In our humanities class, we have been assigned an assessment task. We are to focus on one issue regarding Australia, and use our power of democracy to draft a letter to our selected member of Parliament. I have chosen the topic: Australian Tax Rates, and I will be sending a message to promote a change in the way our tax system works.
Part 1 – KWHL Chart
What do I already KNOW about the topic?
I understand from prior knowledge that Australia has one of the highest tax rates in the world. Australia charges working residents an excessive amount of tax, which can be as high as 45% for people earning over $180,000 a year. Along with this, I have seen many Australians voice their opinion on this matter, and discuss how unfair it is that Australia has such high taxation rates. I understand that many people want it to change, and want taxes to be reduced and I am going to attempt to influence that change. This is an issue, at the Federal level of Australia’s Parliament, meaning it is a National issue.
Based on my views of Perth, I know the infrastructure is exceptional. Aussie’s have free healthcare, great aged care facilities, public transport, and many more benefits. I know that taxes pay for welfare, health, defence and education, but, I feel that the tax rates are just too high for a normal citizen. Let’s say you study and go to a good university. You learn and spend all your time focusing on academics, so that when you finally graduate you can work in a good, high paying job such as a doctor. This makes you proud and happy but you realise that you have a lot to pay in tax based on your income. For example, if I am doctor earning $170,000 a year, I will pay an average of approximately 27.5% of my income as tax! This is a significant rate of tax for that level of earnings and I would want to know why I had to pay this much, and where it could be reduced.
Another thing that I know on this topic is that Australia spends a lot of money on defence. From my understanding, Australia uses funds from the high tax rates to fund Australia’s defence force. This is something which I am in great support of. I would not want to lower the money the Government spenders on our defence force, as the global issues/wars occurring at this present time would put our country and risk and could impact on our safety. It would be irresponsible to cease funding our defence force as it could put our country in jeopardy. It is good that Australia maintains a high grade and advanced military, as it protects us against other global powerhouses like Russia, China, etc. We must ensure we have a great defence force, to protect us, and the ones we love.
I support the use of taxes to fund education. Australia needs to ensure that our future generations are well educated, so that we can continue to develop, thrive globally and advance our world with new technology and ideas. Without funding to education, and to universities, many Australian’s could find themselves in hard life situations, as they may lack school intelligence, and the knowledge required to sustain themselves in an ideal life.
I know many Australians would advocate for tax cuts but I know many taxpayers support our defence and education goals as a nation. I do think that there is scope to help Australians with tax cuts because it is a hot topic for many people.
If the member of parliament whom I write to is not supportive of my idea, there is something else which I know I must fix. The funding and support of Indigenous Australians. I am aware that the government is already using tax money to help with this, but if my request by parliament was rejected, I would then still insist that we create a better life for Indigenous Australians. Based on previous holidays I have been on, such as trips to Kununurra, Onslow, and Darwin, I have always noticed struggling Indigenous Australians. I have been a first hand witness to the alcohol and drug addiction they experience, as well as the anger and trouble these addictions cause. Many of these issues are born from a lifetime of hardship and suffering caused by policies of the past. Indigenous Australian’s lives needs to be changed for the better, and since they were the original owners of the land it would be beneficial to fund rehabilitation programs, promote Indigenous education and businesses and ensure that we allow the true Aussie’s to have a better way of life.
WHAT do I want to know?
- I want to know where the money collected as taxes is going. I want to see what exactly the money is being spent on, and what percentage is being spent on differing government activities. I want to know how the money being taxed can be reduced, and in what ways can that be achieved.
- The main thing which I want to know is whether the money collected in taxes is being put to good use and spent properly. In order for me to understand the changes required, I need to further understand the issue at hand. I want to research and learn exactly how much money is being spent on what, as well as how I can reduce it without harming Australia’s infrastructure, defence, health, education and our way of life.
- This will involve me understanding the way Australia’s tax system works in better detail, as I will need to know if it is even possible to alter the tax rates. I accept that tax spending is necessary to sustain our country including for things like healthcare and defence.
