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Analysis and Comment (56)

We’ve all experienced the frustration of waiting for public transport, but would we pay more tax for improvements? We’ve all experienced the frustration of waiting for public transport, but would we pay more tax for improvements? Purple Wyrm/Flickr

Six ways to boost funding for better public transport

Although Australia’s tax-to-GDP ratio is low by international standards, no-one wants to discuss how we might pay for the improvements needed to public transport, and even less the need for taxation to…
Irish treasurer Michael Noonan is keen to ensure Ireland’s tax system remains “competitive”. Irish treasurer Michael Noonan is keen to ensure Ireland’s tax system remains “competitive”. EU Council Eurozone/Flickr

Ireland’s move to close the ‘double Irish’ tax loophole unlikely to bother Apple, Google

Ireland has this week moved to change its tax law, closing the “double Irish” tax avoidance technique widely used by multinational enterprises including Google and Microsoft. In very broad terms, the current…
Finance minister, Michael Noonan, made bold predictions for the Irish economy. Finance minister, Michael Noonan, made bold predictions for the Irish economy. Niall Carson/PA Wire

There’s more to Ireland than a ‘double Irish’ tax loophole

Ireland is to phase out its controversial “double Irish” tax scheme. It follows international criticism and the European Union’s investigation into the legalities of Apple and Ireland’s tax arrangement…
Whichever way you look at it, tax cuts cause losses for all. Whichever way you look at it, tax cuts cause losses for all. PA Wire

How Cameron’s tax giveaway will end up costing you more

One of the Conservative Party’s major promises to emerge in its party conference was the promise of tax cuts to reduce the burden of government on hardworking families who do the right thing. Many critics…
The ATO considers Bitcoin property, but rulings in other countries leave room for debate. The ATO considers Bitcoin property, but rulings in other countries leave room for debate. Pierre Sibileau/Flickr

Bitcoin ruling still doesn’t answer which country has the right to tax

It’s been about five years since bitcoin emerged online, claiming to be the world’s first digital cryptocurrency. Bitcoin functions as a form of digital cash; really, it is a technology, using cryptography…
A cheap or costly drop? You might be surprised to find out how Australian taxes on petrol compare to overseas. A cheap or costly drop? You might be surprised to find out how Australian taxes on petrol compare to overseas. AAP/Andrew Brownbill

FactCheck: do Australians pay high petrol taxes?

UPDATED ON TUESDAY 22 JULY: See editor’s note below for details on the updates. In this year’s federal budget, the Abbott government moved to restart automatically increasing the fuel excise in line with…
The Palmer United Party, including new Senator Jacqui Lambie, is unlikely to support unpopular but necessary tax reform. The Palmer United Party, including new Senator Jacqui Lambie, is unlikely to support unpopular but necessary tax reform. Lukas Coch/AAP

The new Senate looms as a disaster for tax reform

It’s unlikely “The Political Sayings of Malcolm Fraser” is a well-thumbed volume in Tony Abbott’s library. Yet this week, in the wake of the Senate throwing his government’s budget plans into disarray…
Last year’s merger between Glencore and Xstrata has seen almost no tax paid in Australia in the last three years. Last year’s merger between Glencore and Xstrata has seen almost no tax paid in Australia in the last three years. Gaetan Bally/AAP

Hockey to tighten tax laws for multinationals but loopholes still exist

Treasurer Joe Hockey has said that he will improve the structural integrity of Australia’s tax system to address international tax avoidance by multinational enterprises. In particular, the tax law will…
A load worth bearing? A load worth bearing? Shutterstock

The super rich and tax: lifters or leaners?

A recent report from think tank Per Capita highlighted increasing concern over inequality in Australia’s taxation system, particularly whether high income earners are paying their fair share of tax. Despite…
Westfield Retail Trust’s chairman Richard Warburton deferred a vote on controversial plans to spin off the group. Westfield Retail Trust’s chairman Richard Warburton deferred a vote on controversial plans to spin off the group. AAP/Dan Himbrechts

Westfield’s stoush should shine light on tax paid by property trusts

Reports of the Westfield Group’s attempts to push through a A$15 billion restructure - complete with a boisterous showdown last Thursday - have mostly concentrated around the effect of the deal on its…
Taxes - and what we actually should use them for - are routinely ignored. Taxes - and what we actually should use them for - are routinely ignored. www.shutterstock.com

