There's A Public Perception Problem With Tax In Australia

Photo: Paul Kane/Getty

Australians think they pay too much tax in a system that has become less fair, but support for public spending is falling.

That’s the main finding from think tank Per Capita’s annual tax survey. The group surveyed 1,422 Australians aged 16 years and over in October last year.

“Objectively, this does not make sense. The tax take in Australia, measured by the tax-to-GDP ratio, has hit long-term lows in the last few years,” said report author David Hetherington.

“Australia now has the fifth lowest tax burden of the 34 OECD countries, higher only than South Korea, Chile, the United States and Mexico.

“Recent public spending cuts, particularly in health and education, would normally be expected to lift support for greater spending,” Hetherington, the executive director of Per Capita, explained.

Hetherington said that the reports results can be summed up like this: “Put simply, political leaders must explain that, by comparison with similar countries overseas, Australian tax levels are at a bare minimum. If we are to sustainably fund the services and infrastructure that we expect, taxes will have to rise.

Here are some of the key points:

1. One half of those interviewed stated they paid too much tax, up six percentage points since 2010.

2. Half the respondents said petrol prices had gone up thanks to the carbon tax, when this isn’t levied on fuel.

3. 60% of households that have someone working in mining think they pay too much tax.

4. Broadly, the perception that one is excessively taxed rises with educational achievement.

5. Liberal and National Party voters feel most strongly that they pay too much tax, with 59% and
53% respectively stating they pay too much.

6. 55% of interviewees state that high-income earners (those in households with incomes over $150,000) pay too little tax, while 20% say they pay the right amount and only 14% say they pay too much.

7. Respondents in households earning over $150,000 are the only group where more people say that high-income earners pay too much tax than those who say they pay too little.

8. 63% of respondents say that big business pays too little tax, while just 6% say they pay too much. Only 18% say big businesses pay the right amount.

9. Of those respondents who say they pay too much tax, fully two-thirds say that governments should spend more on public services.

10. Almost half of the respondents said they had received no compensation as a result of the carbon tax, when 90% of households have received assistance.

Read the full report here.

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