Australia's Future Tax System

Architecture of Australia's tax and transfer system





Executive summary




Section 1: Context of the review


1.1 Introduction

1.2 Emerging challenges and opportunities

1.3 An opportunity for reform

Section 2: Overview of the tax‑transfer system


2.1 What the tax‑transfer system looks like

2.2 Components of Australia's tax‑transfer system

2.3 Many Australian taxes

2.4 Australian government taxes

2.5 State taxes

2.6 Tax expenditures

2.7 Many Australian transfers

2.8 Australian government transfers

2.9 State transfers

2.10 Administration of the tax‑transfer system

2.11 Additional tax and transfer tables

Section 3: The economic structure of the tax‑transfer system


3.1 The economic impacts of the tax‑transfer system

3.2 What does equitable distribution mean?

3.3 The distribution of wealth, income and taxes

3.4 The distribution of taxes and transfers through time

3.5 Measuring taxation of labour, savings and investment — analytical tools

Section 4: History of Australia's tax‑transfer system


4.1 Historical trends in tax

4.2 Historical trends in transfers

4.3 Australian government and State revenue powers

Section 5: International comparison of Australia's tax‑transfer system


5.1 Australia's tax to GDP ratio by OECD standards

5.2 Tax to GDP ratios in other countries including our immediate neighbours

5.3 Australia's tax mix compared with other OECD countries

5.4 Australia's top personal tax rate

5.5 Approaches to taxing retirement savings

5.6 Comparisons of the top personal tax rate on capital income

5.7 OECD comparison of Australia's corporate tax rate

5.8 Taxes on fuel

5.9 OECD comparison of Australia's tax‑transfer system

Section 6: The mix of taxes on work, investment and consumption


6.1 Australian Government and State taxes on labour, capital and consumption

6.2 Taxes on labour, capital and consumption — Australia in the OECD

Section 7: The personal tax‑transfer system


7.1 The role of Australia's personal tax‑transfer system

7.2 How individuals interact with the personal tax‑transfer system

7.3 Important impacts of the personal tax‑transfer system

7.4 Workforce participation

7.5 Savings and investment incentives

7.6 Incentives to improve skills

Section 8: Taxation of saving and investment


8.1 Savings and investment choices facing individuals

8.2 Differences in the tax treatment of different assets and financing arrangements

8.3 The treatment of different holding entities

8.4 The treatment of cross‑border investments

8.5 The treatment of natural resource assets

Section 9: Taxing goods and services


9.1 Raising revenue for general public expenditure

9.2 Achieving non‑tax policy objectives with indirect taxes

9.3 Taxation of fuel

Section 10: State taxes


10.1 Introduction

10.2 State taxes have changed over time

10.3 Issues with the taxes levied by the States

10.4 Other own‑source revenue

10.5 Local government taxes

10.6 Federal fiscal relations

Section 11: Complexity and operating costs of the tax‑transfer system


11.1 Introduction

11.2 Community concern

11.3 How big is the problem?

11.4 An optimal level of complexity and operating costs

11.5 Sources of complexity and operating costs

11.6 A cycle of complexity

11.7 Recent attempts to address complexity in the tax‑transfer system

Section 12: Household assistance measures for the Carbon Pollution Reduction Scheme


12.1 Impacts of the scheme on households

12.2 Broad distributional price impacts

12.3 Australian Government's commitments to assist households

Appendix A: Terms of Reference


Appendix B: What are the potential tax bases?