Tax still the elephant in the (budget) room

Joe Hockey’s first budget does not contain much tax reform, in spite of headlines on the “temporary budget repair levy”. It does contain some very big cuts to spending in the short and longer term - consistent…
The new budget has served up a big hit to Australia’s environment. The new budget has served up a big hit to Australia’s environment. Anton Balazh/Shutterstock

Litany of deep cuts for environmental programs

Budgets are often framed as give and take. But in the case of the environment, the government is taking large amounts of money in cuts, while giving little back beyond funding the Direct Action climate…
Finance Minister Mathias Cormann is faced with the challenge of justifying a new tax. Finance Minister Mathias Cormann is faced with the challenge of justifying a new tax. Alan Porritt/AAP

Australia’s tax system is half-baked and a deficit levy won’t help

The Victorian government has decided to reduce payroll tax by 0.05%, from 4.9% to 4.85%. The decision comes as the Commonwealth government contemplates an increase in income tax via a deficit levy. But…
Tony Abbott is preparing the electorate for his government’s first budget. Tony Abbott is preparing the electorate for his government’s first budget. Julian Smith/AAP

Debt and deficit, levies and taxes: let the real debate begin

The prospect of a “debt” tax or some sort of “deficit levy” to assist with the budget bottom line should prompt a clearer debate about the virtues of raising taxes versus cutting expenditure as a means…
From July, the ATO will be able to levy new fines on self-managed superannuation fund trustees. From July, the ATO will be able to levy new fines on self-managed superannuation fund trustees. Shutterstock

Taxing times for self-managed super funds

Self-Managed Superannuation Funds (SMSFs) are the fastest growing sector of the superannuation industry, spiking by 33% between 2008 and 2012, putting them in the sights of both the super industry and…
Go on Joe, raise the GST. Go on Joe, raise the GST. Daniel Munoz/AAP

Raise the GST: the conversation we have to have?

With eight months left on his contract, Treasury Secretary Martin Parkinson decided to jump into the GST debate on Wednesday night. In a speech to the Sydney Institute, Parkinson declared the federal budget…
Banks are asking former CBA chief David Murray, now heading the Financial Systems Inquiry, to consider tax breaks on interest income. Banks are asking former CBA chief David Murray, now heading the Financial Systems Inquiry, to consider tax breaks on interest income. AAP/Dean Lewins

Banks want you to pay less tax on interest, but why?

Australia’s big banks want the government to give their customers tax breaks on interest income, having told the Financial Systems Inquiry it would encourage more savings. In turn, the banks will have…
Quarantining losses is used across much of our public finance system. Negative gearing is an exception. Quarantining losses is used across much of our public finance system. Negative gearing is an exception. Image sourced from www.shutterstock.com

Why it’s time to quarantine negative gearing

Abolishing the sacred cow of negative gearing - where losses can be used as a deduction against other income - is considered by governments of all persuasions as electorally unpalatable. But this part…
The Commission of Audit may miss the true picture if it looks only at cutting costs. The Commission of Audit may miss the true picture if it looks only at cutting costs. Image sourced from www.shutterstock.com

To cut fairly, Commission of Audit should look at tax expenditures

In the lead-up to a crucial federal budget in May, it could be argued that requiring the Commission of Audit to identify revenue trends that could pose a risk to the budget’s structural integrity could…
Under the current tax regime, investors and cashed up owner occupiers are bidding up the cost of housing. Under the current tax regime, investors and cashed up owner occupiers are bidding up the cost of housing. Dean Lewins/AAP

Explainer: why negative gearing is bad policy

In an ideal (and economically efficient) world, tax policy would not influence the investment or consumption choices taxpayers make. In reality, this neutrality is rarely achieved. External factors influence…
An independent tax board might have taken some of the politics out of the Rudd government’s mining tax plan. An independent tax board might have taken some of the politics out of the Rudd government’s mining tax plan. Josh Jerga/AAP

Tax reform is hard…so it’s time for an independent tax board

The federal government’s Commission of Audit - tasked with finding efficiency and productivity improvements to deliver a surplus of 1% of GDP prior to 2023-24 - remains overshadowed by the many reviews…
Profit shifting by multinationals will be a key focus of the G20 under Australia’s presidency this year. Profit shifting by multinationals will be a key focus of the G20 under Australia’s presidency this year. AAP

