Taxing times

This paper looks at the effect that the fall in tax revenue post Global Financial Crisis (GFC) had on the Commonwealth’s budget. It does this by modelling what would have happened if revenue had instead remained at the government’s tax revenue target of 23.9 per cent of GDP. The difference between what actually happened and what the model shows would have happened helps reveal the impact of tax revenue falling below 23.9 per cent of GDP had on the budget.