On the day the ABS’s annual taxation statistics showed a rare drop in annual average tax paid, Essential Research released a survey which found that 61% of us think that Australians pay too much tax, while only 4% say we pay too little tax.
Tax surveys have a history of being sensitive to the question asked. Another question in this Essential Research survey asked if the respondents were prepared to pay more GST for a series of specific programs. The answers to this question contradicted the answers to the first.
On all five items suggested more than 4% impliedly said we paid too little tax, given that 42% would pay more GST if the money was spent on health and hospitals, 38% said yes to aged pensions, 28% to infrastructure such as roads and railways, 20% to paying off the national debt, and 11% to create a foreign investment fund. And so much for the idea that the GST is to fund the states, too.
Asking questions about taxing and spending in general and in isolation from each other doesn’t tell us anything very useful. The GST question in which there is an express trade-off mentioned gives more meaningful results, suggesting that the preference for more social service spending that emerged during the prosperous Howard years is intact. Specifying the GST makes it a better question than a more general tax question, as the GST is the only tax that everyone pays. Of course, it’s easy to tell a pollster that you are happy to pay more tax, and actual political reactions may be less positive.
Unfortunately for those who do want more spending on services, the rising tax revenues that will accompany economic recovery will have to be diverted to funding stimulus spending interest costs and repayments.