Mrs MoneyPlant and I submitted our taxes for the 20-21 Financial Year using myTax (A Free ATO tax lodgment process) and this morning we received our ‘Income Tax Receipts’ (The Income Tax Receipt details the Australian Government debt levels and where our personal income tax was spent)
Turns out we spent a total of $40,899 in taxes for the 2020-2021 Financial Year. One thing I really appreciate about the Australia Government when it comes to Tax, is the transparency on where our tax money was spent (While I don’t completely agree 100% with how they use our money, at least I know where it went!)
The top 7 categories are as below:
- 38% – Welfare
- 16% – Health
- 7% – Education
- 7% – Defence
- 5% – General Public Services
- 3% – Interest on Debt
- 2% – Transport and Communication
Fortunately, and unfortunately, it also lists the level of Australian Government Gross debt, which is… insane. Last year it was $684 Billion, and this year, $829 Billion. If we remove a few zeros.. that’s like having a debt of $68,400, and then the next year having a debt of $82,900. The cash rate is super low at the moment, but the key to building wealth is to spend less then you earn, right? Do you think this should also apply to Governments?
On a personal note, while the welfare system is generally regarded as being terrible and tonnes of people take advantage of it, I am at least proud to be in a country where healthcare is free and we do (generally) have a large safety net for those who need it most ?
Do you know why you pay tax and where it goes?
Since having this breakdown I can appreciate the tax distribution just a little more. Also don’t forget, paying tax means your making money, so the more tax you pay, the more you’re earning! ?