To help place developments in revenue in perspective, and identify trends that can be obscured by short-term fluctuations, this report examines trends in Australian Government receipts over three decades.

Australian Government receipts have averaged around 24.1 per cent of Gross domestic product (GDP) over the past 30 years, with fluctuations in individual years. Economic growth has been the main driver of receipts. Despite significant tax reform over the period, the net impact of policy decisions changing taxation rates and coverage had a much less significant impact on total receipts.

While still the largest source of receipts, taxes on labour have fallen from 12.2 per cent of GDP in 1982–83 to 10.9 per cent of GDP in 2012–13. This reflects a decline in personal income tax that has more than offset the impact of the introduction of new taxes on fringe benefits and superannuation contributions. The reduction in personal income tax reflects, in equal measure, a reduction in the wage share (the proportion of GDP received by labour) and the impact of tax cuts in excess of ‘bracket creep’ on the average personal income tax rate.

Other taxes and charges include sale of goods and services, interest and dividend receipts, and a range of other tax and non-tax receipts. They declined from 2.6 per cent of GDP in 1982–83 to 2.0 per cent of GDP in 2012–13. The main driver of this decline was that interest receipts fell by over 1 per cent of GDP, as the federal government ceased borrowing on behalf of the state and territory governments.