- It is vital that I don’t harm Australia in the process of pursuing a reduction in taxes, so I will need to understand exactly how much I can reduce taxes by without creating economic issues for our country. I know that we can’t reduce taxes too much, so finding the balance will be a great and interesting challenge for me.
- I also must understand how I can help Indigenous Australians. I will do this by researching how much is spent on Indigenous affairs and what charities and programs could make a world of difference to Indigenous lives.
HOW do I find out?
Websites – I will need to search across a variety of websites in order to understand this topic. I will have to visit government websites containing information on tax rates, tax expenditure, tax calculators. I expect there will be many articles on this topic. I will also research government spending on Aboriginal affairs, and get an understanding of other things funded by tax. This way, I can understand what needs to be done in order to create change.
Television & Social Media – With talk about the upcoming election, there is bound to be information on how taxes will be reduced based on which party is elected. Political parties will display their campaigns on television and will use social media to promote themselves. These campaigns will allow me to see how much the party’s are promoting a change, including to taxes, to gain political power. This can then allow me to understand what a reasonable reduction of the tax rate might look like.
News – The news including newspapers will cover topics on the financial state of Australia, including the tax rates. This is particularly because we are in the midst of a Federal election. By scanning a range of news and financial newspapers, I should be able to find out the publics opinion on this matter, which will create a more persuasive argument to the MP I am writing to.
Part 2 – Research Guide:
What is the Topic?
The Topic which I have chosen to cover is Australia’s tax system. The tax rate in Australia is brutally unfair, and excessive. I believe that with some vigilance, the government can reduce, or better manage its spending, on health care and “other purposes” (a category of government spend – see document below called “Tax Receipt”). I think large corporations should fund our health care costs if they are deemed to be polluting the environment through carbon emissions. While it is only a small step, some reform in healthcare could create a better economy, better lives for the Indigenous, while maintaining our general way of life. The monies collected from those large corporations could fund healthcare and tax relief could be provided to the millions of Australian workers.
Main Information/Resources:
https://www.ato.gov.au/rates/individual-income-tax-rates/
https://www.nerdwallet.com/article/taxes/federal-income-tax-brackets
- Based on this evidence, we can see that the tax rates for Australia is much higher than the USA. The percentage taxed after AUD $180,000 for a person living in Australia is 45%. This means that for every dollar you make after this, you lose 45c of that to taxes. Compared to America, a person who is making $539,901 USD is taxed is only 37% after the $539,900 mark. This is a major money gap between the two country’s, and it is evident that Australia needs to implement a change.
https://newsroom.unsw.edu.au/news/business-law/why-australias-unfair-tax-system-needs-overhaul
- A segment from this website, discussing the unfair tax payments that Australian millionaires pay.
- This is a government article published by the Australian Parliament. It displays the variety of funds that tax is spend on, as well as the tax expenditure over the last couple of years. It is evident that the expenditure went dramatically up during the beginning of the COVID-19 Pandemic, and afterwards it made a slow and steady decline. This allows me to understand what the tax is being spent on, allowing me to research the ways I can change it.
- An article regarding the Social Security and Welfare expenditure in Australia. It displays what aspects the Social Security and Welfare tax bracket covers, which allows me to view the changes the I can make. Based off of this, I do not want to implement any changes to it. We need all of these funds to allow Australia to be a functioning, and great country.
- A calculator to determine how much tax you should be paying based on your income. This allows me to strengthen by argument by using exact numbers based off of the average job salary in Australia.
<https://www.wungening.com.au/alcohol-and-other-drugs-support>
- An Indigenous Australian rehabilitation charity fund. This is useful, as I can use this charity/rehabilitation site to influence the PM on where to direct the money to.
