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This paper makes new projections of government social outlays for Australia. The calculations suggest that government social outlays will increase considerably as a percentage of GDP over the next 50 years; by 7.3 per cent of GDP in the base case. This is a greater increase than that found by previous investigation. Over 60 per cent of this increase will occur between 2011 and 2031, the years when the baby boom generation retires. The major contribution to this increase will have come from increased government outlays on social security. Lower rates of net immigration are shown to yield an even larger increase in the percentage of government social outlays in GDP. The paper also considers the disincentive effect of taxation and the effect of increasing the age of retirement. However, notwithstanding the trends suggested by the projections, the paper argues that there are a number of reasons to be sanguine about the implications of ageing on the share of government outlays in GDP. [ABSTRACT FROM AUTHOR]

This paper examines the potential role for fuel substitution in electricity production in reducing carbon dioxide emissions over a ten-year time horizon. This is achieved by adding fuel substitution to output changes resulting from demand responses arising from a tax on carbon dioxide emissions. A time profile of adjustments is developed. The tax required for Australia to meet a 20 per cent reduction in emissions from 1993 levels is calculated and effects on inequality and social welfare are examined. The paper also examines the potential effect of a subsidy towards the use of low- emission fuels, financed from the carbon tax. A subsidy produces an improvement in emissions abatement and a lower tax required to reach the emissions target. [ABSTRACT FROM AUTHOR]

Australia's taxation arrangements for retirement saving are among the most complicated in the world. It is almost unique in applying tax at all three possible points in the retirement saving cycle: contributions, earnings and benefits. Starting from the proposition that the 'best' pension tax is to tax benefits under the personal income tax, this paper proposes a 'withholding tax,' arrangement which would have impacts on individual contributors equivalent to a benefit tax, while altering the time profile of tax collections to address cash-flow concerns on the part of the revenue authorities. Simulations are presented to show that individual contributors benefit from the proposed reform, and that equity across contributors in different wage bands is broadly maintained. [ABSTRACT FROM AUTHOR]

This paper considers options for addressing problems in the way the tax and social security systems interact. These are, complexity, with associated lack of clarity, loss of client understanding, possibilities of poor take-up, and lack of equity; high effective marginal tax rates (EMTRs) over some income ranges due to tax and means test interactions, with associated "low income traps," "notches," where there is a "sudden death," loss of benefit at some point; means test "stacking," that is, where two or more means-tested benefits are withdrawn over the same range of income; "churning," meaning that some clients both receive benefits and pay tax at the same time; and lack of support for many low wage earners just outside the boundaries of the transfer system, with pressures for yet more targeted payments for low income earners. The important thing is that the average effective tax rate calculated over some sufficiently wide range of income should not be excessive. The other important thing is that the graph of net disposable income should rise fairly smoothly with rising private income, if anomalies in the EMTR schedule cause marked dips and hollows or long plateaux in the disposable income line then they should be regarded as a policy problem.

Over recent decades, Australia's highly progressive, individual-based taxation of families has been replaced by a system that tends towards joint taxation with an inverted U-shaped rate scale. The reform has been implemented by introducing family-income-targeted child payments (now Family Tax Benefit Part A) and by lowering tax rates on higher incomes. The new system has shifted the burden of taxation to two-earner families on low and average wages and, in particular, to working married mothers as second earners. For reasons of fairness and efficiency, we propose returning to more progressive individual taxation and universal family payments. [ABSTRACT FROM AUTHOR]

This article discusses long-term issues in superannuation in Australia. A major policy issue in developed economies is the aging of the population over the next 40 to 50 years. The projected increase in persons aged over 65 years is expected to raise government expenditure on pensions and health care substantially. Australia has adopted a policy of increasing the private provision of retirement income through a system of compulsory contribution by employees to superannuation. The Australian retirement system is based on a male retirement age of 65 years; this is the age at which males are eligible for the age pension. The age of eligibility for females is 62 years but it is scheduled to rise to 65 years. However, economic and social developments over the last two decades have caused the average retirement age for males to drop to 58 years, which means that government rules relating to access to superannuation and receipt of the age pension are not aligned. The Commonwealth Government's policy is to encourage private provision of retirement income through superannuation by providing taxation-advantaged vehicles while retaining the provision of a safety net through the age pension. The age pension is more than a safety net as it has certain characteristics which are highly desired by people.

