The 2024-25 Federal Budget will likely respond to significant cost-of-living pressures. The Albanese government have already amended the legislated stage 3 tax cuts implemented by the former coalition government. The original stage 3 tax cuts would have primarily benefited higher-income earners and the government claims that its changes will instead redirect the benefit to lower- and middle-income earners to assist with the rising cost-of-living. In this article we examine these changes for lower- and middle-income earners and discuss the trade-off between temporary and permanent measures in a ..read more

Voluntary work, the engine of countless charities and social initiatives, is often seen as having an intangible benefit or intrinsic value with little economic impact. Yet, this perspective overlooks a crucial truth: the voluntary sector is a powerhouse of untapped potential, capable of bolstering economies and fostering social good. Consider the sheer scale. In the United States alone, volunteers contribute an estimated $296.2 billion worth of volunteer hours annually. This translates into millions of hours poured into education, healthcare, environmental protection, and countless other areas ..read more

The government’s Economic Inclusion Advisory Committee has just published its second report. It was set up by Treasurer Jim Chalmers and Minister for Social Services Amanda Rishworth in 2022 to provide: non-binding advice on boosting economic inclusion and tackling disadvantage, including policy settings, systems and structures, and the adequacy, effectiveness and sustainability of income support payments. I am one of the members. This year, the report tackled a burning question: why has the gap between unemployment payments and age pensions widened? Unemployment and related payments for wo ..read more

When, if ever, is it acceptable for governments to restrict citizens’ liberty for their own good? In other words, can paternalistic intervention by government be justified? This question is key to the controversy surrounding many interventions targeted at social security recipients. This includes the Australian Government’s proposal of drug testing social security recipients in recent years. Paternalism and Australia’s social security system To some people, paternalism is a dirty word. It makes government interventions immediately suspicious. And this makes sense: respect for individual autono ..read more

Professional advisors may be guided by a variety of factors when recommending a business structure for their small and medium enterprise (SME) clients. This includes tax, exposure to personal liability, asset protection, access to equity capital, and costs of compliance. A mixed-method study The survey findings reported in this article are part of a mixed-method study of SME advisors in relation to business structures. During the qualitative phase of the research, 48 professional advisors were provided with one of 12 SME business scenarios, with each business scenario having different circumst ..read more

Negative gearing allows households that incur losses on rental income to deduct these losses from other sources of income. The Greens are currently advocating for the abolishment of negative gearing, as did the Australian Labor Party during their unsuccessful 2019 election campaign. The standard arguments surrounding negative gearing are two-fold. First, it provides a potential subsidy to housing investors, thereby increasing the supply of housing in the rental market. This directly benefits housing investors by reducing their tax burden and indirectly benefits renters by lowering housing rent ..read more

Globally, tax authorities have recognised that the use of tax haven has contributed to a reduction in taxes payable by firms as evidenced by a decline in effective tax rates and an increase in the difference between accounting and taxable income. Tax havens are typified by a lack of information exchange, secrecy in disclosures and regulatory, legal and financial arbitrage, and a nil or very low corporate tax rate. Oxfam (2016) reports that Australian investments in tax havens were estimated at US$56.4 billion in 2009. This increased to US$79.1 billion in 2014. Some of the more well-known tax h ..read more

Indonesia, with tax revenue accounting for 65.37% of total government revenues, grapples with a low tax ratio. According to the Organisation for Economic Co-operation and Development (OECD), in 2023, Indonesia’s tax ratio only reached 10.21% of GDP. This places Indonesia’s tax ratio among the lowest in the Asia-Pacific region, far below the average tax ratio of 19.1% for Asia-Pacific countries and 33.5% for OECD countries. Boosting tax compliance has become a pressing issue for the Indonesian Government. While traditional methods such as monitoring and enforcement are commonly employed, limite ..read more

If just one state of Australia, New South Wales, scrapped its stamp duty on real-estate transactions, about 100,000 more Australians would move homes each year, according to our best estimates. Stamp duty is an unquestioned part of buying a home in Australia – you put your details in an online mortgage calculator, and stamp duty is automatically deducted from the amount you have to contribute. It’s easy to overlook how much more affordable a home would be without it. That means it’s also easy to overlook how much more Australians would buy and move if stamp duty wasn’t there. The 2010 Henry Ta ..read more

Around 45% of Australians have private hospital insurance, despite access to free public hospital care through Medicare. One reason so many Australians are privately insured is because the government encourages them to be through rebates (carrots) and penalties for the uninsured (sticks). In two new research papers, we set out to learn just how effective these ‘carrots’ and ‘sticks’ are. Study 1 – lifetime health cover loading Our first paper looked at lifetime health cover loading (LHC), implemented by the Australian government in 2000. This ‘stick’ applies to people who purchase private hosp ..read more