The G20 and the taxing issue of making big business pay

Australia has officially commenced its presidency of the G20 and preparations are underway for the November 2014 Summit, when the leaders of the world’s biggest economies will meet in Brisbane. The G20…
Tax evasion campaigns are not new, but with them often comes an amnesty designed to maximise government revenue. Tax evasion campaigns are not new, but with them often comes an amnesty designed to maximise government revenue. HM Revenue & Customs/Flickr

Give the wealthy a tax amnesty, the budget needs it

The Australian Taxation Office continues its campaign to track down the offshore bank accounts of wealthy Australians, amid a global effort to improve tax transparency. One option the ATO has in its kit…
Treasurer Joe Hockey admits the government’s ‘open for business’ promise must be followed up with action. Treasurer Joe Hockey admits the government’s ‘open for business’ promise must be followed up with action. Alan Porritt/AAP

Abbott’s ‘open for business’ honeymoon is over

From a three-and-a-half year high last month, business confidence data for October shows the post-election honeymoon is over, with business conditions continuing to underperform in non-mining sectors…
Representing the 90%. Representing the 90%. Dave Thompson/PA

Britons say no to smaller state

Britain is still a majority social-democratic country. That is, politically, the most significant finding of the latest British Social Attitudes survey published this week. Most people want a country which…
Tax loopholes have cost Tanzania billions. Tax loopholes have cost Tanzania billions. David Parry/PA

For G20 leaders, poverty is a taxing issue

The G20 has been dominated by Syria, tax reform, and playground infighting among world leaders. But where is the talk of ending hunger, eradicating diseases or cancelling debts? Back in 2005, as the G8…
The Rudd government’s changes to fringe benefit tax concessions on cars is good environmental policy, but bad news for the manufacturing sector. The Rudd government’s changes to fringe benefit tax concessions on cars is good environmental policy, but bad news for the manufacturing sector. AAP

Manufacturing threatened by Rudd’s changes to car tax deductions

The decision to terminate the statutory formula method under the fringe benefits tax regime will have significant ramifications on the car industry, the local car manufacturing industry and employment…
Tax protests outside a Starbucks in London. But do people really care enough to make a difference? Tax protests outside a Starbucks in London. But do people really care enough to make a difference? Steve Parsons/PA

Consumers won’t boycott Apple or Google over tax … yet

The tax arrangements of major brands such as Google, Apple and Amazon have prompted a fierce debate over questions of organisational ethics, social justice and international co-operation. But as a consumer…
Lame duck, dying swan - headline writers have had fun with the treasurer’s sixth budget, but the fact is this budget will be remembered for its fiscal irresponsibility. Lame duck, dying swan - headline writers have had fun with the treasurer’s sixth budget, but the fact is this budget will be remembered for its fiscal irresponsibility. Image sourced from www.shutterstock.com

Swan’s budget is a lame effort from a dying government

It has been pretty difficult to get too excited about the latest budget – it is a lame Swan effort from a dying government. It will mostly be remembered as a monument to fiscal irresponsibility. The budget…

Surplus hopes pinned on heroic assumptions

As a recent Grattan Institute report showed, Australian governments face a decade of deficits unless governments make tough decisions to both reduce expenditure and increase taxes. How does the 2013-14…
Despite much debate over the scope and efficiency of the GST, the major political parties have left the possibility of reform off the agenda. Despite much debate over the scope and efficiency of the GST, the major political parties have left the possibility of reform off the agenda. Image from www.shutterstock.com

The GST debate: is reform necessary?

Few taxes have been as politically fraught as the GST. The deal, brokered by the-then Prime Minister John Howard and the Democrats in 2000, was not only controversial for its political ramifications, but…
Governments have been increasing expenditure, despite shrinking tax revenues. But our structural deficit is unsustainable and must be tackled. Governments have been increasing expenditure, despite shrinking tax revenues. But our structural deficit is unsustainable and must be tackled. Image sourced from www.shutterstock.com

Federal Budget 2013: Why our unsustainable structural deficit must be tackled

All Australian governments, and ultimately all Australians, are faced with making tough decisions in their budgets. Without significant reductions in government expenditures and the services they provide…
The Business Council of Australia’s call for long-term thinking is moving in the right direction, but wants both expensive spending programs and lower taxes. The Business Council of Australia’s call for long-term thinking is moving in the right direction, but wants both expensive spending programs and lower taxes.

