“Labor unashamedly argues for higher taxes overall.”
— Mathias Cormann, 23 November 2017
Let’s put the government’s thought bubble about tax cuts in some proper perspective. This is what the government has done and is proposing to do with tax collections, compared to what happened under Labor. Note that these figures, from this year’s budget, include the multinational tax heist that will cost $60+ billion in lost revenue over 10 years.
Under Labor, tax as a proportion of GDP averaged 20.9%. It is expected this year that it will reach 22.2%, on the way to 23.7% of GDP in 2020-21. If the government wanted to get back to the tax levels of the Labor years — what, with Labor being the party of higher taxes and all — it would need to forgo 2.8% of GDP in tax, or about $58 billion in 2020-21. No biggie.
OK, so matching Labor is a little difficult, sure. But how about a more modest goal: cutting tax as a proportion of GDP back to where Tony Abbott and Joe Hockey had it? They averaged 21.9% of GDP in tax receipts. To get it back to the halcyon days of of 2015, the government would have to forgo $37 billion a year and upwards.
Or, hell, what about just keeping it at 23%, which the tax:GDP isn’t forecast to reach until 2019? That’ll be $8 billion, thanks. The following year, 2020-21, will bring a forecast surplus of around $12 billion. Better hope for a windfall.