$5000 of Your Tax Goes to Welfare

An analysis from the Tax Institute revealed that $5000 of the tax paid by an average Aussie worker goes to welfare. Another way of looking at it is that a single worker shells out about $100 weekly to fund the government budget. 

Workers’ taxes essentially pay for the interest of the country’s $143 billion net debt. 

According to the Tax Institute, about 35 cents of every dollar collected goes to paying for the welfare of other Aussies. The number has grown from the previous 33.3 cents. 

Papers show that the welfare and social security budget has jumped from $126.8 billion to $131.6 billion. 

Despite the big jump, Aussie families need not worry. The welfare budget essentially benefits low- and middle-income earners. A worker that earns an average salary of $69,000 can receive as much as $373 in tax cut. 

Taxes also go to education, health, defence, states, and transport. According to the Tax Institute, about $2,360 pays for health while $834 goes for defence. $1,144 is earmarked for education, $193 is for foreign aid and about $46 goes to the ABC. 

The analysis also showed that a family with two children and earning $99,000 can benefit from as much as $679 annually. They can also get more than $5,000 in school kids bonus, private health insurance rebate, and family tax benefit. 

Robert Jeremenko said despite the complexities of the country’s tax system, families just need to understand that they benefit from the taxes they pay. Jeremenko is a senior tax counsel from the Tax Institute.