Scott Morrison is Australia’s biggest taxing prime minister since John Howard. He imposes a taxation burden on Australians that is much higher than when Labor was in government, and he is hellbent on ensuring that the dip in tax revenue caused by the recession is reversed and taxes soar back to the heights he previously “achieved”. By 2025 he intends for us to pay well over half a trillion dollars a year in tax.
That’s the truth, according to Morrison’s own budget papers.
Press gallery stenographers, however, are happy to repeat verbatim Morrison’s lies about his government being committed to lower taxation. It’s a serious journalistic failure that misleads readers, and augurs poorly for coverage of the coming election campaign.
The fiscal picture will change somewhat when the government unveils the Mid-Year Economic and Fiscal Outlook tomorrow, but the trajectory will not: this is a high taxing government. This is how much the government has taken and expects it will take in taxes, in cash terms and in terms of GDP.
Taxes under Labor averaged 20.9% of GDP. Under the Coalition, they’ve averaged just over 22% of GDP. The budget earlier this year sees the government taking an average of 21.3% over the next four years.
Even during the pandemic and recession years of 2019-20 and 2020-21, Morrison was still taking more than Labor ever took in taxes. But at least the pandemic and the recession thwarted Morrison’s plan to re-impose punitive Howard-era levels of taxation — the 2019 budget forecast tax: GDP levels of well over 23%.
That is, Morrison and Frydenberg’s mythical “Back in Black” campaign was on the basis of jacking up taxes to more than three percentage points of GDP higher than Labor. To see journalists peddling the claim that Morrison is committed to lower taxes, despite what’s there in black and white in budget papers, suggests extraordinary laziness, or something even worse.
Morrison is addicted to high taxes because he’s also addicted to high spending. He presides over the biggest government of the modern era, with spending soaring to nearly 28% of GDP in 2019-20 and nearly a third of GDP in the pandemic year of 2020-21. All entirely justified, of course, but he plans to keep spending at over 27% this year and next, and over 26% for the following two years. In 2025, five years after the pandemic began, Morrison’s government plans to still be spending a third of a point of GDP more than Kevin Rudd spent at the height of his stimulus program in 2009.
If this funding was being spent on nation-building or improved education and health services, it could be portrayed as sensible investment in our nation’s capital stock at a time of record low interest rates. But much of the spending was either wasted — via the tens of billions lost in JobKeeper payments to profitable companies — or handed to the government’s mates. Tens of billions in subsidised rail infrastructure for coal companies (faked up as capital investment); handouts to fossil fuel companies that — unlike the rest of us — pay no tax; bribes to the National Party; and billions in rorted grants programs.
Too many journalists see fiscal policy through a prism crafted by John Howard and Peter Costello — that the Liberals are the party of small government and low taxes. Howard and Costello ran a party of big government and punitively high taxes. But Scott Morrison goes one worse — his government is one of taxing Australian workers and businesses and channelling the proceeds to its friends.
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