The Annual Per Capita Tax Survey (Tax Survey) provides an invaluable insight into the views held by Australians from across the country about the role of the tax and transfer system, and attitudes towards the role and value of essential public services in our national life.
Now in its 14th iteration, the 2024 Tax Survey arrives at a time when the need for fundamental reform of our federal tax system – to address long term structural budget deficits and to arrest growing levels of income and wealth inequality within and between generations – is obvious and increasingly urgent. Yet in our ever more fractured and febrile political context, such reform has perhaps never been harder to achieve.
The 2024 Tax Survey was conducted towards the end of a year that saw the financial pressure on low and middle-income households at record levels.
Following the fiscal stimulus pumped into the global economy during the pandemic, and the impact of significant supply constraints due to international wars and trade disruptions, inflation soared across the world in late 2021, peaking in Australia in December 2022 at 7.8%. The rapid increase in the price of essential goods and services created an economic shock for households that was unlike anything experienced in more than 30 years.
The aggressive monetary policy response by the Reserve Bank, which lifted interest rates higher and faster than at any time since the early 1990s between May 2022 and December 2023,[1] combined with considerable fiscal restraint in delivering two successive federal budget surpluses, gradually reduced inflation so that, by the time of this survey, it was well on the way back to the RBA’s target band of 2-3%.
Yet this fall in inflation had yet to be felt by households when we surveyed them in November 2024, while the record lift in interest rates in the preceding year massively increased the cost of a mortgage for ordinary working families and squeezed many small business margins to the point of collapse.
While Australia’s unemployment rate remained historically low, avoiding the prospect of throwing another 80,000 – 100,000 working people out of their jobs (as some economists claimed was necessary to tame inflation) these combined pressures created a “cost-of-living” crisis that has cruelled the living standards of roughly two-thirds of the Australian population over recent years.
At the same time, around one-third of Australian households – those who own their home outright and have income from investments – apparently have been barely affected by these pressures.
It is in this context that the 2024 Tax Survey finds a significant increase in the proportion of people who believe the tax and transfer system is not working adequately for them.
In fact, given that the transfer side of the system is meant to redistribute our collective national prosperity to reduce inequalities of wealth and income and provide opportunity for people to build a secure and comfortable life, it is cause for concern that around two-thirds of Australians say the system either does nothing to reduce income and wealth inequality, or actually makes it worse.
[1] https://www.rba.gov.au/statistics/cash-rate/
Key findings
Perceptions of Australia’s Public Services
On a scale of 0 – 10, with 0 being “poor” and 10 being “excellent”, Australians score our public services highest for usefulness (6.41) and quality (6.23), followed by value for money (6) and ease of access (5.97).
Government spending on Public Services
67% of those surveyed want government to spend more – either a little or a lot – on public services. Fewer than one in ten believe such spending is too high, a number which has barely shifted since 2014.
More spending on health: 85.6%
More spending on education: 68.1%
More spending on social security: 57.7%
More spending on defence: 40.5%
More spending on overseas aid: 15.3%
A record 60.29% of respondents would personally be willing to pay more tax for better health services.
Feelings about your own personal tax obligations
47.2% of respondents believe they personally pay too much tax, the highest in a decade.
Fewer than half believe they pay about the right amount of tax (42.8%).
Fairness of the tax system
- 74.3% of respondents believe big businesses and corporations don’t pay enough tax.
- 64.5% of respondents believe high income earners don’t pay enough tax.
- 81% of respondents believe corporate tax avoidance affects the overall fairness of the tax system.
- 63.8% of respondents say there should be a minimum tax rate for high income earners (top 1%).
Effectiveness of the tax and transfer system
What impact do you think the tax and transfer (spending) system, has on inequality of wealth in Australia?
- Increases wealth inequality: 38.9%
- Has no impact on wealth inequality: 22.9%
- Decreases wealth inequality: 17.8%
- Not sure: 20.4%
What impact do you think the tax and transfer (spending) system, has on inequality of income in Australia?
- Increases income inequality: 34.6%
- Has no impact on income inequality: 25.4%
- Decreases income inequality: 18.5%
- Not sure: 21.6%
