Federal Government Falling Behind With Tax Revenue

Federal Government Falling Behind With Tax Revenue

Australian Bureau Of Statistics

Benefits Outweigh Taxes For Households

Victor P Taffa

Australian households received, on average, $76 more a week in government benefits both cash and in kind than they paid in taxes in 2015-16, according to the Australian Bureau of Statistics (ABS).

“This study provides the ABS’s most extensive measure of income which illustrates the redistributive effects of government benefits and taxes.” ABS Chief Economist Bruce Hockman said.

“This report, Government Benefits, Taxes and Household Income, Australia, 2015-16, found that once you adjust for the size and make-up of the household, the poorest 20 % of the population earned 3 % of all private incomes. After receiving benefits and paying taxes, their share of income increased to 13 %.”

Mr. Hockman said that the ‘final income’ of households was calculated after adding government benefits to private incomes and deducting all taxes. Benefits covered those provided in cash, such as pensions, and in kind, such as education and health services, while taxes included income tax, GST and other indirect taxes.

For the richest 20 %, the government benefits and tax system had the opposite effect, with these households generally receiving fewer benefits and paying more in taxes. Overall, the share of private income for the richest group was 47 %, which reduced to a 35 % share after benefits and taxes.

Across the states and territories, households in Tasmania received the most benefit after taxes, at $360 on average per week. In aggregate, households in the Australian Capital Territory did not receive a benefit after tax, instead paying, on average, $79 more in taxes than benefits received.