- These two websites provide information on Australia’s tax rates over the years, so I can compare Australia to what it used to be.
https://www.creativespirits.info/aboriginalculture/health/aboriginal-alcohol-consumption
- A site displaying the percentage of Indigenous Australians who drink alcohol/are addicted to it. It has an extensive range of good information regarding the statistics of Indigenous Australian’s, so it will help strengthen my argument by using exact facts and numbers.
https://en.wikipedia.org/wiki/Carbon_pricing_in_Australia
- This site displays the previous carbon emissions taxes, and how it occurred. This will be useful, as I will be attempting to bring this tax back.
- This graph displays where our taxes go. It is issued to many standard civilians if they pay their taxes.
Type of Issue
This issue is a National issue, and is a matter for Federal Parliament which I can take up with my local MP.
Key Points/Different Sides of this Issue:
Australia has exceptionally high tax rates, and it needs to change. The money is not being spent well, and it must change so that government funds are managed better. An example of this is the free healthcare. In Australia, the healthcare is amazing. We have amazing benefits when it comes to dealing with sicknesses/other harmful diseases. My issue is that we pay too much money for what is actually being used. We know that the healthcare is under pressure despite all the funding hospitals receive for health care. Most Australians pay for private health insurance and yet $10 billion of tax dollars is spent on health care in Australia with most Australians not even fully utilising the health care system. Yes, Australia is great due to its healthcare, but with over a sixth of our tax money being used for the free healthcare, we pay too much. If we can reduce our spend just 5-10%, we can provide tax relief to Australians. It will give Aussie’s more money, and help boost the economy.
Many Australians are paying hundreds of dollars per month in private healthcare, so there is really no need for all of this healthcare tax. We pay too much as it is, and it should be reduced. Instead, tax the large, rich corporations who are creating carbon emissions. Make them pay more tax. Make them , in effect, pay for healthcare, as they are ruining the environment and no doubt contributing to pollution. Although the carbon tax idea has failed in the past due to the large influence these corporations have on politicians, we should try and reintroduce them. Those corporations should help fund the healthcare system – not ordinary Australians.
If the government do not choose to listen to this advice, then I argue for them to redirect between 10-15% of this healthcare money, to Indigenous Australians in our community, and in other rural outback areas. It will make Australia a more complete country, as we will give back to the true Australians. I propose they do this by donating to rehabilitation centers, education facilities and supporting local businesses in those regions. This will support the Indigenous communities and enable the Indigenous Australians to have a better quality of health and better lives. For example, funding the Wungening Alcohol and Other Drugs Service. It allows Indigenous Australians to seek help and medication to fight drugs and alcohol addiction.
Who was involved:
- Working Australian citizens
Australian citizens are involved, as the tax rate impacts them. They are the people affected, and they are the people who I am creating a change for.
- Australian Government
The Labour Party is the head party of Australia’s Parliament at the time of this assignment, so they will be the people whom I write to. They are the people who will address my issue, and hopefully adapt it into their own ideas. If the government changes in the election, I will write to the relevant party.
- Indigenous Australians
If my idea is discarded, my second idea is to transfer more healthcare funds to the Indigenous people. This allows them to have a better way of life.
Why is this issue important – What impact does it have?
Issue #1
This issue is the main issue I am focusing on, which is the reduction of Healthcare tax by anywhere from 5-15%. This issue is very important. It impacts Australians in their day-to-day life, as the money they work for and earn through hard labour is being stolen through heavy, unnecessary tax. The government is taxing us too much for the facilities which we actually utilize, as many people do not utilize the free healthcare as much as we are taxed for it. It would be better for Australians if Parliament reduced the money spent on healthcare and looked to make cost savings. For example, somebody earning $200,000 a year would be taxed $65,000. This means they would only walk away from the year with $135,000. It is still a lot of money, but the $65k being taxed must be reduced. If you reduced the tax by as little as 10%, you would save $1,000. It may not seem like a lot, but imagine if somebody gave you a free $1k. It would be amazing. You could feed your family and buy other household goods or go on a holiday and encourage local spending. The government can reduce its healthcare spend, noting many people are privately insured and better manage its money. I insist that if spending cannot be reduced, we tax large corporations producing carbon emissions the money to fund Australia’s healthcare system. It is important, as they should pay for ruining the environment for the future generation.
