This report proposes that the widely-held claim that Australia is a low-tax country is misleading and risks distorting public policy debates. It explores the veracity of the ‘low-tax’ label in Australia by examining both absolute measures of the tax burden and relative measures based on international comparisons. It also examines the structure of Australia’s tax system, noting its unusually high reliance on personal and company income taxes and relatively low reliance on consumption taxes such as the GST.

Key findings

• Australia is not a low-tax country in absolute terms.
• Total taxation in Australia exceeds 34% of relevant measures of the total tax base.
• Common international comparisons are flawed. 
• Adjusted comparisons place Australia near or above average. 
• Bracket creep will increase the tax burden further. 
• Government expenditure has reached new heights (outside the pandemic era).