Friday, 27 February 2009

It's a rich woman's world

I’ve just done something quite scary. I’ve worked out the percentage of my salary I pay in tax here, compared to the UK.

When you add together PAYE, National Insurance and council tax, I paid about 32% of my total monthly salary in tax in the UK. Here I pay about 17%. Yes, that’s right, just over HALF of what I pay in the UK.

Wowee. Now, to put that in a bit of context:

• I get a sizeable tax break because I work for a charity – the logic being that because people get compensated through the tax system charities can pay lower salaries. (Although I actually earn a bit more than I’d get in the UK in a similar role).

• There’s no NHS here and although basic treatment is covered through Medicaid, most people have private health insurance. I don’t because I’m young, fit and healthy and I figure if something bad happens to me I’ll go home and use the NHS!! But if I lived here permanently I’d probably feel the need to get insurance. That might bump my 17% up to about 22%.

• It’s much more common for people to send their kids to fee-paying schools here – about 30% compared to the UK’s 7% (2/3 of this is enrolments at fee-paying Catholic schools). Wouldn’t be my choice but it helps to explain some of the difference.

• There’s no council tax here although homeowners do have to pay rates as well as a ‘strata’ fee (which covers building management & repairs). As renters, we don’t have to pay anything but again, if were here permanently that would add to our tax bill.

So as a confirmed leftie, how do I feel about this? Well, to be honest, I really don’t mind paying high tax in return for social policies that do something about poverty, inequality and social injustice and I hate the concept of private health and education. I do, of course, think there’s massive room for improvement in how social policies work in the UK and I hate the level of waste that goes on in local government particularly – but it is kind of nice to have the policies in the first place, underpinned by a general sense that most people kind of broadly think that there should be some give and take in society – all of which is sadly lacking here. But it does help to explain why so many expats with values quite different to mine are out here!

Perhaps it helps to explain why there is so much political apathy here. It’s probably just as well Aussies are forced to vote because I dread to think what turnout at elections would be otherwise. At least when the government is taking a third of your hard-earned cash, you feel slightly motivated to hold them to account at the ballot box and engage in some debate about policy.

Of course, it’s nice to have some extra cushioning from the big wads of cash I’m saving while I sit on the moral high ground!!!

1 comment:

CBQ said...

17% - now that's what I call fairer than the UK - but (CBQ adopts ironic tone) I don't understand how Australia functions without an NHS and huge state education system?

How much do you think taxes would fall here and the economy would be enhanced if we didn't have the NHS but instead medicaid plus health insurance?

And private education for all would mean I wouldn't have to pay for other people's kids to be schooled...

And removal of Child Benefit and Family Tax Credit might make people realise it's actually quite expensive to have a child when you're paying for it on your own and really having to take full responsibility.

But then, I'm a convinced rightie I suppose...