Introduction

As an area of inquiry, public opinion on taxation and social service provision has several levels of interest and application. There is an obvious democratic interestare the public getting what they want? There is an associated electoral componentwill serving these preferences deliver votes? There is a behavioural issuewhat does the survey evidence tell us of citizens personal and societal priorities? In addition, there is a public policy application given the demographic challenges facing Western societies.

Opinion poll surveys often test the trade-off between less tax or more spending on social services. One reason is that social services are the largest item of government expenditure in Australia. Estimated actual outlays for 2003-04 show that social security, family benefits and aged care collectively account for 55 per cent of expenditure on major items of public provision (Figure 1). Health accounts for a further 22 per cent. Moreover, a large proportion of the population is dependent on these benefits which are funded mainly through direct taxation.

Figure 1: Estimated actual expenditure for 200304

Source: Budget Paper No. 1, 200405

Australia is a low tax country relative to other nations although 200203 tax revenues as a percentage of GDP (31.5 per cent) is at an historical high. Surveys on the tax-social service nexus therefore test a key area of government activity and public involvement.

Poll findings

Australian opinion polls of the past 20 years on tax and spending issues display many of the characteristics identified in international studies. In terms of taxation, polls show the same reticence for higher tax as those in other rich democracies. The polls on tax indicate a keenly self-interested electorate believing lower tax to be of greater immediate personal benefit than any item of expenditure.

In terms of the trade-off between less tax and more spending on social services, more people have preferred less tax to higher social service outlays in all polls since the mid 1980s. In terms of more spending on social services, there are popular items such as health services, old age pensions and family benefits, and unpopular items such as unemployment benefits, single parent payments and assistance to minority groups.

Consistent with several international findings, most Australian opinion polls show public acceptance for higher taxes to pay for the popular broad-based items of health services and old age pensions. Health polls are unambiguous in the preference for higher spending and better services, reflecting healths character as a public good of enduring national, personal and electoral concern. While Medicare is a popular program there is clearly a base of public support for public money to be spent on improving the affordability of private options.

Most Australians, like citizens elsewhere, have an aversion to higher tax and a general preference for major in-kind services. That said, on the taxspend nexus, the polling data reveals significant changes in opinion. During the mid-to-late 1980s, the public strongly preferred less tax over more spending on social services. Health and taxation issues ranked fairly similarly as issues of national and electoral importance.

Over the 1990s and early 2000s, polls on the taxspend trade-off have recorded progressively higher support for more social services and correspondingly lower support for less tax (Figure 2).

Figure 2: Less tax or more spending

Source: Australian Election Studies 19872001

A likely contributor to the trend is the importance of health as an issue of public concern. Health has been of higher electoral importance than taxation in the four federal elections since 1993 and since the early 1990s has progressively replaced unemployment as the national issue of greatest public concern. The same surveys found that taxation has, in relative terms, been an issue of declining electoral concern, particularly since the late 1990s (Figure 3).

Figure 3: How do you rate these issues?

Source: Newspoll, 19902004