Australians believe that they are more highly taxed than other developed countries and that their tax burden has increased in the last five years, today’s Essential Report shows — but they believe taxes are high enough to fund the National Disability Insurance Scheme, Gonski education reforms and other social service programs.

Sixty-four per cent of voters believe taxes are higher in Australia than in other developed countries, Essential found. Only 8% think they’re lower. And while 69% of Coalition voters think they’re higher, so do 64% of Labor voters (and the same proportion of other voters), while Greens voters are split 47%-15%. According to OECD-compiled data (using Organisation for Economic Co-operation and Development, not Australian, methodology) up to 2012, Australia had the fifth-lowest tax-to-GDP ratio out of 34 countries, 26.5%, compared to an average of 31%. Only Mexico, Chile, the United States and South Korea have lower tax-to-GDP ratios than Australia.

And 65% of voters think taxes have increased in the last five years, while 9% believe they’ve decreased. However, 72% of Labor voters believe they’ve risen, compared to 65% of Coalition voters and 46% of Greens voters. Some 24% of voters believe taxes have “increased a lot” — again, with more Labor than Coalition voters believing it — while 20% believe they’ve stayed the same.

According to budget figures, taxation receipts as a proportion of GDP fell from 21.7% of GDP in 2008-09 to 21.4% in 2012-13, and are estimated to be 21.8% of GDP this year. In the final year of the Howard government it was 23.6%. Labor implemented its election promise tax cuts in 2008, almost fully copied from the Coalition election promise in 2007, although these were partially reversed by the temporary flood levy and then the NDIS levy.

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However, 47% of voters think the current level of taxation is sufficient to fund services such as the NDIS and the Gonski education reforms, which many economists and Treasury insist can’t be afforded without tax rises. Thirty-three per cent of voters believe taxes will need to rise to pay for them. Labor voters are the most optimistic, with 52% of voters thinking current taxes are enough to pay for reforms and 28% who think they aren’t. Coalition voters split 48%-39%. Greens voters split the other way, 31%-43%.

The figures demonstrate the success the Coalition had in portraying the previous government as high-taxing one, helped of course by a relentless focus on the carbon price and the mining tax, even as Labor cut income taxes and falling company tax collection savaged the budget bottom line. However, the Coalition now faces the flip side of its success, having encouraged Australians to believe they are highly taxed, as voters are less inclined to believe taxes may need to rise to fund new expenditure like the NDIS.

The Labor Party has also improved its standing in the eyes of voters on a range of attributes. Compared to November last year, it has improved on a range of positive indicators and declined on negative indicators: it has fallen 14 points on “divided”, from 72% to 58%, gone up 8 points on “clear on what they stand for” to 42%, and gone down 4 points on “out of touch”. The Coalition, meanwhile, has mostly done the opposite: down 6 points on “clear on what they stand for”, up 7 points on “divided”, up 4 points on “will do anything to win votes”. However, the Coalition has declined on “extreme” and actually fell a point on “too close to the big corporate and financial interests”. A comparison shows the Coalition still ahead on many indicators, but for the first time since 2009, Labor looks competitive on voter esteem.


On voting intention, it’s still 51-49 to the government, with Labor and the Coalition both picking up a primary vote point to 44% and 37% respectively; the Greens remain on 9%, Clive Palmer’s party on 4%.