Here's a quick reminder that the budget billions come mainly from your pay packet

Treasurer Scott Morrison will hand down his second budget tonight.

We’ve got previews of what to expect here and here, and a quick guide to reading the budget papers here.

One of the key phrases in budget parlance is that “the government will spend x million / billion” to fund a specific program over a number of years.

Below is a quick run-down of where all those vast billions that fund federal government operations all come from. It shows personal income taxes — the biggest contributor — are nudging the $200 billion mark.

(This is from the mid-year budget update in December, and shows government receipts on a cash accounting basis.)

Let’s zoom in there for a closer look.

There are many things to discuss in these numbers and Australia is not alone in having income taxes as the foundation of its government spending capacity that gives the nation a social safety net and funds hospitals, roads and schools.

It does underline the importance of wages growth forecasts to the federal budget. The historically low levels of wages growth in Australia right now put a revenue drag on the budget and mean governments may be forced to look elsewhere – through cuts in spending or the raising of other taxes – to fund projects.

And it’s also a tidy reminder of who ultimately pays for all the spending announcements.

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