Page 1221 - Week 05 - Wednesday, 30 May 2007

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in recent years has produced a series of sizeable Budget surpluses while also delivering income-tax cuts and solid growth in own-spending is well known—

and acknowledged. He goes on to say, though:

These surpluses would have been all the more impressive if, at the same time—

the federal government’s—

tax/GDP ratio had been reduced and that financial assistance to the States—

and territories—

had been particularly generous, as is often suggested in Budget Papers and elsewhere.

However, Mr Robertson goes on:

Unscrambling the underlying Budget data, however, it is clear that—

the federal government’s—

tax/GDP ratio has not fallen and in fact now stands at a multi-decade high. Meanwhile—

the federal government’s—

effective funding of the States—

and territories—

remains as low as it has been in three decades.

He goes on to say:

While these two observations may be controversial, they are based on a straightforward interpretation of available published information.

According to the latest data produced by the ABS—

the federal government’s—

tax/GDP ratio was 24.9% in 2005-06, the same as in 2004-05 … This is the highest “tax-take” recorded since at least 1961-62. Not that there’s anything wrong with that; indeed, the only way to fund lots of spending and tax cuts while still producing sizeable Budget surpluses is to collect heaps of revenue in the first place.

The federal government for most of this century has collected more tax revenue and kept more of it for itself than ever before. Mr Robertson continued:

Looking at a century-long chart showing—

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