Since moving to Australia from Europe, in the mid-1990s, I have always been baffled by the country’s mindset of financial anxiety. We are a wealthy country, yet we behave as if we are struggling and impoverished. Saying that, this mindset is selective.
The Australian belief that there isn’t enough money to go around is firmly in place when it comes to discussions of protecting the environment or strengthening social safety nets, to take care of the homeless, long-term unemployed and families subject to domestic violence.
The other thing I have always been fascinated by is the ease in which Australians are duped about how we compare with the rest of the world. Too many never check, possibly because we live so far from everywhere else! This was happening long before the era of fake news. Over the years, I have heard comments on the news about Australia ‘being top’ in this area or in the top 3 or top 5 in that area. As a country we aren’t, but no one checks, so who cares.
One of the biggest lies fed to Australians (and accepted by them, possibly because it is an easy justification to not collectively give more money to governments) is that we are a highly taxed country.
In fact, Australia’s Tax-to-GDP ratio, compared to the rest of the OECD, clearly shows that we are ranked it 30th out of 38 OECD countries. Australia’s Tax-to-GDP ratio is 29.5%. The OECD Average is 34%.
France has the highest Tax-to-GDP ratio at 46.1%, Norway has 44.3%, and Denmark 41.3%.
As a country, Australia faces many environmental challenges, all well-known; from the impacts of global warming, 200 years of decimating the country’s wild species and poor management of the country’s precious water systems. As far back as 2005, Australia’s biodiversity intactness was shown to be one of the worst in the world. And in 2020, Swiss Re, the world’s second-largest re-insurer, confirmed of the G20 countries, Australia is ranked in second (worst) place, after South Africa, for failing and fragile ecosystems. A huge amount of money is needed to rehabilitate Australian’s environments nationwide.
Australia also needs to invest in tackling the housing affordability crisis, services for an aging population, providing a world class education for ALL the country’s children and Closing the Gap for the people of Australia First Nations to ensure they have the same opportunities and lifestyles.
The current reminder of Australia poverty mindset is the lack of funding for front line services and pathways out of abusive relationships. This year, violence against women has resulted in one woman being murdered every 4 days, almost always by a partner or ex-partner. An example of the anger many Australian feel was apparent on the ABC program Q&A. Criminology Professor and former police detective Vincent Hurley criticised panel members for politicising gendered violence instead of taking real action, saying, “How dare you go into politics, in an environment like this, when one woman is murdered every four days, and all you … can do is immediately talk about politics? That is just disgraceful”.
Such public feedback to politicians isn’t new, neither are the marches for justice, so what needs to finally change? As a country, if we want good quality social and environmental justice we need to pay for it.
So here is a simple exercise, how much more would be available to the government if Australia’s Tax-to-GDP ratio was simply the OECD average of 34%? Australia’s GDP in 2022 was US$1.693 trillion (AU$2.594 Trillion)
If Australia changed its current Tax-to-GDP ratio of 29.5% to the OECD average of 34%, increasing the Tax-to-GDP ratio by just 4.5%, this would give the government an extra AU$116 billion annually. Compare this figure to the one-off funding of $925 million (less than 1% of what would be available annually if our Tax-to-GDP ratio was just the OECD average) the Albanese government has put on the table to help victims of violence leave abusive relationships and enact a ban on deepfake pornography as new measures to combat violence against women.
Because of Australian’s neurotic mindset of paying more tax, the country previously voted out a Labor government that had effectively created a Sovereign Wealth fund, thanks to the country’s abundant natural resources, which would have been similar to that of Norway. The Abbott government was elected on the basis of repealing what it called a ‘Big Fat Tax’; it was one of the of the governments first actions when it came to power.
So Australia, if we want to save women and children from domestic violence, if we want to ensure the people of Australia’s First Nations have the same opportunities and lifestyles as everyone else, if we want to deal with the housing crisis, if we want to take care of Australia’s unique wildlife and heal our devastated environment, a first step would be to simply aspire to be average, OECD Tax-to-GDP ratio average.
If we can’t as a country aspire to be average, then let’s be honest, with no push for a sustainable solution is this just another form of virtue signalling?
Lynn Johnson is a physicist by education and has worked as an executive coach and a strategy consultant for over 20 years. In her work she pushes for systemic change, not piecemeal solutions, this includes campaigning for modernising the legal trade in endangered species, to help tackle the illegal wildlife trade.
