The y (vertical) axis starts at 24% and not 0%, and ends at 32%. This is a common representation for data like this where 1% shifts add or subtract billions of dollars. A scale from 0-100% hides these insights.
The ‘tax’ issue can mean different things to different people, however, most of us would agree that we’d like to pay less tax or have our taxpayer money spent and invested better. As such, we’ve looked at total taxation for the economy.
Remember that each Labour-led or National-led government has had coalition partners that share the successes, and the failures, with them. A full list of governments for this time range is at the bottom of this page.
Core Crown Tax Revenue as a % of GDP for June financial years (July-June) under the PBE standard which started in 2005. This ensures consistency in comparisons.
Bi-annual EFUs, except for an additional one in election year
BEFU = May
HYEFU = December
PREFU = ~September in election years
Annual audited financial statements = October
Annual audited financial statements = 5 October 2023
HYEFU = Dec 2023
Why this KPI?
IPSOS lists this issue as ‘Taxation’ and Curia as ‘Taxes’, but Essential measures the phrase ‘Ensuring a fair tax system’. As such, these words could mean different things, e.g.
How much we pay in tax individually
How much we pay in tax collectively
How well that taxpayer money is invested/spent by the government
Whether the tax system is fair
Even within that last point, there are varying opinions on what ‘fair’ means, e.g.
Some people believe it’s unfair that others can make capital gains on houses and not pay income tax on those earnings.
Some people believe that paying up to 39% income tax on income over $180,000, and then 15% GST on what’s left (and other taxes too like fuel, vehicles, and alcohol) is unfairly high.
Some believe that almost half of New Zealanders paying no ‘net income tax’ (income tax after benefits and tax credits) while the top 9% of earners over $100k pay half, is not fair.
And then there’s the debate about %s versus $s, and realised versus unrealised earnings.
Because fairness is a highly subjective and contested measure, we can’t use that as the KPI here.
And, unfortunately, it’s currently very hard to empirically measure financially how well taxpayer money is invested/spent by the government, let alone capturing the non-financial benefits too, e.g. health, happiness, and safety.
As such, that leaves us to measure how much we pay in tax as a society.
The total tax taken by the government is referred to as Core Crown Tax Revenue. In other words, how much an economy is taxed.
But this goes up as the population grows, and also as the economy does well, so we need to make an adjustment to measure Core Crown Tax Revenue as a % of GDP.