Would You Support Earning Up to $100K Tax-Free?
It’s clear from the 2025 budget that everyday Australians are shouldering the country’s tax burden.
Nearly half of the government’s tax income comes from PAYG, which amounts to a staggering $335 billion, plus an additional $92 billion from GST—essentially a tax on consumers. As businesses pass on these costs, the consumers end up footing the bill, particularly since they’re the last link in the chain and can’t claim these taxes back. Excise and customs duties add another $43 billion to our tax load, affecting everything we buy: fuel, tobacco, beer, and more. Even superannuation taxes play into this.
Attempting to tax large corporations is often futile; they can always find ways to shift their profits to countries with lower taxes.
However, Australia has a unique advantage in its rich mining and resource sector. Why not implement a mining resources tax? A proposal could involve claiming 20% or 25% of any resources extracted from the ground.
Imagine the possibilities—this could lead to a significant reduction in income tax, potentially halving what we currently pay!
Resource Revenue Breakdown:
| Rank | Resource | Export Revenue |
|——|—————-|——————|
| 1 | Iron Ore | $137B |
| 2 | Coal | $91B |
| 3 | Natural Gas | $80B |
| 4 | Gold | $34B |
| 5 | Wheat | |
| 6 | Meat | |
| 7 | Oil | |
| 8 | Battery Materials | |
| 9 | Lithium | |
| 10 | Copper | |
In 2025, we exported $137 billion in iron ore alone.
Key Budget Figures:
- Total Receipts: The federal budget forecasts total receipts of $735.4 billion for 2025-26, projected to rise to $840.8 billion by 2028-29.
- Tax Receipts: Tax receipts, a major component of total receipts, are expected to be $676.1 billion in 2025-26, increasing to $778.3 billion by 2028-29.
- Income Tax Contribution: Income taxes are the largest factor driving the growth of tax receipts.
- Tax-to-GDP Ratio: Anticipated to be 23.5% in 2025-26, slightly decreasing to 23.4% by the end of the forecasting period.
- Individual Income Tax: Set to generate $335.6 billion for the 2024-25 budget.
- Company and Resource Rent Taxes: Projected to contribute $143.8 billion in 2024-25.
- Goods and Services Tax (GST): Expected to bring in $92.1 billion for 2024-25.
- Other Tax Sources: Fringe benefits tax, excise and customs tax, and superannuation taxes also add to the total tax revenue.
- Non-Tax Revenue: Includes interest, dividends, and other sources, making up a smaller share of total revenue.
- Potential Tax Cuts: Just think of the benefits that could come from revenue generated in this manner!
Your post raises some important points about the structure of the Australian tax system and the potential for reform. The idea of making the first $100K tax-free for everyday Australians is certainly provocative and would have significant implications for both individuals and the economy.
It’s clear that a large portion of the tax burden is shouldered by individual workers, especially through PAYG and GST, which ultimately impacts consumers. Your suggestion of a mining resources tax emphasizes an interesting angle; given Australia’s wealth in natural resources, leveraging this could indeed provide a more equitable revenue stream while alleviating some pressure from personal income taxes.
Implementing a resource rent tax or a fixed percentage on mining profits could potentially generate substantial revenue, which could be used to fund public services and infrastructure. The projected figures for resource exports make a strong case for this approach. If managed effectively, it could allow for a significant reduction in income tax rates, enabling individuals to keep more of their hard-earned money and potentially stimulating economic activity.
That said, there are challenges in executing such reforms. Concerns about the business environment, investment incentives, and the risk of companies relocating or evading taxes by changing their profit structures are all valid considerations. Additionally, there are political hurdles to navigating changes in tax policy, especially concerning entrenched interests in the industry.
In conclusion, while making the first $100K tax-free could be an attractive proposal for many Australians, it must be carefully balanced with the need for sustainable revenue generation through other avenues, such as a well-structured mining tax. A comprehensive approach that addresses both equity and efficiency in the tax system could be key to achieving fair outcomes for all Australians.