Australians need to work 107 days to cover all of their tax bills, with the federal government taking a bigger slice of national income than ever before.
This pushes ‘Tax Freedom Day’ to April 18, with almost a third of the year gone before workers earn a cent for themselves after meeting their tax obligations.
Tax Freedom Day measures how much of the year is required to meet the national tax bill. The later it falls, the greater the tax pressure on households and businesses.
When Labor took office in 2022, Tax Freedom Day landed on April 15, after just over 104 days of work.
Now, three years later, Australians are working an extra three days each year purely to pay tax.
The tax take has surged in recent years. In 2022, governments collected about $711billion, 28.5 per cent of GDP.
By 2025, the figure jumped to around $839 billion, or 29.4 per cent of the economy.
The peak under Labor came in 2023, when tax revenue reached nearly 29.6 per cent of GDP, equivalent to almost 108 days of work to cover the national tax bill.
Australia recorded an increase of over $120 billion in tax revenue between 2022 and 2025
Every one percentage point increase in tax is worth about $30 billion a year, taken from families and businesses.
Treasurer Jim Chalmers, who is in the United States for fuel security talks, insisted the upcoming May budget would be ‘responsible’ as global risks mount.
He said the government would balance the economic fallout from the war in the Middle East with what he called ‘Australia’s intergenerational obligation’ to drive productivity and make the economy more sustainable.
‘Our economy is expected to slow in our own forecasts, and inflation is expected to be higher as a consequence of the war in the Middle East,’ Chalmers said.
He added that Australians are ‘paying the price for a conflict they did not choose’.
‘They are feeling it at the bowser and beyond, and they are our focus as we finalise preparations for this budget,’ Chalmers said, adding the government was working with global partners to safeguard fuel supplies for households and industry.
This comes despite rising tax receipts, even after recent household tax cuts.
More tax relief is promised, building on changes introduced last July.
Jane Hume (pictured) said the government was reliant on bracket creep to boost tax revenue
From July 1, taxpayers will receive an additional personal income tax cut of up to $268 a year, rising to as much as $536 from July 2027, compared to 2024–25 rates.
The government’s legislated plan also cuts the tax rate on income between $18,201 and $45,000 from 16 per cent to 15 per cent in 2026–27 and 14 per cent in 2027–28.
But critics argue the reforms don’t go far enough and leave bracket creep virtually untouched, helping push tax revenue even higher.
Anyone earning above $45,001 a year will see no change to their tax rates from 2026 onwards.
Deputy Liberal Leader Jane Hume said the government is too reliant on bracket creep.
‘The great irony with inflation is that while it hurts everyday Australians and it hurts businesses, governments… do pretty well out of it,’ Hume told Sky News.
‘What it allows for is bracket creep, and this government is relying solely on bracket creep to solve all its woes.
‘The only source of increased revenue to the budget is simply relying on people moving into higher and higher tax brackets, paying more tax, and fuelling Labor’s obsession with government spending.’
