Victorians are paying the most taxes to their state and local governments in Australia, new data from the Australian Bureau of Statistics has found.
The average Victorian paid $5,638 in state and local taxes in the 2021/22 financial year – a 25% increase from the previous year.
Here’s the bigger picture.
How does Australia’s tax system work?
Most taxes in Australia are raised by the Federal Government (81%) but states and territories raise some of their own, including on property, business payrolls, gambling and vehicle registration. Local councils collect rates.
State and territory taxes account for just over half of their total revenue – the rest comes from the Federal Government, which gives them all money raised by the Goods and Services Tax (GST) plus a variety of grants for specific purposes such as hospitals or schools.
Does high incomes equal high taxes?
One explanation for the differences in tax collection between jurisdictions, and why Victorians pay the most tax in Australia, is the income of their residents. In general, the wealthiest jurisdictions pay the most tax.
The lowest-taxed state, Tasmania, is also the lowest-income state.