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How should Australia's GST compare with OECD average?

Comments on ABC Fact Check "Do Australians pay less GST than people in other OECD nations?" 30/07/2015

The comparison of GST with other OECD countries' GST or VAT, in this fact check, while apparently correct, masks the size effect of the different OECD countries and that makes a quite difference in its conclusion.

For example, the four countries which have a lower ratio of GST/VAT revenue to GDP include two of the OECD largest economies, namely the USA and Japan, as well as another G7 countries, that is Canada.

If the different sizes of the OECD economies is taken into account, then a different picture emerges and Australia does not fair too badly as the nominal comparison suggested. Australia could sit much closer to the average GST/VAT GDP ratio weighted by GDP.

So, this is an important point that the fact check should at least mention or better still discuss it.

From the second Chart in ABC Fact Check we can see that the ratio of GST/VAT to GDP is less than 5% for the US, and less than 6% for Japan, while it was stated by the ABC Fact Check that Australia's is 7/5%.

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