calculation of the category factor for 2005-06.

Table 3            National Parks and Wildlife Services User Charges, derivation of category factor, 2007 Update, 2005-06

Note:    Category factor is the sum of the weighted component factors.  It equals A.

Note:   For each component, the component factor is calculated using the formula in the following paragraph.  The weighted component factor is the component factor multiplied by the component weight.  This is then population weighted to ensure that the sum of assessed expenses equals average expenses.

8                The category factor was calculated as follows:

category factor

=

100.0 [user charges factor]

9                The contribution to the category factor was calculated as the component weight (the percentage in the table) multiplied by the component factor (the bracketed terms in the formulas).  The component's contribution to the category factor was scaled to ensure the sum of assessed user charges equalled average user charges.

Results for 2005-06

10            Table 4 shows actual, average and assessed user charges per capita and the revenue raising capacity ratios for 2005-06.  The revenue raising capacity ratios are equivalent to the category factor show in Table 3.

Table 4            National Parks and Wildlife Services User Charges, assessment results, 2005-06

(a)        The revenue raising capacity ratio is the ratio of assessed user charges per capita to average user charges per capita.

11            Table 9 at the end of this working paper shows the actual, average and assessed user charges for each State for all years of the 2007 Update.

12            Figure 1 illustrates the actual, average and assessed user charges for National Parks and Wildlife Services for 2005-06.

Figure 1          National Parks and Wildlife Services user charges, revenue per capita - assessed, actual and average, 2007 Update, 2005-06

Contribution to GST revenue distribution

13            Table 5 shows the category's contribution to the distribution of GST revenues and health care grants (hereafter GST revenue) implied by the 2007 Update.

Table 5            National Parks and Wildlife Services User Charges - contribution of assessment to GST revenue distribution, 2007 Update

Differences from equal per capita

14            The category factor reflected the following on a State by State basis.

·                New South Wales — New South Wales had the largest positive GST revenue redistribution, due to the below-average proportion of its population visiting national parks.

·                Victoria —GST revenue redistribution was negative for Victoria because the proportion of its population visiting national parks was slightly above average.

·                Queensland — Queensland had a neutral GST revenue redistribution because it had an average proportion of its population visiting national parks.

·                Western Australia — The negative GST revenue redistribution for Western Australia was due to the above-average proportion of its population visiting national parks.

·                South Australia — South Australia had a below-average proportion of its population visiting national parks and, therefore, a positive GST revenue redistribution.

·                Tasmania — Tasmania had a negative GST revenue redistribution because it had an above-average proportion of its population visiting national parks.

·                The ACT — The negative GST revenue redistribution for the ACT was due to the above-average proportion of its population visiting national parks.

·                The Northern Territory — The Northern Territory had a relatively large negative GST revenue redistribution due to the above-average proportion of its population visiting national parks.

Changes since the 2006 Update

Effect of assessment on the distribution of GST revenue

15            Table 6 shows the redistribution of GST revenue resulting from the assessments in the 2006 Update and the 2007 Update.  It also shows the sources of change.

16            Changes in the distribution of GST revenue between the 2006 Update and the 2007 Update were brought about because the Commission:

·                used revised user charges data and other revised data in updating factor calculations for the years 2000-01 to 2004-05; and

·                replaced 2000-01 user charges and factors with those of 2005-06 to move forward the five-year period on which GST revenue distribution was based.  Moving the five-year period forward in this way ensures the assessments reflect recent trends in State priorities on the revenues raised and recent trends in State demographic and economic circumstances which affect their revenue raising capacity.

17            Compared to an equal per capita assessment, the 2007 Update National Parks and Wildlife Services user charges assessment redistributed $2.8 million to New South Wales and South Australia. This amount is $5 million less than in the 2006 Update, reflecting the decreased importance of the category in State budgets shown in Table 1.

Table 6            National Parks and Wildlife Services User Charges, effect of assessment on GST revenue distribution, 2006 Update to 2007 Update

(a)        Using the same pool and populations that were used to calculate the 2007 Update redistribution.

