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Tuesday, 22 October 2002
Page: 5582


Senator WEBBER (2:28 PM) —My question is to the Minister for Revenue and Assistant Treasurer, Senator Coonan. I refer to the minister's suggestion yesterday to check the facts regarding the recent OECD taxation survey of developed nations. Can the minister confirm that the OECD survey showed that the tax burden in Australia, including the GST, has gone up by almost two per cent of GDP, or over $10 billion per annum, under the Howard government?


Senator COONAN (Minister for Revenue and Assistant Treasurer) —I thank Senator Webber for her question. No, I do not agree with that. What the OECD statistics show is that, taking account of all levels of government, Australia is the sixth lowest taxing nation out of 30 OECD countries in the year 2000. That is, in fact, what I said yesterday. The Commonwealth's budget papers clearly show that the Commonwealth's tax share has actually decreased under this government. Commonwealth general government sector cash taxation revenue, as a proportion of GDP, has declined from 23.9 per cent of GDP in 1999-2000 to 21.7 per cent in 2001 and it is estimated that it will fall to 21 per cent of GDP in 2002-03.

Care of course needs to be taken in interpreting the 2000-01 estimate. Australia's tax burden—and this seems to be where people got excited—was temporarily higher in 2001 as a result of the transition to the new tax system from 1 July 2000. In particular, the OECD statistics show that taxes on corporate income in Australia did increase from 4.9 per cent to 6.5 per cent in 2000-01. The increase largely reflected the one-off impact of the bringing forward of company tax assessments, which represented about one per cent of GDP. With the passing of this effect, the Commonwealth's tax to GDP ratio fell from 21.7 per cent in 2001 to 20.6 per cent in 2001-02.

The OECD statistics in future years will also reflect further reductions in state and territory taxes agreed under the new tax system, which will reduce Australia's total tax to GDP ratio. It is important to recognise the impact of tax relief provided through the rebates which are accounted for as outlays but which are essentially tax refunds. I can go on and give examples—I am sure I am going to get a supplementary—but the short answer to Senator Webber's question is that the position I referred to yesterday was absolutely correct.


Senator WEBBER —Mr President, I ask a supplementary question. Having further checked those facts, can the minister confirm that the OECD figures for Australia were compiled before the Howard government imposed the Ansett ticket tax and did not include the planned sugar tax or the proposed tourism tax? Given all these extra taxes, Minister, doesn't this confirm the government as the highest taxing, highest spending government in Australia's history?


Senator COONAN (Minister for Revenue and Assistant Treasurer) —Thank you, Senator Webber, for the supplementary question. In fact the government has imposed no taxes whatsoever. The government has imposed some levies and the Commonwealth's total revenue, including levies, is expected to be 23 per cent of GDP in 2002-03. This is lower than the total revenue of 24.1 per cent of GDP in 1995-96. It is wrong to say that levies are simply a way of disguising the fact that this is a big taxing government. Once again, Senator Webber should check her facts.