Australia tops the charts... in tax deductions

Image source: Wikimedia Commons

In the International Monetary Fund (IMF)’s recently released ‘Reforming Tax Expenditures in Italy: What, Why, and How?’, Australia was found to forgo more revenue as a proportion of GDP than all other OECD nations.

Although tax expenditures result in the government forgoing revenue, they have not been widely scrutinized and cannot be comprehensively measured. As a method through which specific groups, sectors, regions and activities receive a ‘myriad of discounts in the tax code’, tax expenditures continually arise as the subject of debate.

Announcements end superannuation budget speculation?

Image source: QLD government

Following recent media speculation about possible changes to superannuation in the upcoming 2013–14 Budget and concerns about the inequity of tax concessions for superannuation, on 5 April 2013 the Government announced a range of measures to superannuation tax, contribution and age pension arrangements. The Government’s overall intent in making these changes was to ‘improve the fairness, sustainability and efficiency of the superannuation system’. So what are the major changes proposed by the Government and how do they contribute to fairness?

Fuel tax credits: are they a subsidy to fuel use?

Image source: Victoria DPI

Recently there has been debate over the nature of the rebate of the excise paid on fuels, paid under the fuel tax credits scheme. This FlagPost clarifies the purpose of the rebate.

Carbon pricing mechanism—personal income tax reform

Image source: yourhome.gov.au

As part of its Clean Energy Future package, the Government has announced a series of personal income taxation reforms. This will involve increases to the marginal taxation rates in 2012-13 and 2015-16, as well as changes to the tax free threshold and low income tax offset.

The Parliamentary Library has prepared a brief on the proposed changes, which is available on its climate change website. The brief presents the details of the proposed tax reform, compares it to the personal income tax reform proposed by the Australia's Future Tax System review, and presents the changes to the marginal income taxation rates and thresholds since 1983-84.

Carbon Pricing Mechanism—Which 500 companies pay the tax?

Image source: NSW Government

The Government has been clear that only Australia’s 500 biggest ‘carbon polluters’ will be directly affected by the proposed Carbon Pricing Mechanism (CPM). This is down from the 1000 that would have been liable under the previous Carbon Pollution Reduction Scheme, mainly due to the exclusion of fuels from the CPM. There has been some speculation as to which companies would be included in the Government’s list of 500, and which ones are Australia’s ‘top 50 carbon polluters’. The Parliamentary Library has published a short brief with some information on determining which corporations are likely to be included, and an explanation on why a definite list of 500 companies is not publicly available.

The 2011 tax forum and the 1985 tax summit

On Sunday 20 March 2011, the Treasurer announced in an Economic Note that a Tax Forum would be held on 4–5 October 2011 at Parliament House. This announcement has sparked interest in the potential scope of the tax forum, and the similarities that can be drawn to the Tax Summit held by the Hawke Government in 1985.