Australia's Future Tax System

Final Report: Detailed Analysis

Chapter G: Institutions, governance and administration

G5. Monitoring and reporting on the system

Key points

Monitoring the tax and transfer system is essential to its long-term performance. Without government action, too little information will be collected about the operation of the system. This information is necessary to identify areas where particular transfers or taxes are not meeting their policy objectives. It can support research that improves understanding of the effects of the system, and guide policy responses to emerging problems.

High standards of transparency and accountability should apply to all forms of taxation, transfers and government expenditure. However, despite their similarities, tax expenditures and spending programs are not created, maintained, reviewed or reported in the same way. This means that there is often less transparency and accountability in the use of tax expenditures. While this situation continues, programs should not be delivered as tax expenditures unless there is a clear countervailing benefit in terms of efficiency, equity, complexity, sustainability and policy consistency.