Yep, Costello taxed more than Chalmers...but borrowed much less
How much tax Australia collects relative to the size of the economy has changed substantially over the past six decades. A debate is raging as to which Australian Treasurer taxed the most.
Using the ABS Modellers’ Database, Benchmark Analytics has calculated a quarterly tax-to-GDP measure by combining indirect taxes, household income tax payable and resident-corporation income tax, and dividing the total by nominal GDP.
The series begins in the September quarter of 1959. That means the Chifley and Fadden periods cannot be assessed from this dataset.
The longer-run trend is striking. During Harold Holt’s period as Treasurer, the quarterly tax measure averaged 18.56 per cent of GDP. It averaged 20.00 per cent under William McMahon, 21.45 per cent under Billy Snedden and 23.10 per cent during Frank Crean’s term.
By John Howard’s period as Treasurer, from 1977 to 1983, the average had reached 25.75 per cent. During Paul Keating’s lengthy term it averaged 27.88 per cent.
Peter Costello’s 1996–2007 period recorded an average of 29.47 per cent. The measure subsequently averaged 26.27 per cent during Wayne Swan’s tenure, which included the global financial crisis, before rising through 27.27 per cent under Joe Hockey, 28.24 per cent under Scott Morrison and 28.62 per cent under Josh Frydenberg.
For Jim Chalmers, the average through the June quarter of 2026 is 29.11 per cent.
These figures should not be interpreted simply as the tax policies chosen by individual Treasurers. The ratio is also influenced by the economic cycle, company profits, wages, bracket creep and the composition of economic activity. The indirect-tax component also includes taxes outside direct Commonwealth control.
The calculation nevertheless provides a consistent way of comparing the tax share of the Australian economy across different Treasury periods using the same quarterly national-accounts dataset.
It should also be noted that the numbers do not reflect government borrowing. Government borrowing under Chalmers has been substantially higher than under Peter Costello. Borrowing has to - one day - be repaid by taxing people more.
| Rank | Treasurer | Term | Avg % GDP |
|---|---|---|---|
| 1 | Peter Costello | 1996–2007 | 29.47% |
| 2 | Jim Chalmers | 2022–2026* | 29.11% |
| 3 | Josh Frydenberg | 2018–22 | 28.62% |
| 4 | Scott Morrison | 2015–18 | 28.24% |
| 5 | Paul Keating | 1983–91 | 27.88% |
| 6 | Ralph Willis | 1993–96 | 27.72% |
| 7 | Joe Hockey | 2013–15 | 27.27% |
| 8 | Chris Bowen | 2013 | 26.73% |
| 9 | John Kerin | 1991 | 26.62% |
| 10 | John Dawkins | 1991–93 | 26.58% |
| 11 | Wayne Swan | 2007–13 | 26.27% |
| 12 | John Howard | 1977–83 | 25.75% |
| 13 | Phillip Lynch | 1975–77 | 25.58% |
| 14 | Bill Hayden | 1975 | 23.70% |
| 15 | Dr Jim Cairns | 1974–75 | 23.69% |
| 16 | Frank Crean | 1972–74 | 23.10% |
| 17 | Billy Snedden | 1971–72 | 21.45% |
| 18 | Leslie Bury | 1969–71 | 20.86% |
| 19 | William McMahon | 1966–69 | 20.00% |
| 20 | Harold Holt | 1958–66 | 18.56% |