This fact sheet looks at how Australia raises very little tax revenue compared to similar countries and that while Australian governments have a problem balancing revenue and spending, that the problem lies in the level of revenue collected, not the amount spent.

Key findings

• Only eight international economies have lower tax to GDP ratios than Australia, and include relatively low-income countries.
• The ten countries that are rated as happier than Australia, including the five Nordics, all have higher levels of tax. 

Recommendations to raise more revenue

• Reduce superannuation tax breaks, which overwhelmingly benefit the wealthiest and cost over $50 billion each year in foregone revenue.
• Eliminate fossil fuel subsidies, which cost $14.5 billion in 2023–24.
• Increase charges for the fossil gas industry, more than half of Australia’s gas exports pay no royalties and none pay Petroleum Resource Rent Tax.
• Impose a tax on carbon emissions, which would raise an estimated $70bn per year.
• Remove capital gains tax discounts and negative gearing; The Australia Institute estimates that the former alone will cost the government $15.5bn in lost revenue in 2024–5.5.