Fact check: Have personal income taxes risen by a 'record' 23 per cent under Anthony Albanese?

The current claim

Opposition Leader Peter Dutton has used a speech to a national summit on small business to attack the government over its management of the economy.

"Personal income tax has risen by a record 23 per cent under the Albanese government's watch," he said during his April 3 address.

If that sounds familiar, it may be because Fact Check recently tested a similar claim made by Shadow Treasurer Angus Taylor, finding it to be overblown.

Previous claims

In January, Mr Taylor cited national accounts data published by the Australian Bureau of Statistics to claim:

"[I]n the first 18 months of Labor's time in office, personal income tax had increased by a record 27 per cent."

Shadow Treasurer Angus Taylor says personal income tax has increased by a "record" 27 per cent in the first 18 months of the Albanese government.

At the time, a spokesman for the shadow treasurer told Fact Check this figure was calculated by comparing the national accounts' quarterly personal income tax figures for March 2022 and September 2023, the latest quarter for which data was then available.

This showed that total income tax paid by individuals increased by 27.3 per cent over 18 months, from $71.5 billion to $91.0 billion.

Strictly speaking, that period included two months under the previous Coalition government, with data only available for the first 16 months after Labor won the May 2022 election.

Ben Phillips, principal research fellow at the Centre for Social Research and Methods at the Australian National University, said the inclusion of these two months was problematic, noting that over the 15 months from June 2022 to September 2023 the increase was a lower 23.9 per cent.

Crucially, Mr Taylor's 27 per cent figure did not amount to a record rise, with national accounts data going back to 1961 revealing greater 18-month increases under various prime ministers.

The increase in personal income taxes paid by Australians between March 2022 and September 2023 was not a record. (Pixabay: public domain)

Under Labor prime minister Gough Whitlam, for example, tax receipts spiked by 107.2 per cent. In the first 18 months after Liberal prime minister Malcolm Fraser was elected, they rose by 41.7 per cent.

There were also larger historical rises when the tax figures were viewed as a proportion of gross household income, which experts recommended as a better measure for assessing tax increases.

So, what's changed?

Last month the ABS released national accounts data covering the December quarter of 2023.

Despite showing a quarterly decrease in personal income taxes paid by individuals, the latest figures prompted fresh claims of an extraordinary rise under the Albanese government.

According to Mr Dutton, personal income tax had risen by "a record 23 per cent" since the election.

At the 2022 election, Labor promised to maintain the Coalition's legislated tax cuts. Here's how that promise is tracking.

And during a March 26 address to the Australian Financial Review Banking Summit, Mr Taylor said:

"Personal income taxes are 23 per cent higher than before the election — an extraordinary number."

Fact Check contacted Mr Dutton's office for the source of his claim but did not receive a response.

However, a comparison of the March 2022 and December 2023 quarters shows that the increase in personal income tax over the last 21 months was 22.9 per cent.

This is close to Mr Dutton's 23 per cent figure but, like Mr Taylor's original claim, includes two months of Coalition government.

Using the June 2022 quarter as a starting point cuts this down to 20 per cent over 18 months.

Still not a record

These figures still do not represent a "record" increase.

As the graph shows, the historical data points to much larger increases over 21 months under numerous other prime ministers — among them Robert Menzies, John Gorton, Gough Whitlam, Malcolm Fraser, Bob Hawke and John Howard.

Experts previously told Fact Check that several factors had contributed to the recent jump in tax collections.

They highlighted the role of increased economic activity coming out of the COVID-19 pandemic and strong population growth, noting that when incomes go up, so does the amount of tax paid by Australians on average.

Measuring the tax take as a proportion of gross household income shows, once again, that there were larger increases under other prime ministers.

Mr Dutton's claim inflates the increase under Labor by making a comparison that incorporates two months of the Coalition's term, and even that inflated figure is not a record increase.

For these reasons, Mr Dutton's claim is also overblown.

Principal researcher: RMIT ABC Fact Check managing editor Matt Martino. Original research by Ashleigh Webb.

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This article was undertaken through a collaborative partnership between RMIT University and the ABC, which concluded in June 2024. The article should be attributed as "RMIT ABC Fact Check [date]"

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