Page 1222 - Week 05 - Wednesday, 30 May 2007

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the federal government’s—

tax/GDP ratio since Federation in 1901 and overlaying it … with the latest four decades’ worth of ABS data, it is fair to say that Treasurer Costello … holds the record as Australia’s biggest-taxing Treasurer.

Recent record tax/GDP ratios would be less interesting if the Budget Papers did not show—

the federal government’s—

tax-take … actually below its average of the past quarter of a century. Of course … tax-take hasn’t slumped ... instead, … tax/GDP ratio and—

the federal government’s—

regular claim of “no increase in the overall tax burden from its 1996-97 level” rely on—

what everyone and every economist and every statistician with any credibility says—

its unusual treatment of GST revenue.

He continued to say that the federal government:

chooses simply not to count in its Budget the 4% of GDP worth of GST revenue the ABS counts, arguing that the GST is a “State tax”. The problem is that—

the federal government’s—

splicing of its post-GST series to the pre-GST series to create its preferred long-run Budget history did not involve a joining of “like with like”.

As Mr Robertson says:

Let’s be clear upfront: the critical issue here is not whether the GST is recorded as a “State tax” or not, it’s the need for any data series to be consistent over time to be credible. Any respectable tax/GDP measure must either count all tax collected by—

the federal government—

or present—

federal government’s—

revenues net of taxes collected for State and local governments over the entire period.

So—

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