(b)       This figure shows the change in the amount redistributed among the States between the 2006 Update and the 2007 Update.  It does not necessarily equal the difference in the total redistribution from EPC between the two inquiries.

18            Table 7 shows the changes in GST revenue distribution attributable to changes in the user charges factor, arising from both revising data for 2000-01 to 2004-05 and replacing 2000-01 data with 2005‑06 data.

Table 7            National Parks and Wildlife Services User Charges, effect of assessment on GST revenue distribution by factor, 2006 Update to 2007 Update

Note:   The total change may not equal the total effect of revisions and updating on the previous table due to the effect of interactions between factors.

19            The reasons for the changes in GST revenue distribution were as follows.

Changes due to revising average user charges and factors for years 2000-01 to 2004-05

20            Revising average user charges.  Downward revisions were made to user charges, producing a decrease in the redistribution of GST revenue between the States.  This change increased the GST revenue shares of States assessed to have revenue advantages (category factors above one) between 2000-01 and 2005-06 —Victoria, Western Australia, Tasmania, the ACT and the Northern Territory.

21            Table 8shows the average user charges for the six financial years of this update and those of the previous update

Table 8            Average user charges used in the 2006 and 2007 Updates

22           

23            Revising category factors.  The revisions to category factors were due to two Commission decisions. The first was to discount the effect of the category factor by 50%. The second decision was to discount the effect of visitor numbers by 50% common to both the expense and user charges assessment for the National Parks and Wildlife category.  These discounts were introduced because while factors based on visitor numbers moved the allocation of GST revenue in the right direction, data on visitor numbers were not directly comparable across States.  Applying the discount to visitor numbers in the assessment period revised visitor numbers downwards.  Other revisions to category factors were caused by revisions to visitor number data supplied by the States. In combination, the discount and revisions reduced GST distributions for those States with revenue disadvantages (New South Wales, Queensland and South Australia) and increased distributions for the other States. 

24            As explained in the expenses section of the working papers, Queensland and the ACT revised their visitor numbers upwards and Western Australia revised its visitor numbers down. This resulted in a decrease in GST distribution for Queensland and the ACT and an increase in GST distribution for Western Australia.

25            In total, revisions to category factors decreased GST distributions for New South Wales and South Australia and increased distributions to the other States.

Changes in State circumstances - replacing 2000-01 with 2005-06 data

26            Replacing average user charges.  Between 2000-01 and 2005-06, per capita average user charges declined by 40.5 per cent, compared with an increase in the per capita GST pool of 43.1 per cent.  This made the category less important to the calculation of relativities, resulting in a lower redistribution of GST revenue.  This change decreased the GST revenue shares of the States assessed to have a revenue disadvantage (a category factor below one) in 2000-01 — New South Wales, Victoria and South Australia.

27            Replacing category factors.  Table 9 shows the actual user charges and implied revenue raising capacity ratios for 2000-1, the year that drops out of the assessment period, and 2005‑06, the year that comes into the assessment period.  It shows that the 2005-06 revenue raising capacity were higher than the 2000-01 capacity for Victoria, Western Australia and the ACT, driven by increased visitor numbers in those States.  Replacing the category factors reduced their shares of GST revenue by $1.4 million.  The shares of New South Wales, Queensland, South Australia, Tasmania and the Northern Territory increased when the factors were replaced.

Table 9            National Parks and Wildlife Services User Charges actual and assessed user charges, and capacity to raise user charges, 2000-01 and 2005-06

 

This chapter was prepared by the Expense — Transport section of the Commonwealth Grants Commission.  If you have any questions about its content please contact Stephen Tregea-Collett on (02) 6229 8838 or stephen.tregea-collett@cgc.gov.au.

 

Date: 23 February 2007

 

Table 10          Assessment of user charges, National Parks and Wildlife Services User Charges

Note:    Note:  ACT expenses may include municipal expenses. Attachment A, 2007 Update, RFCS for how State actual figures are compiled.