The four main Nordic nations – Sweden, Finland, Denmark and Norway – are among the world’s most highly ranked countries in terms of the factors that determine prosperity and particularly in terms of innovation: consistently ranking well above Australia.1 They are also among the most equal in terms of income distribution – much more equal than Australia.2 These countries therefore provide an opportunity to study how policy settings might be adjusted in Australia to bring about a more prosperous, innovative and equal society here.
The Nordic countries are tangible examples of how economies flourish best in less economically divided societies. Nobel Prize-winning economist Joseph Stiglitz has shown that, “over the period 2000 to 2010, high-taxing Sweden…grew far faster than the United States. The country’s average growth rates…exceeded those of the United States…2.31% a year versus 1.85%”.3 When those calculations are updated to look at
the trend from 2010 to 2016, Sweden’s superior average annual economic growth rate continued – 2.86% compared to America’s 2.14%.
Tax is a part of the Nordic countries’ economic success and a point of difference with Australia. The Swedish word for tax – skatt – has another meaning: ‘treasure’. This makes the Swedish language unusual in having such positive connotations associated with the word for community members’ payment of contributions for the general good.5 Values such as security, fairness, trust and a sense of belonging underpin – and are in turn reinforced by – the taxation arrangements in all four main Nordic nations.
While changing the Australian word for tax is unlikely, improving the fairness and transparency of the tax system could begin to strengthen similar values here.
SOURCE: Andrew Scott. “Skatt: Treasure and tax in Australia and the Nordic countries.” Australia Institute, March 2019.
Produced by the librarians at the Brotherhood of St Laurence in Melbourne, Australia