Do you understand their true scale?
Most people would love to pay less tax.
Lower taxes means more money in our pockets to spend how we choose.
However, there are two sides to every coin — each dollar not collected through taxes is a dollar of lost revenue for the government.
That means less money to spend on services, infrastructure, and all the other things we rely on as a society.
Five years ago, the Coalition government announced a package of three staged tax cuts, which it said would stimulate the economy, tackle bracket-creep and reward Australians for their hard work and aspiration.
The stage 1 and stage 2 cuts have been implemented, delivering tax cuts to low and middle-income earners.
The stage 3 cuts passed Parliament in mid-2019, and are scheduled to come into effect next year. They will see everyone earning between $45,000 and $200,000 paying 30 per cent in tax.
The cost of the stage 3 cuts to the national budget is estimated at $243 billion over the next 10 years.
A figure of that size can be pretty hard to wrap your head around, so let’s put it into perspective. We’ll start with some concrete figures to help make the picture clear.
This little block represents the average Australian salary.
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Check out the interactive version on the ABC News website.
It's pretty tiny, but you'll be thanking us for that soon.
Next, imagine the average house in Sydney's prestigious Rose Bay at around $5 million.
That's equivalent to 54 years' work on the average Aussie wage.
Line up 20 of those houses in a row, and you have enough cash to afford a private jet.
Think we're getting close to the $243 billion from the tax cuts?
Think again.
This is $243 billion.
It's enough to make some pretty expensive things seem like a drop in the ocean.
Take, just for example, a pedestrian bridge that's currently being built across the Brisbane River.
When shown here, its $190 million price tag seems rather modest.
The Royal Adelaide Hospital, which cost a tidy $2.4 billion, suffers a similar fate.
This is despite it being one of the most expensive buildings in the world.
And still, we could build 100 of them around the country with $243 billion.
Last year, the Bureau of Meteorology (BOM) tried and failed to rebrand itself as "The Bureau".
This prompted headline after headline focusing on the $220,000 cost.
However, it's a needle in this $243 billion haystack. Can you spot it?
At that price, you could rebrand the BOM once per day for more than 1,000 years.
The size of these tax cuts isn't the whole story, though.
It's also who stands to benefit from them.
We've just reached the $53 billion mark – let's pause here for a minute.
We're just over a fifth of the way through.
Australians who make less than $120,000 per year will get a share of the money above this line.
And $53 billion might seem like a lot to go around.
But consider this: it still leaves $189 billion for those making more than $120,000 a year – that's almost 80 per cent of the cuts.
Something to think about as we scroll through the money going to the top 14 per cent of our income earners.
The money keeps going...
...and going.
These tax cuts have been agreed upon by both major parties.
Choosing to cut taxes means the government has to make different decisions about other things. Like say...
Lifting the rate of the JobSeeker unemployment benefit.
The Albanese government is under fresh pressure to increase JobSeeker, after its own Economic Inclusion Advisory Committee said the current rate is too low.
The committee said that it forced people to "choose between paying for their medicine or electricity bills".
It recommended the government lift JobSeeker so it's equal to 90 per cent of the aged pension.
For a single person with no kids who is receiving benefits, that would mean an extra $90 in the pocket each week.
The government has signalled it won't be backing a substantial increase to welfare payments, saying it "can't fund every good idea".
That's undoubtedly true.
But at an estimated $75 billion over 10 years, raising JobSeeker would cost far less than these tax cuts.
The politicians telling us we can't afford it make well over $180,000 per year, which puts them in the small group set to receive almost half of the money from the tax cuts.
But really, whether or not you think Australia should lift its welfare payments is a bit beside the point.
What matters is the size of this box.
And that the revenue lost through these tax cuts could pay for something like this three times over.
How we use Australia's wealth is a choice — and raising the JobSeeker rate is only one option among many.
With $243 billion, we can afford almost anything you can dream up.
Want to make university free for every kid in Australia? No problem.
More roads, bridges and tunnels? Sure, we could triple our transport infrastructure spending.
How about knocking almost 50 cents off the price of petrol at the bowser?
At the end of the day, everyone will have their own preferences about how we should spend it.
Either way, you're probably pretty sick of all this scrolling.
Luckily, our final trick requires no extra scrolling at all.
We're going to zoom out on the whole $243 billion in a last ditch effort to put things into perspective.
Here we go...
The spending decisions that make up a budget don't all carry the same weight.
Just as an overseas holiday can blow your budget for nights out for months, the most expensive policies can rule out several cheaper alternatives.
For the national budget, the stage 3 tax cuts are more like a holiday than a schnitzel at the pub.
Many people may indeed prefer this money is left in Australians' pockets through tax cuts.
But even then, it's worth understanding their scale, who benefits from them, and the choice that's being made about all these boxes of money.
Editor's note (May 12, 2023): This story has been updated since publication to include more relevant context, including the original reasoning for the tax cuts and background on the stage 1 and stage 2 cuts for low and middle-income earners. There were no inaccuracies in the original story. The story is clearly framed as an illustration of the size of the tax cuts, not as a debate over their merits.
Credits
- Reporter and developer: Julian Fell
- Designer: Ben Spraggon
- Editors: Matt Liddy, Cristen Tilley and Tim Leslie
About the data
- Average salary: $1,769.8 per week (ABS)
- Rose Bay median house price: $5.5 million (REA Group)
- Gulfstream G650ER: $66.5 million USD (Corporate Jet Investor)
- Brisbane pedestrian bridge, Kangaroo Point: $190 million (ABC)
- Royal Adelaide Hospital: $2.4 billion (ABC)
- BoM rebrand: $220,000 (ABC)
- Stage-three tax cuts total cost: $243 billion (PBO)
- Free university: $6.9 billion per year (Australia Institute)
- Percentage of Australians making over $120,000: 14 per cent (ATO, Taxation statistics 2019–20)
- Transport infrastructure spending over 10 years: $120 billion (Jim Chalmers)
- Stage 3 tax cuts distributional analysis (Matt Grudnoff, Australia Institute; derived from PBO)
- Raising JobSeeker to $958 a fortnight: $75 billion over 10 years (PBO Build Your Own Budget Tool). (Ben Phillips from ANU has estimated the cost of increase at $67 billion)
- Halved fuel excise for six months in 2022: $5.6 billion (Budget review 2022-23)
