Australia's place as a low tax nation

The Government continues to deliver first class services for Australians while maintaining a strong economy with low taxes and spending.

Australia is one of the lowest taxing economies in the developed world. In 2010, the latest year for which comparable international data are available, Australia (encompassing the Commonwealth, state, territory and local governments) had the fifth lowest tax-to-GDP ratio out of 34 OECD countries.

The Australian Government remains committed to keeping tax as a share of GDP lower, on average, than the level of 23.7 per cent of GDP it inherited in 2007-08. As revenue recovers, tax receipts as a percentage of GDP are expected to rise from 21.5 per cent in 2012-13 to 23.2 per cent by 2016-17.

According to OECD estimates, Australia's expenditure-to-GDP ratio for the general government sector was lower than those of all but two other OECD economies in 2012. Our low spending, combined with the responsible savings decisions we have taken over successive budgets, continues to ensure the long-term sustainability of the Budget position to provide room to fund our priorities while keeping taxes low.

General government tax to GDP ratio for OECD countries, 2010

Making room for the National Plan for School Improvement and DisabilityCare Australia

(a) Long-term savings from 2013-14 Budget and 2012-13 MYEFO, excluding Medicare levy and net of Dental Care Reform expenditure.