Tax insights from the national accounts

Courtesy of Mark the Graph.

Table 18 of the National Accounts gives us a window on government revenue. The growth rate in the revenue from the various sectors of the economy gives an indication on whether those sectors are doing well or not. I will limit the following analysis to the GFC and subsequent years – and those categories I found a little interesting.

Note: the usual caveats apply. Tax rules are constantly changing. Consequently, changes in the data need to be interpreted carefully.

The punters are paying ever more personal income tax. This probably reflects wage growth and the ongoing relatively low unemployment rate by historical standards. It is interesting to see the dip and recovery in the fringe benefits tax; it suggests the executives’ perquisites have been restored.

 

 

But business tax ain’t looking so hot. This points to significant revenue issues for the government.

Not surprisingly, payroll tax tells a similar story to income tax above. I suspect for similar reasons.

Does this land tax curve reflect a flatish housing market since 2010?

The next chart on municipal and metropolitan improvement rates is more positive than I was expecting.

Not quite sure what to make of this flat line since 2010.

The next chart suggest that growth in consumption has flattened. It also points to a state revenue base that is growing much more slowly than prior to the GFC.

As you can see on the growth chart – since mid 2010 this has been low by historical standards.

Not sure whether the recent downturn in excise relates to alcohol, tobacco or fuel. Something to ponder.

I included this next chart, because it may point to a reduction in gambling over the past 12 months.

 

David Llewellyn-Smith
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Comments

  1. Great presentation Mark and HnH
    re the Land Tax Chart – What is the explanation for the massive growth in Land tax from mid 2008?

  2. Diogenes the CynicMEMBER

    The Capital Gains tax is inhibited by massive losses from the GFC still not yet absorbed by new gains.

  3. My summary would be tax take by the government is still growing despite our 2 speed economy. So why the difficulty in balacning the budget we hear so much about unless the government is spending more than they take in (earn??). If thats the problem the government should learn to live within their budget like the rest of us.

      • The government is spending too much.

        The current Government was left structurally short-changed by the previous Government.

        • Hang on a second, if current tax takes are $10-15 billion higher than they were at the end of Howard’s 11 year stint and he was running surpluses for the majority of those years, how does your argument hold sway? (Unless the current government is even further short-changing any future government?)

          • Hang on a second, if current tax takes are $10-15 billion higher than they were at the end of Howard’s 11 year stint and he was running surpluses for the majority of those years, how does your argument hold sway?

            Howard & Costello left the budget in structural deficit. The tax cuts and middle class welfare they left behind, were funded by mining boom v1 and asset sales.

          • Sure, Howard/Costello left the budget in structural deficit. But that doesn’t explain why the actual budget under Labor has been in deficit. The High ToT imply a cyclical surplus.

          • Sure, Howard/Costello left the budget in structural deficit. But that doesn’t explain why the actual budget under Labor has been in deficit. The High ToT imply a cyclical surplus.

            Because Labor still hold the delusion they can win back Howard voters. Thus, they’re using the same policies of low-tax, high middle-class-welfare-vote-buying.

            The GFC in the middle made things worse, but even without it the chickens would have come home to roost eventually.

  4. Isn’t the most informative, and certainly most typical, way to show taxes is to show them as a percentage of GDP?

    If we do this, TOTAL TAXES in June 2012 were 28.0% of GDP, not a great deal more than the 26.95% of March 2007, and very much in line with where TOTAL TAXES in Australia have stayed for the last 40 years:

    http://en.wikipedia.org/wiki/File:Tax-Revenues-As-GDP-Percentage-(75-05).JPG

    As you can see from this graph, Australia has some of the lowest taxes in the world:

    http://www.taxpolicycenter.org/briefing-book/background/numbers/international.cfm

    It looks like the same thing is happening in Australia as is happening in the U.S. More and more of the total tax burden is being shoved off onto indiviuals and off of corporations. In 1959, individual income and payroll taxes in Australia made up 29.4% of total government revenues. In 2012 that figure had increased to 48%. Meanwhile, corporate income taxes fell from 19.9% to 14.3% of total government revenues.

  5. Thanks for the graphs, but the absolute value of taxes says nothing, but their structure and their percentage of GDP says everything about the society and its values.

  6. Now why on god’s green earth can’t Pascoe or Gittins provide the same analytical insight?!? So simple, yet so effective – that’s why I like MB. Keep up the good work!