While Scott Morrison and Josh Frydenberg have likely secured their place in Australian fiscal history as our biggest-spending government since World War II, they’ve quietly notched up another record for big government as well.
In the June quarter this year, the Commonwealth raised a new record of taxation revenue, according to the Australian Bureau of Statistics (ABS), with tax revenue hitting $140 billion in the quarter. That compares to just $118 billion in the June quarter last year, which obviously was dramatically affected by the pandemic. But in the June quarter of 2019, a much more normal fiscal year, tax revenue was just $127 billion.
These aren’t inflation adjusted numbers of course, but let’s look at how Morrison and Frydenberg stack up as tax collectors in relation to the overall size of the economy using like-for-like numbers across the years. This is June quarter tax collections versus June quarter GDP numbers:
As the data shows, the Coalition inherited a level of taxation:GDP in the low twenty per cent range, but steadily lifted the level of taxation burden on the economy through the mid-twenties and now, close to 28% of GDP. Moreover, they did it during a time of profound wage stagnation, which takes real effort.
Clearly, the super-profits of the big iron ore miners enjoying record commodity prices, and the JobKeeper and monetary policy-generated profits of the big banks, account for a substantial proportion of the rise. The slide in iron ore and copper prices will take some of the gloss off the rise in the terms of trade since June 30 (though higher LNG, oil and gas and especially coal prices, which have more than trebled in the past 18 months, will help keep nominal GDP high this quarter). But according to the ABS data, income tax collections also rose in the three months to June, along with GST collections.
Much of the rise in tax revenues can also be looked at (on the consumption side) as billions in government support packages, along with loans and quantitative easing from the Reserve Bank, being recycled back into government coffers (and into state government coffers as well — they also had a big quarter).
The lack of coverage of the new record suggests most in the media are still in the grip of the traditional mindset that Labor are the party of big government, when it has been the Coalition that has racked up both the highest taxation levels and the highest spending levels even before the pandemic. It’s amazing what you can get away with if journalists, editors and producers think that you’re not the kind of party that does that sort of thing.
Australians require a mature conversation about the type of society they want to live in and how to pay for it. All the bemoaning of tax and making it a toxic political topic is really quite juvenile, infantile almost. Do Australians want second rate infrastructure, wobbly hospitals, shonky education systems including tertiary and trade trading that makes kids serious debtors, homelessness and people retiring into poverty? Or, do Australians want to acknowledge they live in one of the 20 richest countries on the planet, and can afford for the well-off to pay more to deliver a caring, developed, leading country? Tax has to be part of any serious conversation.
Nobody here disagrees with that. But for ever LNP has pilloried Labor that the tx and spend mob as though that’s the worst imaginable crime. But then happily does the about face when it politically suits them. Trouble is, all the welfare gets funnelled to business and not the people….hence the Gerry H situation….
For that you need grown ups and motivated people in political parties. At the moment we a left with monstrosities built for building the past and not for building the future. Our electoral system is a big failure and punishes renewal.
Or in other words asking Australians ‘do you want to continue on this path with imported US radical right libertarian socio-economic ideology grounded in dour Calvinist Christianity, eugenics, the alt right and autocracy?’
No surprises there about the highest taxing government being a Coalition government while also using those taxes as corporate welfare.
The lack of coverage of the new record suggests most in the media are still in the grip of the traditional mindset that Labor are the party of big government, when it has been the Coalition that has racked up both the highest taxation levels and the highest spending levels even before the pandemic. It’s amazing what you can get away with if journalists, editors and producers think that you’re not the kind of party that does that sort of thing.
Old Goebbels trick, lie lie lie and it will be believed, especially if you have control of all the MSM and the independent news sources are an echo in the media desert. Independent Australia regularly put out Quizzes a while back which were very informative and educational.
The Labor bashing Selkie rubbished my files calling them ‘ancient’ when I posted unwelcome information about the Greens shenanigans…and all parties including Labor indulge!
Morrison, the lad that studied economic geography in high school and at university and becamse Treasurer after being sacked repeatedly was presiding as Treasurer when this quiz was written
Morrison said: The Australian economy is transitioning, we’re transitioning successfully.
How well do you know Australia’s hidden economic history? Other than that pushed by the MSM?
https://independentaustralia.net/politics/politics-display/pre-election-quiz-7-australias-hidden-economic-history,9147
So here goes:
Only once has Australia’s gross debt increased by more than $14 billion in one month.