Issue #2
The second issue is the funding of Indigenous Australian programs, education and rehabilitation centers in rural and urban areas. It will allow the struggling Indigenous people to find their feet in this world, and create a better life for themselves. This is very important, as many Indigenous people have become victims of their circumstances and have turned to smoking, drugs, and drinking. Born into struggling families, many Indigenous Australians out in the Pilbara are also suffering from addiction. We cannot allow the traditional owners of Australia to suffer and be unsupported. Something must change. And that is why I propose that if you do not lower taxes, you redirect some funds from healthcare to fund Aboriginal programs, education rehabilitation centers. Even 2% of money going to healthcare can be diverted. After all, 2% is not much for Australia, but it is a lot for the Indigenous to find their ground and make amends with history.
When did this issue begin – How long has it been going on for
When did this issue begin – How long has it been going on for?
On resources above, the tax rate became increasingly high over the last couple of decades. Originally going up due to the world war, the taxes just kept increasing to be a reliable source of income for the government. The mid 1970s were when this income began to make a steady increase.
How can we solve this issue?
The Australian Government could lower taxes by just as little as 10% to solve this issue. It would save Australians a lot of money, allowing for them to spend it on daily needs, as well as cars, houses, and other necessary purchases in today’s society. As well as a boost to the economy, it would make citizens happier to be Australian then ever.
They could also force large corporations whom are emitting large amounts of carbon to pay this extra 10% for the people of Australia. After all, they are ruining the environment, so they should pay.
If the government was against this idea, they could then help Australia’s true people by redirecting roughly 1-5% of money taxed to Indigenous Australians. The way I propose you do this is by funding education and rehabilitation centers in those regions, so the Indigenous Australians can develop a more healthy lifestyle. Places like Onslow, Broome, and Darwin are all examples of this, as many Indigenous people struggle with alcohol and addiction.
Bibliography – All sources used throughout process – URL’s Alphabetically sorted:
- Policy Brief A super waste of money Redesigning super tax concessions Matt Grudnoff. (2015). https://australiainstitute.org.au/wp-content/uploads/2020/12/Super-Waste-of-Money-FINAL.pdf
- Wikipedia Contributors. (2022, May 10). Carbon pricing in Australia. Wikipedia; Wikimedia Foundation. https://en.wikipedia.org/wiki/Carbon_pricing_in_Australia
- z3375498. (2020, June 25). Why Australia’s unfair tax system needs an overhaul. UNSW Newsroom. https://newsroom.unsw.edu.au/news/business-law/why-australias-unfair-tax-system-needs-overhaul
- ParlInfo – Same old Labor: spending, waste and mismanagement. (2020). Aph.gov.au. https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id:%22media/pressrel/8YXU6%22
- pay calculator. (2022). Paycalculator.com.au. https://paycalculator.com.au/
- https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/BudgetReview201920/SocialSecurityWelfare
- Economic benefits of better procurement practices Consult Australia 2015. (n.d.). https://www2.deloitte.com/content/dam/Deloitte/au/Documents/Economics/deloitte-au-the-procurement-balancing-act-170215.pdf
- Australian Government expenditure. (2020). Aph.gov.au. https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/BudgetReview202021/AustralianGovernmentExpenditure
- Individual income tax rates. (2021). Ato.gov.au. https://www.ato.gov.au/rates/individual-income-tax-rates/
- Jens. (2022, May 15). Aboriginal alcohol consumption. Creative Spirits. https://www.creativespirits.info/aboriginalculture/health/aboriginal-alcohol-consumption
- Parys, S. (2018, January 24). 2021-2022 Tax Brackets and Federal Income Tax Rates. NerdWallet. https://www.nerdwallet.com/article/taxes/federal-income-tax-brackets