14 November 2024

Age and gender

The tax mix can also be examined through the split between different genders and age cohorts. The last 4 decades have seen a significant shift in the share of personal income tax paid by each age cohort (Figure 4-1). Since 1980, the share of personal income tax paid by people aged under 30 has fallen from around 26% to less than 10%. The share of personal income tax paid by the 30- to 39-year-olds remained relatively stable throughout the 1980s and 1990s but declined from 2000 onwards. These trends reflect both the smaller share of the population in these cohorts and that a larger proportion chose to continue to study in post school education[54] reducing their availability for work.

Figure 4-1 Share of personal income tax, 10-year age groups

Share of personal income tax, 10-year age groups

Source: Source: ATO Taxation statistics and PBO analysis.

For all the other age groups, there has been an overall increase in the share of personal income tax paid since 1980. The rise in the share of tax burden reflects an increase in workforce participation over the last four decades, largely driven by women. Older cohorts have remained in the labour force for longer.[55]

These trends occurred as those born during and immediately after the Second World War have progressed through the workforce during major social changes, particularly the increase in women’s participation in the 1960s and 1970s. For instance, until 1966 women’s employment by the Commonwealth ceased when they got married. With the average age that year for women at their first marriage at 21, these women appear in Figure 4-2 when in their 40s during the 1980s and their 50s during the 1990s.

More recent trends in tax paid by gender and age cohorts are shown in Figure 4.2. The males in the 3 younger cohorts (29 and under, 30s and 40s) and the females in the 29 and under cohort have decreased in their share of personal income tax from 2001-02 to 2021-22.[56]

By contrast, older males and females 50 plus have increased their share. In the case of the 60 to 69 cohorts, they have doubled their share. For the 2 oldest cohorts, their share of tax falls around 2008.

Since 2017, the pension age has increased from 65 to 67 years, while the superannuation ‘preservation age’ (the minimum age you can generally access your super) has also increased, from 55 to 60. These changes have contributed to older men and women remaining in the workforce (and paying income tax) for longer.