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Mandy Money

Mandy Money

how taxes are spent

Ever wondered where all those tax dollars of yours get spent??  Look no further, mandy’s got you covered…

Before we dive into the nuts and bolts, lets ask a simple but important question…

What types of taxes are there in Australia?

  1. Personal taxes – income from job, profits from investments
  2. Business taxes – company profits and payroll
  3. Property taxes – think stamp duty and land tax
  4. Consumption taxes – this is where GST, and taxes on alcohol, gambling and petrol come into play

In 2019, these taxes provided Australian governments (federal, state and local) with a whopping $560 billion of tax revenue. The Federal Government took 81% of the cut, with 15% distributed to state governments, and 3% allocated to local governments.

So… how is this cash spent at a Federal level?

The Federal Government spending can be categorised in five major buckets:

  1. Welfare (think Centrelink) = 36%
  2. Health = 15%
  3. Education = 7%
  4. Defence = 6%
  5. Everything else = 35%

Some of this gets passed down the line…

Yep that is right. Some of this federal spending actually comes in the form of distributions to state governments.

And the state government also hands down cash to each local government.

So despite you paying tax straight to both your state and local governments, the Federal government still gives them a top up!

And all this money is spent on all those essentials, like transport, culture, community services and local business support.

Knowing how many things our taxes are spent on, makes it a little less painful to pay them.

 

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