Australians Taxed at Record Levels

Australians Taxed at Record Levels

Australians are feeling the squeeze. 

New data from the Australian Bureau of Statistics (ABS) shows that the average Australian paid $30,633 in tax in 2024–25, marking one of the highest tax burdens on record.

At the same time, government spending continues to climb increasing 7.4%, while revenue has only grown 4.5%.

Why Are Taxes Rising?

A big part of the increase comes down to growing government spending, particularly in areas like:

  • Aged care
  • Disability services (NDIS)
  • Healthcare and social support

In fact, disability-related spending alone (including the NDIS) has surged 9.4% to $87.3 billion, a record high. While these services are essential, they are putting increasing pressure on the tax system and ultimately, on Australian taxpayers.

What This Means for You

Whether you're an employee, investor, or business owner, rising tax levels mean one thing: You need to be more proactive than ever with your tax strategy. Many Australians assume their tax is “just taken care of” through PAYG or basic returns, but that’s often where money is left on the table.

Where Australians Are Overpaying Tax

Here are some of the most common areas where we see clients paying more tax than they should:

1. Missed Deductions

Simple things like:

  • Work-related expenses
  • Vehicle and travel costs
  • Home office claims

These deductions are often underclaimed or missed entirely

2. Investment Property Mistakes

Property investors frequently:

  • Miss depreciation schedules
  • Incorrectly claim expenses
  • Don’t structure ownership tax-effectively

3. Poor Business Structuring

Small business owners may:

  • Stay as sole traders when a company or trust is more tax effective
  • Miss opportunities for income splitting
  • Fail to plan for tax in advance

4. Superannuation Not Being Used Strategically

Super isn’t just for retirement; it’s also a powerful tax tool.

Tax saving opportunities include:

  • Concessional contributions to reduce taxable income
  • Timing strategies to minimise tax in high-income years

Tax-Saving Questions & Answers

Q: Why are Australians paying more tax now?

A: Increased government spending on services like aged care and disability support is pushing up the overall tax burden.

Q: How can I legally reduce my tax in Australia?

A: By maximising deductions, structuring income correctly, and using strategies like super contributions and investment planning.

Q: Do I need a tax strategy if I’m just an employee?

A: Yes! Even employees can significantly reduce tax through deductions, salary packaging, and smart financial planning.

The Hidden Risk of Doing Nothing

With tax levels rising, doing nothing can be a costly decision for you. Even small, missed opportunities each year can add up to:

  • Thousands in lost deductions
  • Higher tax bills than necessary
  • Missed long-term wealth opportunities

Here’s the good news: The right advice can help you:

  • Keep more of what you earn
  • Structure your finances smarter
  • Plan ahead instead of reacting at tax time

Whether you're:

  • A business owner
  • Property investor
  • Employee with growing income

There are almost always opportunities to improve your tax position.

Don’t Pay More Tax Than You Should

Make sure you’re not paying more tax than you should and that you’re making the most of every deduction available, whether business or personal.

At Cashflow Financial, we help clients across the Sutherland Shire, Wollongong and Sydney identify opportunities to reduce tax and build long-term wealth. Contact Cashflow Financial today to review your tax position and put a smarter strategy in place.