This was in:
(a) 1941, when Arthur Fadden was prime minister, to manage World War II.
(b) 1991, when Bob Hawke was PM, to restructure Australia’s economy during the early 1990s recession.
(c) 2009, when Kevin Rudd was PM, to finance the world’s fastest stimulus response to the global financial crisis.
(d) 2016, when Malcolm Turnbull was PM, to finance a shortfall in revenue due to massive tax evasion.
1. (d) In May 2016, to finance massive tax evasion.
2. Who were treasurer and prime minister when Australia first achieved triple A credit ratings with all three international agencies?
(a) John Howard when Malcolm Fraser was PM.
(b) Peter Costello when John Howard was PM.
(c) Wayne Swan when Julia Gillard was PM.
(d) Joe Hockey when Tony Abbott was PM.
2. (c) Wayne Swan when Julia Gillard was PM in 2011.
4. According to a speech in January by Treasury chief John Fraser – appointed by Tony Abbott in 2014 – Australia’s current structural deficit and debt problems began when?
(a) During the 1980s when the Hawke Government slashed tariffs, floated the dollar and deregulated the banks.
(b) In the early 2000s, when the Howard Government squandered the windfall revenue from the mining boom.
(c) During the global financial crisis, when the Rudd Government borrowed tens of billions of dollars to spend on pink batts and school halls.
(d) In 2014 when the mantra “open for business” encouraged corporations to evade taxes.
4. (b) In the 2000s, when the Howard Government squandered the mining boom revenue.
Maintaining foreign exchange reserves is a critical area of economic management. Australia’s reserves once dropped disastrously during a three-month period – by 55 per cent from $80.3 billion down to $35.9 billion.
The hapless treasurer then was:
(a) John Howard when Malcolm Fraser was PM.
(b) Peter Costello when John Howard was PM.
(c) Wayne Swan when Julia Gillard was PM.
(d) Joe Hockey when Tony Abbott was PM.
(e) Never happened. No-one could be that incompetent.
5. (b) Costello when Howard was PM in mid 2007.
6. Which of these disastrous outcomes was reported in last week’s jobs figures from the Australian Bureau of Statistics (ABS)?
(a) The number of full-time workers has fallen by 60,670 since December.
(b) Full-time employees are now only 64.4 per cent of the work force, an all-time low.
(c) Actual hours worked relative to the population have fallen over the last three months to the lowest level since 1993.
(d) Job participation has fallen to 64.8 per cent, below the level three years ago.
(e) All of the above.
(f) None of the above.
6. (e) All of the above.
7. Which of these disastrous outcomes in last week’s ABS jobs figures was reported in the mainstream media?
(a) The number of full-time workers has fallen by 60,670 since December.
(b) Full-time employees are now only 64.4 per cent of the work force, an all-time low.
(c) Actual hours worked relative to the population have fallen over the last three months to the lowest level since 1993.
(d) Job participation has fallen to 64.8 per cent, below the level three years ago.
(e) All of the above.
(f) None of the above.
7. (f) None of the above — as far as we can tell. One Fairfax article admitted that full-time positions
8. One of these statements about Australia’s economy is false — which?
(a) Australia’s economy has recently been overtaken by South Korea as the world’s 12th largest economy, measured by nominal gross domestic product (GDP).
(b) Australia was the only member of the Organisation for Economic Cooperation and Development to avoid a recession – two negative quarters of GDP growth – during the global financial crisis (2008 to 2012).
(c) Workers’ wages rose by 16 per cent in 1982 when John Howard was treasurer.
(d) In the last 25 years the seven budgets with the highest tax to GDP ratio were all Coalition and the seven with the lowest tax take were all Labor.
8. (b) is false. Australia was not the only OECD member to avoid recession. Poland also did. Australia was the only OECD country to avoid a recession and widespread unemployment. Poland’s jobless rate rose above 12 per cent. The other statements are all true. Links available on request.
9. According to ABS figures released this month, which of these manufacturing sectors are producing volumes higher now than in 2013, before the last election?
(a) Textiles and clothing
(b) Printed and recorded media
(c) Petroleum, coal, chemical and rubber products
(d) Metal products
(e) Machinery and equipment
(f) All of the above
(g) None of the above.