The Australian Bureau of Statistics provides a breakdown by industry of the revenue collected from each of the major indirect taxes in Australia. This information does not show who bears the ultimate burden of indirect tax as each industry may pass on its initial burden to others. Thus, the burden of the tax may be passed on round by round to indirect business purchases and final demand until the total burden of the tax is passed onto the final consumer. Using a method to derive final indirect tax incidence developed from earlier studies, the final incidence of a selection of indirect taxes in Australia is presented. The major innovation is to include the use of margin industries in the initial flows of the input-output matrix ensuring that taxes on inputs to margin services are fully passed forward onto the good or service that the consumer purchases. it is found that many goods and services that are initially exempt from the main indirect taxes, such as the wholesale sales tax, have significant effective tax rates once taxes on inputs to industry are taken into account [ABSTRACT FROM AUTHOR]

The interaction of the tax and social security systems, and especially the problem of high effective marginal tax rates, has become an important policy issue in Australia, that has led to proposals to reduce them from the major political parties in the 1998 Federal Election campaign. Taken as a whole the tax-transfer system is very complex and many low income families face very high effective marginal tax rates. Negative income tax involves rolling some or, in the extreme case, all social security benefits into the tax system. A radical negative income tax system replacing most or all social security payments with tax credits would be very expensive to introduce, without reducing benefit levels for some or imposing income tax rates that looked unacceptably high.

The states have increased their share of national revenue from about 16 per cent in the late 1980s to over 20 per cent. This shift may not have improved the efficiency of raising national taxation revenue. Eight taxes with total revenue in 1995-96 of $26.5 billion are considered. In order of revenue these are payroll tax, business franchise taxes, stamp duties, gambling taxes, government business enterprise taxes, financial institutions taxes, land tax and mineral taxes. Business franchise taxes fall on a few items of consumption that are already taxed heavily by the Commonwealth. Financial taxes and stamp duties are suspect because they are transactions taxes, not taxing economic activity directly. Two important state taxes-on payrolls and on land-have badly fractured bases. The pressure on the states to raise more revenue is continuing. In meeting their revenue requirements efficiently the short-term solution lies in substantial reforms of existing taxes, including repairing the bases of the payroll and land taxes, and removal or reduction of the least efficient ones. The longer term solution lies in the states having access to broader based taxes, particularly consumption. [ABSTRACT FROM AUTHOR]

The Australian system of Commonwealth and State taxes is in need of comprehensive reform. It fails the criteria of neutrality, horizontal equity and simplicity, it is not as progressive as often thought, and the future revenue base is declining. Many of the problems stem from the absence of comprehensive tax bases as applied to income, expenditure and assets, and related choice options are subjected to very different effective tax burdens. Important choice options facing different effective tax rates include: work and leisure; consumption and saving; different saving and investment options; form of labour remuneration; different ways of production; the mix of goods and services produced and consumed; and, domestic or overseas location. A comprehensive income tax base is required, especially as applied to the taxation of capital income. The options of a nominal income, real income or expenditure base are explored. It is argued that reform of indirect taxes proceed along two lines. The general revenue raising purpose leads to a comprehensive base of final consumption expenditure at a single rate. Then, additional specific taxes for user pays purposes, for example for roads, and for externalities, for example tobacco, set at the supply cost or net externality would be applied. There are conflicting arguments for and against changing the tax mix away from income to expenditure. [ABSTRACT FROM AUTHOR]

Analyzes the effects of changes in the existing tax mix of the distribution of income in Australia. Shifts from direct to indirect taxes; General equilibrium effects of the policy changes laid out in the government's Draft White Paper on tax reform; Sources of inequality in the pre- and post-change distributions.

