Wondering who’s going to be doing the heavy lifting in the effort to get the budget deficit down?
You, that’s who.
Most of improvement in the budget deficit over the five years covered by the forecasts in the budget papers is coming from increased revenue.
And most of the increase in revenue will come from individuals, through higher income, fringe benefits and superannuation taxes, and the GST.
The budget brought down by Joe Hockey on Tuesday predicted the budget deficit would fall from $48.4 billion in 2013/14, the latest completed year, to $6.9 billion five years later in 2018/19.
As a percentage of gross domestic product, a more meaningful measure, the narrowing of the deficit is more impressive, from 3.1 per cent to just 0.4 per cent of GDP.
Spending will do some of the work, falling from 25.7 per cent of GDP to 25.3 per cent, a reduction of 0.4 percentage points.
But revenue will grow from 22.8 per cent of GDP to 25.2 per cent, a rise of 2.4 percentage points.
In other words, increased receipts will do six times as much heavy lifting as reduced spending.
And within the increased receipts – something that can be teased out of the budget papers with a bit of number-crunching – it’s households doing the heavy lifting.
The budget figures imply income tax paid by individuals will rise from 10.3 per cent of GDP in 2013/14 to 12.1 per cent in 2018/19.
Add in taxes on superannuation, the GST and fringe benefits tax (effectively paid by individuals), and the proportion of tax paid by households rises from 14.0 to 16.3 per cent of GDP over the five years.
In contrast, company taxes rise only slightly, from 4.3 to 4.5 per cent of GDP.
Add in other taxes paid by companies – petroleum and minerals resource rent taxes, and the now-defunct carbon tax – and the proportion actually falls over the five years, from 4.6 per cent of GDP in 2013/14 to 4.5 per cent in 2018/19.
Give yourself a pat on the back.
You deserve it.