Follow @thekouk

Watch The Kouk in action

Dynamic Syndications

Election Facts: Which side taxes the most?

Sat, 16 Apr 2016  |  

It’s time to bring some facts into the tax debate. With the budget a couple of weeks away, the government seems hell bent on framing the budget around “lower taxes” and suggest that the Labor Party is all about “higher taxes”.

There is a problem with this claim – it is wrong. False. Incorrect. Erroneous.

If the budget on 3 May is to cut taxes back to the level under the low point in the previous government, that is 20.0 per cent of GDP in 2010-11, it will have to reduce the tax take forecast in MYEFO for 2018-19 to a massive 3.1 per cent of GDP or around $50 billion per year in today’s dollar terms!

I will walk from Parliament House in Canberra to Parliament House in Sydney if the Budget cuts the tax take to this level, ie 20.0% of GDP, carrying a satchel of 2016-17 budget papers on my back.

And the claim opens another fabrication on tax: Which side, over history, has the record on the highest and lowest tax to GDP ratios.

Hold on to your hats, because the facts are frankly, amazing.

Here are the Top 10 years of tax to GDP ratios since 1980-81and the government in power at the time:

2004-05  24.3% Liberal
2000-01  24.2%  Liberal
2005-06  24.2%  Liberal
2002-03  24.0%  Liberal
2003-04  24.0%  Liberal
2006-07  23.7%  Liberal
2007-08  23.7%  Liberal
1986-87  23.3%  Labor
1987-88  23.2%  Labor
2001-02  23.2%  Liberal

(Note: The Turnbull government gets an award for the next highest with the projected tax to GDP ratio of 23.1% in 2018-19).

Even more extraordinary are the facts of the 10 lowest tax to GDP ratios since 1980-81. All 10 are under Labor governments. All 10.

Here they are:

1992-93  20.0%  Labor
1993-94  20.0%  Labor
2010-11  20.0%  Labor
2009-10  20.2%  Labor
1991-92  20.7%  Labor
2011-12  20.9%  Labor
1983-84  21.0%  Labor
1994-95  21.2%  Labor
2012-13  21.5%  Labor
2013-14  21.5%  Labor

And the source for these numbers are the MYEFO released by Treasurer Morrison and Finance Minister Cormann in December 2015: https://www.budget.gov.au/2015-16/content/myefo/html/index.htm 

More in this category: « What surging commodity prices mean for the Aussie economy Election Facts: Government debt »
comments powered by Disqus
back to top

THE LATEST FROM THE KOUK

Politics Panel: Australia's intergenerational gap

Fri, 25 May 2018

I was one of the panel members of this podcast which was on ABC Radio National. 25 minutes of interesting discussion.

At this link: https://www.abc.net.au/radionational/programs/breakfast/politics-panel-australias-intergenerational-gap/9798848 

Politics Panel: Australia's intergenerational gap

 With the federal budget handed down and the battle lines emerging for the next election, Australia's intergenerational gap is shaping up as a major political issue.

The Coalition is promising a host of sweeteners for retired voters while Labor is promising to pump more money into education and get housing prices down.
If you're a voter, there's a good chance your view of those promises will be informed by the year you were born.

Be the first to comment!

Do we need to be worried about Australia's economic outlook?

Tue, 22 May 2018

This article first appeared on the Yahoo7 Finance web site at this link: https://au.finance.yahoo.com/news/need-worried-australias-economic-outlook-060611703.html 

----------------------------------------------------

Do we need to be worried about Australia's economic outlook?

The Reserve Bank of Australia reckons that the next move in official interest rates is more likely to be up than down. RBA Governor has said so in recent weeks as he talks up the prospects for the economy over the next year or two.

This is disconcerting news for everyone out there with a mortgage or a small business loan, especially in a climate where the business sector is doing it tough and when wages growth is floundering near record lows. The good news is that the RBA is likely to be wrong and the next move in interest rates could be down, such is the run of recent news on the economy. Failing an interest rate cut, the hard economic facts suggest that any interest rate rises are a long way into the future and if they do come, there will not be all that many.

At this point, it is important to bring together the issues that would need to unfold to see the RBA pull the lever to hike interest rates.  At the simplest level, the start of an interest rate hiking cycle would need to see annual GDP growth above 3.25 per cent, the unemployment rate falling to 5 per cent and less, wages growth lifting towards 3 per cent and more and underlying inflation increasing to 2.5 per cent.

This is where the RBA expectation for higher interest rates is on very thin ice.

Be the first to comment!
READ MORE