Abstract: Duckett, Swerissen and Wiltshire ( ) advocated a 40‐cent tax per 100g of sugar in sugar‐sweetened beverages (SSB), because the tax would reduce the cost burden on the non‐obese. Duckett, Swerissen and Wiltshire took these ‘third‐party’ costs as indices of market failure. However, their distributional analysis is not an appropriate framework for the assessment of economic efficiency. Moreover, they did not quantify the causal mechanisms through which a small weight loss would appreciably lower health costs and increase employment of the obese. There may be an economic case for such a tax, but Duckett, Swerissen and Wiltshire have not made it. [ABSTRACT FROM AUTHOR]

The article presents the editors' report for the journal's coverage from 2007 to 2010. They state that the journal focuses on contemporary economic topics relevant to Australia. They add that the journal continued to use the established format of invited and contributed articles, and other sections which covered health system, taxation, and retirement. They present several charts depicting published articles and submissions. The editors acknowledge people who contributed to the journal.

Is the rise in inequality in Australia due to global changes in the distribution of marginal productivity or changes in the allocation of political favours? This article lays out the arguments for both views. Looking at the tax and subsidy changes that favour the rich, and considering that almost all the 200 richest Australians look like the beneficiaries of political favours rather than innovators or superstars, the article concludes that inequality is probably increasing due to changes in the political realm. The discussion outlines a research agenda and possible counter-moves, such as more direct democracy and having open markets for political favours. [ABSTRACT FROM AUTHOR]

Criticizes the paper 'Taxation and Voter Model for Australia 1968-69 to 1981-82,' by Geoffrey Brennan. Details of the median voter model; Sweeping assumptions that lack basis in the real world; Uselessness of the model as an explanatory procedure.

The article focuses on the Henry Review of the taxation system on superannuation and saving in Australia. It states that the review considers the complexity, inequity and inefficiency of the taxation system subjected to specific and stepwise changes. It discusses the sets of recommendation on for changes on superannuation such as the in integration of employer superannuation contribution to personal income tax system, expenditure-tax treatment, and retirement benefits.

The article focuses on the Henry Review of taxation's proposal for the social security system in Australia. It says that the Review emphasizes the full integration of tax and transfer systems and identifies some of the weaknesses of Australian social security system. However, the Review recommends that there should be categories for income support payment, youth payment rates that reflects the needs of young people, and increased maximum rate for high-need housing.

The article focuses on the role and design of rent and business income taxes envisaged in the Review of Australia's Future Tax System or the Henry Review. It says that Review's proposed business income tax covers three economic classes such as normal rate of return, mobile rents, and immobile rents wherein it suggests a 25% company tax rate from the current 30%. Moreover, it proposes strategic directions instead of detailed reforms, eliminating inefficient taxes and changing existing tax rate.

The Henry Review placed the taxation of rents from mines back on the national policy agenda. Mineral rent is potentially a source of neutral taxation. However, the various means of taxing resource rents in practice either fall short of the ideal of neutrality or collect for the revenue only a small proportion of the mineral rent. This article discusses the six principle instruments for taxing resource projects. It evaluates these forms of taxation in relation to stability, neutrality and government revenue maximisation. It suggests a combination of instruments that is likely to establish a good balance among objectives. [ABSTRACT FROM AUTHOR]

The article takes a close look at the taxation system in Australia as of 2007. Due to the different effective tax rates and the effects they have on alternative decision choice options, national productivity suffers a loss. However, the author also acknowledges that the tax rates reduce horizontal equity. He suggests that tax reforms will lead to a more equitable Australia. The article seeks to identify the current deficiencies in Australia's taxation system and then evaluate the potential reform options.