9. (g) None of the above. All have declined, although some other sectors such as food and beverages have increased.
10. Two extraordinarily costly blunders by Australian treasurers are very well-kept secrets. One was $4.5 billion lost gambling on foreign exchange markets. The second was selling most of Australia’s gold reserves at near rock bottom prices just before the price rose spectacularly. Both handed billions to foreign speculators. Coincidentally – or maybe not – they happened under the same treasurer.
He was:
(a) John Howard
(b) Paul Keating
(c) Peter Costello
(d) Wayne Swan
(e) Joe Hockey
10. (c) Peter Costello. That name keeps popping up.
11. Malcolm Turnbull said recently:
“Part of our plan is big trade export deals. We have opened up huge markets in Asia which are driving investment and growth.”
Who was prime minister when Australia’s exports plummeted and the trade deficits exceeded $2.5 billion for a disastrous 11 months straight?
(a) Gough Whitlam
(b) Malcolm Fraser
(c) Julia Gillard
(d) Tony Abbott
(e) Malcolm Turnbull
11. (e) Malcolm Turnbull
And a recent article can be found here along with a great cartoon of Dual Citz Fried and Scumbo
https://independentaustralia.net/politics/politics-display/morrison-government-sets-records-in-economic-mismanagement,15457
Allan – thanks for sharing – it’s illuminating to have facts.
“It’s amazing what you can get away with if journalists, editors and producers think that you’re not the kind of party that does that sort of thing.”
The age is also complicit. Ever since the take over by nine it has gone backwards. It still states it is an independent newspaper, but it certainly isn’t unbiased.
Yep my point. since the advent of Nine, it has joined the murdoch ranks – an LNP stooge. the way some of the columnists hav eabandoned their principles over night and gone to th edark side is amazing. Hartcher was one who kept saying what great job Morrison has been doing . . not sure whether he’s so game to say that now??
Noticed recently that The Age (and ABC Online too) has been running protection for NSW govt., Premier and PM by simply omitting or avoiding any mention of NSW…… but much focus upon the Vic Govt and Premier, plus some -ve agitprop on WA and QLD.
Doesn’t seem to be sticking if this is right
ALP support has increased to 54.5% (up 0.5% points since mid-August) cf. L-NP on 45.5% (down 0.5% points) on a two-party preferred basis. This was the third straight increase in support for the ALP and they are now up 4% points since having a narrow lead in mid-June (ALP 50.5% cf. L-NP 49.5%) according to the latest Roy Morgan Poll on Federal voting intention.
Past week or so, latest (and the LNP’s own) polls maybe the inspiration for the omission of LNP negatives including the PM etc., nudging of voters round supposedly non-political themes e.g. ‘well being’, ‘freedom & liberty’, post vaccination objectives of more ‘freedom’ (as opposed to highlighting sub-optimal roll out) etc.
As Lynton Crosby says, near polling time ignore the polls, while we can be confident there will be a significant negative campaign for the LNP by legacy media i.e. disappear the LNP and highlight Labor etc., and relying upon ongoing conditioning of voters to go with their hearts not heads. Even better a refugee boat or two may turn up with Afghan male Muslims who could potentially be terrorists…. (same dog whistle is already doing the rounds elsewhere in Europe as some nations prepare for elections within a year and having the desired effect on ‘persuadables’).
No, surely that can’t be right! That means Joshie lied twice in parliament today. He claimed that the libs are the low taxing govt and that awful labor party were just about raising taxes for the hell of it. In the same load of BS he claimed the lowest jobless rate in generations at 4.9%. LOL. The man has no shame…
Like all Coalition politicians they are only competent as liars
I’m the least-likely supporter–in any way–of this disgusting and disgraceful Commonwealth government. But I think the premise of the article is a bit disingenuous. Had Labor (or the Greens!) been in power, they’d have had stewardship over a JobKeeper strategy (and concomitant expenditure) and they’d have been reaping the windfall tax income from high mineral resource prices. These things are not what makes a high-spending/high-taxing government. Unfair and ill-thought taxes at an unfair level, and unnecessary spending on pork-barrelled projects rather than on nation-building infrastructure etc are. Any discussion about the LNC as a high-tax/high-spend government should be concentrating on the inherent corruption rather than windfall ‘profit’ from global economic good times. I acknowledge the long history that Crikey has of calling governments out on these things, however in this article, though, their mojo was diminished.