Dear reader,
let me introduce you to a brave little battler. No, not a small business owner. Not a tradie. Not even a retiree trying to make a few honest dollars last the distance. I’m talking about something far more fragile.
One Australian dollar.
This dollar begins its life with hope. It dreams of freedom. It imagines a quiet existence tucked away somewhere sensible, maybe earning a modest return and contributing quietly to its owner’s future. It has no idea what is coming.
Because it has been born into the Australian tax system, and that system does not believe in second chances. Or first chances. Or indeed in the concept of mercy at all.
Stage One: Income Tax, the Welcome Slap
Our dollar is first earned. It arrives attached to wages, business income, a consulting fee or perhaps the fruit of decades of experience. Before you even get a chance to say “thank you very much”, the federal government reaches out with all the warmth of a pickpocket and says, “Lovely dollar you’ve got there. We’ll just take a slice.”
Income tax. The foundational tax. The gateway drug.
You worked for it. You risked for it. You showed up early, stayed late and didn’t complain much. None of that matters. The dollar is immediately lighter. It has been officially welcomed to Australia.
Stage Two: Saving Is Suspicious Behaviour
Now suppose, in a reckless display of personal responsibility, you put what remains of that dollar into the bank.
Big mistake.
Because now the dollar dares to earn interest. A dangerous activity. A clearly anti social act. The government sees this and thinks, “Hang on. This dollar has already been taxed, but it appears to be growing ideas.”
So the interest is taxed.
Not the original dollar mind you, that has already been mauled, but the earnings on it. This is sold to us as fair and reasonable. After all, money earning money is obviously immoral unless the government is doing it.
At this point the dollar is confused. It thought saving was encouraged. It vaguely remembers speeches about thrift, responsibility and planning for the future. Silly dollar. That advice was for brochures, not reality.
Stage Three: Property, the National Religion
Now let’s say you decide to invest. Australia loves property. Politicians tell us constantly that it is the great Australian dream. You buy a modest investment property, nothing flash, no gold taps or imported Italian marble.
And here comes the state government, dancing in with a grin.
Stamp duty.
A tax on the privilege of already taxed money being used to buy something you already paid tax to earn. You hand over tens of thousands of dollars for the honour of transferring ownership, which involves a computer system and about three mouse clicks.
Then come the other fees. Registration. Titles office charges. Searches. Forms. Certificates. Processing fees. Possibly a fee for the fee that explains the fee.
Every one of them is small enough not to riot over but large enough to notice. Like mosquitoes, not lions. Death by paperwork.
Stage Four: Rental Income, Because How Dare You
Your property now earns income. Congratulations. You are now officially wealthy according to government logic.
That rental income is taxed. Of course it is. You’ve already paid tax on the money that bought the property but that is irrelevant. This is new money now, at least in the eyes of Treasury.
Maintenance costs are grudgingly acknowledged. Depreciation is allowed but treated like a favour. Interest deductions are tolerated but constantly threatened. Every election cycle brings a fresh warning that something you planned around for decades may be “reformed”.
The dollar begins to develop anxiety.
Stage Five: Capital Gains Tax, the Exit Toll
Eventually you sell the property. Maybe you are retiring. Maybe you are simplifying. Maybe you just want your money back.
And now the federal government is waiting at the exit gate like a bored nightclub bouncer.
Capital Gains Tax.
You took a risk. You carried costs. You navigated regulations. You paid stamp duty on the way in and tax every year on the income. None of that matters. The government wants a cut of the gain, even though inflation did half the heavy lifting.
They will graciously offer you a discount if you held the asset long enough. This is presented as generosity. Like only taking two kidneys instead of three.
The dollar staggers out, bruised, thinner and wondering what it did to deserve this.
Stage Six: Back to the Bank, Back to Square One
You put what remains back into the bank. Sensible. Conservative. Australian.
And the interest is taxed again.
Of course it is.
The dollar laughs now. It has gone mad. It has been taxed earning, saving, investing, holding and exiting. It has been stamped, charged, registered, processed, assessed and reviewed. It has funded infrastructure it will never use and programs it was never asked about.
At no point was it asked how it felt about this journey.
The Illusion of “Fairness”
The defence of this system is always the same. “Everyone pays their fair share.”
But what is fair about taxing the same dollar over and over as it changes hats?
What is fair about punishing saving while pretending to encourage it?
What is fair about calling someone “rich” because they worked longer, planned better or took responsibility rather than spending everything immediately?
The system isn’t designed for fairness. It’s designed for flow. Money must keep moving upward, outward and sideways until it finds its final resting place inside consolidated revenue.
Bracket Creep, the Silent Pickpocket
And let’s not forget bracket creep, that quiet little thief that sneaks in while politicians smile and talk about “no new taxes”.
Your income rises a little, maybe just enough to keep up with inflation. Suddenly you’re in a higher bracket. You didn’t get richer. You just got noticed.
Bracket creep is the tax that dares not speak its name. It doesn’t require legislation. It doesn’t require debate. It just happens, like rust.
Compliance, the Hidden Tax
Then there is the cost of understanding all this.
Accountants. Software. Record keeping. Time. Stress.
Every form you fill out incorrectly is your fault. Every rule you didn’t know existed is still enforceable. The government writes the rules, interprets the rules and penalises you for misunderstanding the rules.
Somehow this is considered normal.
Why It Matters
This is not about greed. It is not about avoiding contribution. Australians understand paying for roads, hospitals and defence.
This is about a system that treats effort as suspicious and success as something to be clipped back to size. It is about a culture that confuses equality with sameness and fairness with punishment.
The result is a nation of quiet resentment. People don’t rebel. They don’t protest. They just stop trying quite as hard.
And that, dear reader, is the real cost.
The Final Insult
After all this, after taxing the dollar at every stage of its life, politicians will still stand at a podium and tell you there is a “revenue problem”.
There is no revenue problem. There is a spending addiction.
If the government ran a household budget the way it runs the country, the bank would have changed the locks years ago.
Conclusion: A Modest Proposal
Imagine a simpler system. Tax income once. Encourage saving. Reward investment. Reduce complexity. Treat citizens like adults.
It will never happen of course. That would require restraint and restraint is not a recognised government skill.
Until then, spare a thought for the humble Australian dollar. It never stood a chance.
Disclaimer:
This piece reflects the author’s personal views and opinions and is intended for commentary and discussion only. It does not constitute financial, tax or legal advice. Readers should seek independent professional advice relevant to their own circumstances.
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