Tax cuts on the nose: Millennials

As the tax cuts were passed in Parliament, new CIS research suggests that they may not have the backing of one of Australia’s largest group of voters. Indeed, in new polling we have commissioned from You Gov Galaxy, it appears that Millennials – now one third of the electorate – might not believe that income tax cuts are the best idea.

While also revealing that 58% of Millennials have a favourable view of socialism, the polls showed that 59% of the generation backed more government intervention in the economy. Another 56% were of the opinion that, allowing for inflation, Australia spends less on health and education than 10 years ago – a view that is indisputably incorrect.

These findings form part a greater narrative that has emerged over the last 20 years, as issues like house prices and low wage growth drive young voters towards the belief that more government is the answer.

Since the late 1990s, when Millennials first became politically active, Australian voters’ support for increased government spending has surged.

In 1996 only 18% of the overall electorate believed the government should be spending more on social services. By 2016, the first election where all Millennials were of voting age, 55% of voters favoured an increase in spending. The correlation between the rising number of Millennial voters and the growing support for big government is uncanny.

Conversely, the percentage of voters favouring less tax has plummeted. From an all-time high of 66% in the late 1980s, the numbers backing a cut in tax fell to just 36% at the 2016 Federal election. This trend was re-enforced in May, when only 37% of voters in an Ipsos poll backed Treasurer Scott Morrison’s proposed cuts. Nearly 60% thought the government should be using revenue to pay off debt.

The existence of this sentiment amongst such a large percentage of voters could leave a murky future ahead for future tax reform. Big government and a reduction in income tax are simply incompatible. With a significant number of voters leaning towards the former, it is not a surprise that the government has found it difficult to build support for the latter.