How does tax work and does the government have a effect on it?
Thanks for your question.
Tax is money charged by a government on items such as wages or goods and services, to provide money for government services. Taxes are paid by people and businesses in Australia and include:
- The Goods and Services Tax (GST)
- Other taxes, such as company tax
- Custom charges (taxes on goods entering or leaving the country)
The Australian Government uses this tax money to pay for running the country, such as Australia’s defence force, national parks, pension payments and interstate railways.
Each year the Australian Government details how it plans to collect taxes and spend tax money in a set of documents called the Budget. The Budget details:
- how the government intends to raise money.
- how much money is expected to be raised.
- how the government intends to spend this money.
The Budget documents are prepared by the Treasury Department and presented to the Australian Parliament by the Treasurer. They begin the process early each year. The Treasurer works with other ministers to develop spending policies for each government department.
Federal Budget process.
Parliamentary Education Office (peo.gov.au)
This diagram illustrates the development and operation of the Budget. Budget documents are prepared by the Treasurer and introduced through a speech to the House of Representatives. Members of parliament examine the Budget bills. The Senate examines the use of the Budget throughout the year in Senate estimates committees.
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