Kevin Rudd's claim that Labor has been a lower taxing government checks out

Updated

Prime Minister Kevin Rudd says Labor has been a lower taxing government than the Howard government was.

"Under this government, the tax to GDP ratio has, in the period we've been in office, [been] an average of 22.7 per cent," Mr Rudd said during the leaders' debate at the National Press Club on August 11.

"Under the Coalition, the average for the period they were in office was 25.1 per cent."

ABC Fact Check consulted the historical data section of this year's Budget papers to test this claim between the 1997-98 and 2012-13 financial years.

Tax averaged 21.4 per cent of GDP in the Labor years and 23.5 per cent in the Coalition years.

Tax to GDP (%) Average (%) 2012-13 21.5 21.4 2011-12 21.0 2010-11 20.0 2009-10 20.2 2008-09 21.7 2007-08 23.7 2006-07 23.8 23.5 2005-06 24.2 2004-05 24.2 2003-04 24.0 2002-03 24.0 2001-02 23.2 2000-01 24.1 1999-00 22.9 1998-99 22.3 1997-98 22.2

Mr Rudd is correct that the Coalition collected more taxes given the size of the economy during its time in power.

But his numbers are not accurate. His office did not respond to ABC Fact Check's request for the basis for his figures.

A second opinion

The Organisation for Economic Co-operation and Development (OECD) also records that Australia's total tax revenue as a percentage of GDP was higher between 1996 and 2007 than it was from 2008 until 2010, the latest data available.

The OECD uses a different revenue measure but its results show the same trend.

From 1997 to 2010, Australia consistently ranked in the lowest 20 per cent of 34 OECD countries measured by tax revenue as a percentage of GDP.

Economic advisory panel A panel of eminent economists has agreed to advise ABC Fact Check on its work on economic issues.

For this fact check, the following economists were consulted: Warwick McKibbin, Chris Caton, Chris Richardson and Bernie Fraser.

Meet the panel.

Some context

The global financial crisis that began in 2008 reduced company profits and investment income, which in turn resulted in reduced tax receipts for the government.

The decline in the current Government’s tax receipts was more a result of the global downturn which began during its first term than the result of any substantive policy changes.

The verdict

Mr Rudd's claim checks out, although ABC Fact Check was unable to substantiate the figures he used.

Sources

Topics: tax, rudd-kevin, alp, federal-elections, federal-government, australia

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