By Andrew Mackinnon

Last updated: 10th August, 2022

As far as I can tell, the number of Australian citizens who submit a tax return in Australia is currently about 13 million and the average taxable income declared on these tax returns is about $65,000.

If there was only income tax in Australia at a flat rate of a maximum of 20% on all income earned, then the maximum taxation revenue the Australian federal government would raise in one year is 13 million x $65,000 x 0.20, which equals $169,000 million or $169 billion.

Around 2.5 million Australian citizens receive the Age Pension, at an average rate of about $850 per fortnight each, which amounts to an expenditure by the Australian federal government out of taxes paid by Australian citizens of about $55.3 billion per year.

In the order of 1.2 million Australian citizens receive unemployment benefits, in the form of the JobSeeker payment, at an average rate of about $750 per fortnight each, which amounts to an expenditure by the Australian federal government out of taxes paid by Australian citizens of about $23.4 billion per year.

Together, the expenditure by the Australian federal government on the Age Pension and JobSeeker each year totals about $78.7 billion, which is 46.5% of $169 billion.

This leaves $90.3 billion for the Australian federal government to spend on other things each year, which is 53.5% of $169 billion.

(I believe that Australian state and territorial governments should be abolished so that only the Australian federal government and Australian local governments remain.)

Following is a non-exhaustive list of what I believe should all be Australian federal government services, together with their proposed sources of funding:

Australian Bank (Currently privatised) – User pays – Transaction fees and account-keeping fees

Australian Water & Sewerage – User pays – Water bill

Australian Electricity (Currently privatised) – User pays – Electricity bill

Australian Gas (Currently privatised) – User pays – Gas bill

Australian Telecommunications (Currently privatised) – User pays – Telecommunications bill

Australian Post – User pays – Postage cost

Australian Ports (Currently privatised) – User pays – ?

Australian Motor Vehicles – User pays – Motor vehicle registration

Australian Maritime Vessels – User pays – Maritime vessel registration

Australian Railways – User pays – Ticket cost

Australian Buses – User pays – Ticket cost

Australian Airports (Currently privatised) – User pays – ?

Australian National Parks – User pays – Entry cost

Australian Parliament – Income tax

Australian Treasury – Income tax

Australian Courts – Income tax

Australian Police – Income tax

Australian Prisons – Income tax

Australian Roads – Income tax

Australian Fire – Income tax

Australian Customs – Income tax

Australian Hospitals – Income tax

Australian Schools – Income tax (~4.4 m students)

Australian TAFE – Income tax

Australian Universities – Income tax

Australian Defence (including border patrol) – Income tax

Australian State (i.e. external relations) – Income tax

Australian Trade – Income tax

Australian Immigration – Income tax

It is possible to run Australia on a budget of $169 billion per year collected from income tax only at a maximum rate of 20%.

(Australian local governments can continue to be funded via property rates if the income tax revenue collected by the Australian federal government at a flat rate of a maximum of 20% on all income earned is not sufficient to fund Australian local governments.)