Business lobby yearns for a long-term view, but offers a contradictory wish list

There is much to consider when thinking about our future as a nation. We are a small, resource-rich, open economy facing a volatile global environment. We are particularly vulnerable to the impact of climate…
The Gillard government’s changes to the tax treatment of superannuation make for a more complex system, rather than a more equitable one. The Gillard government’s changes to the tax treatment of superannuation make for a more complex system, rather than a more equitable one. AAP

Illogical tax tinkering won’t lead to a sustainable super system

Today, the Australian government announced additional taxation of high income funds in the decumulation or retirement stage of investments in superannuation. Arguably, the changes add more to complexity…
A single lump payment and the ability to pool family income should replace the current complicated family tax benefit system. A single lump payment and the ability to pool family income should replace the current complicated family tax benefit system. Flickr/ajusticenetwork

Restore the family wage by simplifying the tax system

Two changes are needed to the taxation and family benefits system to improve efficiency and achieve equity between families. The first step is to replace the current complicated family tax benefit payment…
Increasing the cost of petrol won’t wean people onto more fuel efficient cars. Increasing the cost of petrol won’t wean people onto more fuel efficient cars. Chris Murray

Higher tax proposal only adds fuel to efficiency debate

New research by economists from the Australian National University claims that if petrol excise duty were linked to inflation, Australians would drive less and buy more fuel-efficient cars. But higher…
If petrol prices are relatively low, why worry about burning the stuff? If petrol prices are relatively low, why worry about burning the stuff? David Neubert

Gas guzzlers fuelled by shrinking petrol tax

An iron law of economics is that people respond to incentives. If the petrol price goes up, it should be of little surprise that consumers alter their choices at both the petrol pump and the car dealership…
Obama outlined an ambitious economic agenda to foster growth and rebuild America’s middle class. Obama outlined an ambitious economic agenda to foster growth and rebuild America’s middle class. AAP

State of the Union: Obama lays out his economic agenda

President Obama left little doubt during his State of the Union address as to what his top priority will be in the years ahead. “A growing economy that creates good, middle-class jobs”, the President declared…
The abolition of royalties, as well as fluctuations in iron ore and coal prices, have had an effect on the mining tax’s capacity to generate revenue. The abolition of royalties, as well as fluctuations in iron ore and coal prices, have had an effect on the mining tax’s capacity to generate revenue. AAP

Mining tax design is responsible for revenue shortfall

Why hasn’t the Minerals Resources Rent Tax (MRRT) produced significant revenue? The answer lies in a combination of basic features of the MRRT design, and the recent fluctuation in prices of iron ore and…
Will stronger economic integration test the resilience of the Australia-New Zealand relationship? Will stronger economic integration test the resilience of the Australia-New Zealand relationship? AAP

Australia and New Zealand’s slow and steady move towards economic integration

In March this year Australia and New Zealand will celebrate the 30th anniversary of a trade agreement known as Closer Economic Relations (CER). Few Australians and New Zealanders are likely to notice…
The rollout of the NBN provides small businesses with an opportunity to actively embrace e-commerce. The rollout of the NBN provides small businesses with an opportunity to actively embrace e-commerce. AAP

Small business policy for 2013: what should be on the list?

Last Wednesday, Prime Minister Julia Gillard announced the start of what is set to be Australia’s longest election campaign. Set for the 14th of September, it will last approximately eight months. One…
French Finance Minister Pierre Moscovici (left) and German Finance Minister Wolfgang Schaeuble can agree on one thing: a financial transaction tax. French Finance Minister Pierre Moscovici (left) and German Finance Minister Wolfgang Schaeuble can agree on one thing: a financial transaction tax. AAP

Europe has more to lose than to gain from a financial transaction tax

At a meeting in Luxembourg last week, the finance ministers of 11 members of the European Union (Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain) agreed…
The GST is off-limits for both political parties, but a restructure could result in an increase in national productivity and incomes. The GST is off-limits for both political parties, but a restructure could result in an increase in national productivity and incomes. Image from www.shutterstock.com

Reforming GST is the key to productivity growth

With appropriate investment in design and explanation, a larger GST reform package could be one of the most effective and easiest options to help reverse Australia’s lagging productivity growth. Changes…
Increasing workforce participation of women and older people could increase Australia’s GDP by $50 billion. Increasing workforce participation of women and older people could increase Australia’s GDP by $50 billion. AAP

How can Australian governments change the game for economic growth?

