My post from yesterday, Some Great Big New Facts on Tax, generated a fair bit of feedback, some good and some highly emotional. Those critical unfortunately had a high disposition to abuse and filth, but did not once provide any alternative data source to refute the facts. The reason for that is obviously because the numbers in my piece were correct.
One issue, that the Howard Government was the highest taxing government in Australia’s history, made me consider the following point. If the Labor Government had the same tax receipts as the peak level received by the Howard Government (24.1% of GDP), there would have been only one deficit (2009-10) and rather than net debt peaking at around $110 billion, the Government would have net financial assets of around $201 billion in June 2013.
Consider the following table:
Tax Data
| | Actual Tax | Tax if equal to 24.1% of GDP | Actual Budget Balance | Budget Balance if tax = 24.1% of GDP |
| 2008-09 | $272.6b | $302.5b | -$27.1b | +$2.8b |
| 2009-10 | $261.0b | $309.6b | -$54.8b | -$6.2b |
| 2010-11 | $280.8b | $335.3b | -$47.7b | +$6.8b |
| 2011-12 (est) | $321.1b | $362.7b | -$22.6b | +$18.9b |
| 2012-13 (est) | $353.4b | $391.4b | +$3.5b | +$41.5b |
The 2011-12 and 2012-13 data are from the May Budget. All other numbers are final.
The key column is the last one. If the tax to GDP ratio stayed at the record level recorded in 2004-05 and 2005-06 under the Howard Government, the Budget would have been in surplus in 2010-11, would be in surplus above 1% of GDP in 2011-12 and would be on track to be a record high 2.6% of GDP in 2012-13.
Any mug can record a Budget surplus if you tax the tripe out of the people. Just ask the Sheriff of Nottingham – or John Howard.
Enough said.
Looking at the taxation as a proportion of GDP is a bit of a blunt instrument since it includes mineral royalties and corporate taxes which do not dent the wellbeing of individuals and families as much as income or consumption taxes.
ReplyDeleteIs there an easy way to determine the taxation burden on individuals and families as a % of GDP? This would be a better measure of how heavy of a burden a governments policies are on individuals and families.
@rationalist: yet we keep hearing that it does dent the wellbeing of individuals and families from the mouths of the Coalition and business. Who's right and who's wrong? I'm confused.
ReplyDelete