Proof that taxes have been SURGING under Anthony Albanese (2025)

18 shares

Tax collection under Anthony Albanesehas surged to the highest level in almost two decades.

Australians are paying the highest level of tax in a generation, despite Labor's pledge to provide more income tax relief to lower-paid workers.

Tax revenue at the federal, state and local government level made up 30 per cent of gross domestic product in the 2023-24 financial year, new Australian Bureau of Statistics data released this week showed.

This was the highest level since 2006-07 before the Global Financial Crisis, when the mining boom boosted federal government company tax revenue and state government royalties.

Australian Industry Group chief executive Innes Willox said Australians were suffering as the federal government increasingly relied on income and company tax revenue.

'It's bad enough that the tax burden is mounting at a time our economy desperately needs more investment, job creation and growth,' he said.

'That it's being driven by the types of taxes that work against growth and productivity rubs salt into the wound.'

An average Australian worker is typically paying 24.9 per cent of their income in tax while the 28.5 per cent average company tax rate is the second highest in the OECD, an Australian Industry Group analysis showed.

Mr Willox said land tax or raising the 10 per cent GST would lessen the federal government's reliance on income and company taxes.

'We also need to look to a broadened tax base to remove disincentives to investment and employment,' he said.

'Broad-based taxes like land tax and the GST can have much lower rates for the same revenue effect.

'If we don't broaden the tax base we will have no choice but to watch the burden of personal and company taxes inexorably rise to meet fiscal requirements.'

The federal government - which collects income tax, the GST and petrolexcise - raised $649.363billion or 81 per cent of the $801.716billion collected at all levels of government in 2023-24.

Labor's pre-election Budget in March included a $17.1billion plan to reduce marginal income tax rates for part-time workers, flowing through to higher-income workers.

From 1 July 2026, the 16 per cent tax rate for workers earning $18,201 to $45,000 will be reduced to 15 per cent – leading to annual tax relief of $268.

And from 1 July 2027, the tax rate will be reduced to 14 per cent – bringing relief of $536 over two years.

But Mr Willox said this didn't go far enough, with the Coalition opposing Labor's income tax relief.

'Piecemeal changes that tinker at the margins won't fix a broken tax system. Taking on these challenges is crucial to enhancing prosperity,' he said.

'Not addressing it is a major blind spot in our national debate.'

Opposition Leader Peter Dutton has promised to tackle bracket creep where workers end up in higher tax brackets, by virtue of annual pay rises to keep up with inflation.

Mr Willox said tax reform could no longer be ignored.

'Australia needs to urgently reform our tax system to stop the mounting burden of company and personal taxes that increasingly drags on productive activities in our economy,' he said.

'Policy leaders can't afford to avoid tax reform after the election.'

Anthony Albanese

Add your comment