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.)