The ATO have included a new feature in personal tax returns this year by providing a statement with colourful chart outlining where an individual’s tax is going proportionately into the government’s debt. If you paid $10,000 tax, you can see that $1700 went towards Heath, $800 towards Defence and $3700 of that went to Welfare for example.

I feel that it is a sound move for the government to do this as tax is ‘taken’ from us, so we might as well know where it is going. Seeing the breakdown of Health (Aged, Families, Disability, Unemployed), surely only the most heartless miser would feel these groups don’t deserve some assistance through tax, and the other categories communicate where Government is spending lower amounts from an individual’s tax. Interestingly, Interest on Government debt, Fuel and Energy, Foreign Affairs and Economic Aid, Industry Assistance, Immigration – all political hot topics are happily listed by the government. One could see this emerging as a potential ignition point for individuals feeling unhappy about where ‘their’ money is being spent. Seeing figures in the newspaper is very different to seeing your tax being spent. I wonder if allowing citizens to nominate where their ‘individual’ tax goes (even if this was only an illusion) would make people feel better about paying tax. It’s a nice part of giving at Grill’d.

I wonder if this strategy would work well for voluntary spending? Seeing the breakdown of admin costs and seeing the final amount of funds that reaches the targets of charity has been investigated in the media before and can actually reduce giving. I still think the power of consumption helps charitable giving. Feeling like you are buying a cow or chicken or well for a poor village, even if your money doesn’t literally purchase these items can be satisfying and lead to more giving than writing an arbitrary amount on a cheque or credit card form. We’ll see what the average citizen thinks of where their money goes though.