Super and social security

David Uren has a piece in the Australian today talking about the latest OECD taxation statistics (2011 – so somewhat out of date).

Looks like we’re getting softened up for (a) increases in taxation or (b) delays in tax cuts. This would be bad policy. The Abbott government needs to cut spending and then cut taxes and balance the budget at a lower level of GDP.

What really annoys, however, is this:

Australian personal income taxes are 10.2 per cent of GDP, which is a smaller share than any other OECD member except South Korea. The average (including compulsory social security contributions common throughout Europe) is 18.1 per cent of GDP.

This isn’t comparing like with like.

It is true that Australia does not have social security payments like most European countries do – but we do have compulsory superannuation. This performs much the same function as does social security – except in Australia it has been privatised and isn’t a ponzi scheme. To that extent when making comparisons with other OECD economies we should either add superannuation payments in, or take social security payments out to ensure we’re comparing like with like.

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17 Responses to Super and social security

  1. Token

    I remember when they were selling the need for the Rolls Royce NBN solution it was critical to compare ourselves with South Korea.

    Why are the analysts not being consistent and compairing our tax rates?

    Some may say they are cherry picking due to bad intentions.

  2. Percy

    comparisons with other OECD economies

    Much the same as comparing patients in an IC ward.

  3. eb

    And personal income taxes are only part of the story. What about corporate rates, what about the difference in tax structures used by small business. And shouldn’t we actually be striving to have a low rate of personal income tax compared to GDP? How does our economy compare to the OECD average? Should we really be trying to emulate them?

  4. Leo G

    “… except in Australia it has been privatised and isn’t a ponzi scheme. “

    At least, not for employment outside the public sector.

  5. Lloyd

    Given our economy is supposed to be the envy of the Western world why the hell do we even care what happens in Europe’s or America’s economies?

  6. Petros

    Always thought Uren was a light-weight. Why compare to failing European economies? Also, let’s not forget the black market economy. It would make their real GDP larger and therefore the income tax percentage smaller. Isn’t it estimated to be about 10 percent of GDP in Italy?

  7. dianeh

    we’re comparing like with like

    Totally agree. But then that wont support the narrative that we are under taxed, will it?

    I am sick to death of this ever present pushing by the left to increase taxes to pay for unnecessary and wasteful spending. Cut the bloody spending. There is so much waste in every Govt dept at every level, that they should be able to trim the spending by so much that they could give tax relief.

  8. dianeh

    Damn it, I cant even cut and paste properly. Time to give it up. My quote was meant to be this one.

    This isn’t comparing like with like.

  9. struth

    Personal income taxes …..what crap.
    Cherrypicking.
    Overall taxation is what we should look at.
    We are vastly overtaxed.
    Houses, power, rates, fuel, registrations, industry fees, and on and on.

  10. Andrew

    Govt takes $300bn or so, plus other tiers of govt. Let’s call it $400bn. For 23m Australians. $17,300 p.a. for every man, woman and child in the country. $70k p.a. for a family of 4.

    That’s more than most Working Families keep to live on themselves! The govt spends more “on us” than we spend on ourselves! And yet the fucking grubs kept telling us for 6 years how under-taxed we were, and how they were going to fix that.

    Fuck them all, they should be flogged. Then entire R/G/R front bench. And then if Abbott666 tries to raise aggregate taxes to pay for the disaster, his lot too.

  11. Jazza

    Do they anywhere acknowledge that business is taxed to the point of pain as well as regulated out of its brain?
    A decent economist, my kingdom for a decent economist, but would that mean there was a decent politician/ treasurer to listen to him/her?

  12. Dan

    Australian personal income taxes are 10.2 per cent of GDP, which is a smaller share than any other OECD member except South Korea. The average (including compulsory social security contributions common throughout Europe) is 18.1 per cent of GDP.

    Only 50.9% of taxpayers are nett contributors. Could be a slight problem as well.

  13. Rabz

    FFS, where to start.

    We are probably the most highly taxed wallies on the planet and I’ve demonstrated this, on this blog, on numerous occasions. struth at 5:05pm above barely illustrates the tip of the iceberg.

    :x

  14. Johno

    Looks like we’re getting softened up for (a) increases in taxation or (b) delays in tax cuts.

    Spot on.

    The Oz should be doing better than this. Why are they running a Big Government agenda?

    Low taxes should be celebrated. ‘Australia leading the way in keeping taxes low’ should be the story, not this crap about tax revenue being too low.

  15. To that extent when making comparisons with other OECD economies we should either add superannuation payments in, or take social security payments out to ensure we’re comparing like with like.

    Sinc, can you calculate how we compare on that basis? And is an OECD comparison sound?

  16. Jazza

    Off topic, but….
    Hey guys, have you lot been ultra hard on old “Numbers” here lately?
    I ask cos he’s been over at Michael Smith’s news blog sabotaging a thread and calling Michael unkind and laughable names, then demanding an offensive back at ya towards him by a poster be withdrawn and Michael apologise at him.
    TRUE!(how must his mind work or is it all a put on?)
    Must have had the grand daddy of all knockbacks last night as he’s fair fuming about….?? what exactly??as HE began the abuse, directed at the host of the blog he crashed!
    School hols and he’s bored?

  17. .

    struth and rabz…thanks for paying attention. My rants are having an impact at last!

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