When is a tax not a tax? When the government doesn’t want to admit that it’s imposing yet another tax. So, they call it a “levy”, a “duty”, or even just a “price”. Because they know perfectly well that if they were thieving yet more of people’s hard-earned in taxes, they’d be as popular as a bacon sandwich in a mosque.
It’s the gambit Julia Gillard tried on, when she argued that her carbon tax — which she’d explicitly promised not to introduce — wasn’t a “tax”, just a government-mandated price on carbon.
Which walks, quacks and poos all over the place just like a tax.
But that has never stopped governments from reaching ever-deeper into taxpayer’s pockets — just don’t call it a “tax”.
The first levy was put in place in 1929 by the Bruce government at the behest of the wine and grape industry. It wanted a secure funding stream that could be channelled into research and development.
That was the original idea with levies. An industry put up its hand and said we’d like a little bit of taxation that gives us the cash necessary to improve our products.
There’s an even more honest term for that: crony capitalism. Which is just socialism for the wealthy.
But, having got a taste for levying taxes without calling them taxes, governments’ addiction to other people’s money only got worse.
By 1980 there were 26. All of them were specifically for the farm sector.
Today, there are 248 of them.
Many of those are still for the farm sector.
Yet more crony capitalism. No wonder Groucho Marx wrote that, For years the American public has been getting it in the neck from the farmer and, in return, all we have received is a large bill for farm relief and rigid price supports.
Still, I wonder how many Australians are aware that they’re paying taxes for goats? Not that they amount to much.
There are five covering the goat sector alone, including one on wild goat carcasses that the commission found raised just $25.62 in revenue in 2022.
Others, though, are really gouging the taxpayer.
The other 243 levies raised about $11.7 billion last financial year, collected by about 70 separate agencies. The agricultural levies account for just $600 million of that.
The largest, and a quite recent, levy, was put on the nation’s banks by Scott Morrison when he was treasurer. This year it will reap about $1.6 billion from the nation’s five largest financial institutions.
But, you name it, the government is taxing, oops, “levying” it.
Other federal levies are imposed on bricks (for industry training), foreign investors (which goes into general revenue), life insurers (for regulatory supervision) and on planes landing at Sydney airport (for noise-reduction programs).
But Canberra is not alone when it comes to levies. The numerous state levies include those put in place to cover the cost of container recycling systems, waste disposal programs and anti-gambling initiatives.
There are other levies aimed at the development sector, traffic congestion, car parking and the taxi sector.
And if you try to sit, they’ll tax your seat, as the Beatles sang.
Governments, as evident by the near 10-fold increase in levies since 1980, love these imposts […]
But as the Productivity Commission report notes, there’s a Taylor Swift-back catalogue level of unrequited levies that now just go into government coffers, of which the bank levy is the largest.
So, lazy governments now slap the term “levy” on something that is obviously a tax.
But, besides the basic dishonesty, “levies” are worse even than honest-to-goodness taxes, because they cost so much to collect and administer. Just to collect, that is: not the cost on those being taxed… sorry, “levied”.
The commission found it cost $8 to collect each $100 for a levy on buffaloes. The next most expensive is the deer slaughter levy at a touch over $6.50 per $100 of revenue.
By contrast, it costs the Australian Taxation Office just 57 cents for every $100 […]
Of the 130 federal agricultural levies, almost a quarter of them raise less than $6500 a year.
The Age
So, we could slash government levies by a quarter and the government wouldn’t be much more than $200k out of pocket. That’s not even the parliamentary drinks budget for a week.
No wonder the Productivity Commission is advocating freeing Australians from the millstone of so many “levies”.
But just try to prise a cent of someone else’s money out of a politician’s cold, dead hands.