If Australian governments are serious about raising rates of economic growth, they must reform the tax mix and increase the workforce participation rates of women and older people. Each of these reforms…
Australia’s approach to alcohol taxation is riddled with inconsistencies. Australia’s approach to alcohol taxation is riddled with inconsistencies. Johnsyweb

Calling time on alcohol taxation in Australia

Alcohol is a prime target for taxation. It’s a good source of government revenue; it allows governments to recoup costs for providing services to drinkers (such as accident and emergency care and policing…
While the budget proved somewhat of an empty shell for corporate Australia, small businesses had reason for cheer. While the budget proved somewhat of an empty shell for corporate Australia, small businesses had reason for cheer. tiny banquet committee

A political shell game for small business?

The 2012 federal budget offers to return a modest surplus of $1.5 billion over the financial year 2012-2013, with the hope of further surplus budgets in the following years. In normal circumstances, this…
As the government scrambles to balance the books, the business community has voiced its fears that Treasurer Wayne Swan will renege on his promise of a 1% reduction in the corporate tax rate. As the government scrambles to balance the books, the business community has voiced its fears that Treasurer Wayne Swan will renege on his promise of a 1% reduction in the corporate tax rate. AAP

Corporate tax cuts at risk - but are they really required?

In the last 24 hours, we have heard mutterings about the possibility that an earlier commitment to cuts in the corporate tax rate may not go ahead in the budget. Some in the business community have, unsurprisingly…
Improving the transparency and evaluation of major infrastructure projects is one way to increase productivity. Improving the transparency and evaluation of major infrastructure projects is one way to increase productivity. AAP

Budget provides a chance to carve out the path to higher productivity

Productivity growth results in more valued output per unit of production input, or the same output for fewer inputs. Growth of productivity requires changes involving the adoption of new technology, better…
The ability of our politicians to achieve a surplus or balance the budget is spuriously taken as a measure of fiscal responsibility. The ability of our politicians to achieve a surplus or balance the budget is spuriously taken as a measure of fiscal responsibility. AAP

Returning to surplus: the policy wall our politicians can’t see over

The Federal Government’s quest to return the budget to surplus raises many questions and not just about what immediate rationale there is on economic grounds for this strategy. It also raises deeper questions…
Raising the income tax rate can disproportionately burden young people and low-income earners. Raising the income tax rate can disproportionately burden young people and low-income earners. www.seniorliving.org

Counting the costs of higher taxes

Oliver Wendell Holmes, jnr famously said that he liked paying income tax: it was the price of civilisation. Sure, he bought his civilisation at about seven cents in the dollar, but the general point remains…
Income inequality is a big issue for Australia, but tax reform offers many solutions. Income inequality is a big issue for Australia, but tax reform offers many solutions. AAP

Tax Forum: overcoming private affluence and public squalor

What can we expect from the Tax Forum at Parliament House today and tomorrow? We may anticipate consensus that the tax system should be efficient, fair, understandable and effective in raising the revenue…
fenceneoliminal. fenceneoliminal. Flickr/Neoliminal

Housing and tax: why is reform so hard?

There will be a myriad of issues debated at this week’s Tax Forum but top of the wishlist for many experts is reforming housing taxation. Housing makes up the lion’s share of household wealth in Australia…
European Commission President Jose Manuel Barroso says the FTT could raise 55 billion euros a year. European Commission President Jose Manuel Barroso says the FTT could raise 55 billion euros a year. AAP

The EU’s adopting a financial transactions tax, so why don’t the rest of us?

Momentum is building behind the global campaign to impose a tax on transactions in financial markets, with European Commission President Jose Manuel Barroso announcing plans to introduce the measure as…
Increasingly, the impossible dream? Government policy has contributed to a lack of affordable housing. Increasingly, the impossible dream? Government policy has contributed to a lack of affordable housing. AAP

Tax Forum: reforming how property is taxed means we’ll tackle affordability

The Federal government’s Tax Forum offers a unique opportunity to begin remedying some of the inefficiencies and inequities we are witnessing in our housing system. Housing in Australia has become an unaffordable…
A GST exemption on basic food was a political argument, not economic, and should be reviewed. A GST exemption on basic food was a political argument, not economic, and should be reviewed. AAP

Tax Forum: the GST exemption should come off food

It is a shame that the GST is off the menu at October’s Tax Forum, because one of its central tenets – the exemption of basic food and beverages – deserves to be debated again. The exemption is basically…
Is it time to reform the GST? Is it time to reform the GST? AAP

Tax forum: GST needs changing, so let’s debate it

While changes to the GST are not an explicit item on the Tax Forum agenda, they should be and the issue will arise anyway. A broad and comprehensive GST tax base along the lines of the New Zealand model…

Research and News (3)