Monday, 5 November 2012

Australian taxes amongst the lowest

Given all the welfare that gets forked out to middle Australia, I'd have thought we'd have been one of the highest taxing countries in the world. So I was very surprised to read today that in fact Australia is one of the lowest. 
A study by chartered accountant UHY Haines Norton found that a single, unmarried Australian whose take-home pay was up to $US25,000 ($24,141) a year had the third-lowest personal tax rate. 

Only Japan and the United Arab Emirates were ahead of Australia in the study, which covered 25 countries including all members of the Group of Eight (G8) nations, as well as the emerging economies of Brazil, Russia, India and China. 
UHY tax partner James Tng said the report suggested Australia had found a balance between a progressive and competitive tax system. Read more
I guess it's all about priorities. I mean the gov is doing things like raising the old aged pension age to 67, as well as handing money out in welfare. They pay for social services like free public hospitals and affordable medicines, doctors. I know I whinge a bit about how easy it is to get welfare here when you're middle class, and my opinion hasn't changed on that, but at the same time you can't get pensioner rates on prescriptions if you're working and getting a reasonable wage. All about balance I suppose.

Just added to that, I couldn't find the actual report mentioned in the news, but I did come across this press release from the same company

Australia is one of the world’s lowest taxed developed countries as a percentage of GDP according to a new study (see page 2).

The study by international accounting and consultancy network, UHY, revealed Australia collects just 23% of GDP in tax, which is lower than all but one G8 nation (Russia) and sixth overall in a list of the 23 economies analysed. Australia’s tax collected as a percentage of GDP was also 21% lower than the combined average of the three major Eurozone economies of Germany, France and Italy. more
What's interesting about this is that it's from last June, before the tax cuts/compensation were bought in for the carbon tax on big business polluters. This was back when you paid tax starting at $6,000yr (tax free threshold). On July 1st that was increased to just over $18,000yr before you start paying any tax. The graph therefore is now a touch out of date.

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