The Liberal-National Coalition Government has a stated budget policy of not collecting more than 23.9% of GDP in tax. What a laughable objective. It reminds Spartacus of a “strategy” executive in an organisation he once work for who convinced the CEO to set a business objective of generating $500 million of “profitable revenue”.
When it comes to tax, the reality is that the true rate of taxation is actually government spending because this spending has to be paid for either the current year through taxes or in future years through taxes. We should not be fooled by the accounting trick of moving flows between reporting periods.
Total tax = tax collected yesterday + tax collected today + tax collected tomorrow.
But worse, the 23.9% objective is a sham for the reason that the government generates other taxes elsewhere although by a different name and through other means. And no, Spartacus does not refer to the “Tax Expenditures Statement” but rather other government policies which forcibly extract money from citizens.
Let’s start with the most obvious being compulsory superannuation contributions. The reason this is really a tax is not only because it is mandatory (at threat of property, life and liberty) but when comparing tax rates to other countries, those other countries (eg US, UK, France) have their retirement savings schemes wash through the government’s accounts and hence within tax numbers. Thus Australia needs to automatically add in some extra percentages for this.
But then Australia needs also to account for the equivalent of the tax penalty for not maintain private health insurance. There is also the raft of “user” and “industry” charges imposed by ASIC, APRA and Austrac which collectively amount to $1b per annum. If you run a financial services business in Australia, you have to pay the piper, and these are not licence or company registration fees.
There are a raft of things citizens are forced to pay for and the the suggestion that this Liberal National government is a low taxing one is as laughable as the suggestion that Australia is a low taxing country.