Research // Tax, Spending & the Budget
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March 2021
Opportunity lost
In March 2020, the Government lifted almost half a million Australians (470,000) out of poverty, including 75,000 children, by introducing the coronavirus supplement worth $550 per fortnight.
Submission: COAG Reform Fund Amendment (No Electric Vehicle Taxes) Bill 2020
The Australia Institute welcomes the opportunity to make a submission on the COAG Reform Fund Amendment (No Electric Vehicle Taxes) Bill 2020 (the No EV Tax Amendment).
February 2021
Unemployment payments and work incentives: An international comparison
A study of 33 OECD countries shows that Australia could substantially lift its unemployment payments without any meaningful disincentives for working. The Government has argued that Australia’s internationally low unemployment payments are needed, in part as an incentive to encourage the unemployment to look for and accept work. This briefing note tests the Government’s theory
December 2020
Polling: National Political Issues
The Australia Institute surveyed nationally representative samples of over 1,000 Australians each month from August about what they think the most important national political issue is right now. In every month, more Australians identified the economy as the most important national political issue than any other issue (between 37% and 48%). Health was second-most likely
November 2020
A comparison of the economic impacts of income tax cuts and childcare spending
A comparison of the impact on employment of child care expenditure and income tax cuts of an equivalent net cost to the budget. The clear superiority of childcare expenditure in stimulating economic activity reflects the concentration of the benefit on a cohort with much greater capacity for labour supply response.
October 2020
Not For Publication
Budgets are a key part of Australia’s democratic system, with budget papers giving the public a valuable opportunity to see how much money is spent and on what. Some items in federal budgets are not made public, however, and are marked ‘not for publication’ or ‘nfp’. Often, items claimed as nfp are still being negotiated,
Tax cuts or spending: What is the most effective stimulus?
Bringing forward stage 2 of the tax cuts is ineffective stimulus. Up to 12 times as many jobs could be created if an equivalent amount of money was spent on labour intensive industries.
Tax and Wellbeing: The impact of taxation on economic wellbeing
It has been claimed that higher levels of taxation weaken the economy but a comparative study of 188 economies shows that higher levels of taxation are correlated with higher average income. The positive correlation also exists with other measures of economic wellbeing. Please note: this report was updated on 8th December 2020, correcting an error
September 2020
Early tax cuts as stimulus – gender analysis
The benefit from bringing forward personal income tax cuts would mostly go to high income men. Despite recession job losses affecting women more than men, $2.19–$2.28 of the tax cut will go to men for every $1 that goes to women.
Reforming Tasmania’s state tax system – Some options
There hasn’t been any wide-ranging public discussion concerning the need for reform of the Tasmanian state taxation system, or what such reform might look like, since the State Tax Review Panel process initiated by then-Treasurer Michael Aird in 2010, and which was abruptly terminated in November 2011. Tasmania’s state tax system contributes a smaller proportion
Polling: Voters Want JobSeeker Boost, Government Spending over Tax Cuts
New research from The Australia Institute has shown more voters want to see Government spending going towards supporting those looking for work and spending on infrastructure and services than for it to be used to hand out income tax cuts.
Early tax cuts as stimulus
Bringing forward personal income tax cuts would see more than 50% of benefits go to the highest 10% of income earners and 79%-91% of benefits to the top 20% of earners. Just 3%-4% of the benefit would go to the lower half of all income earners. High income earners would save some or all of
August 2020
July 2020
JobKeeper: A proposal for clawing back unnecessary spending
Rather than dumping JobKeeper, we can reform it in such a way that more of the payment is clawed back by the government and that can be done by making it taxable at a much higher rate than other business income. This can be achieved very quickly, merely by increasing the rate at which JobKeeper
Gender experiences during the COVID-19 lockdown
The health response to COVID-19 has resulted in large increases in measured unemployment and underemployment as well as large falls in the total number of hours worked. While the size of these labour market effects has been widely discussed, the gender distribution of these impacts has not.
June 2020
Participating in growth: Free childcare and increased participation
The provision of free childcare provides the rarest of economic policy opportunities – it’s both an effective form of fiscal stimulus in the short term and has the capacity to boost the long-term participation rate and, in turn, the long run rate of economic growth.
The Reconstruction Memorandum
Eden-Monaro Polling: Economy and Climate Change Major Issues for By-Election
New research from The Australia Institute has found that the economy and climate change are the two most important issues for voters in the seat of Eden-Monaro, with a majority of voters saying economic stimulus following the COVID-19 crisis should also address and build our resilience to climate change.
Government debt won’t hurt us
Treasury forecasts unemployment rising to 10 per cent in the June quarter and that without the JobKeeper allowance unemployment would be 5 per cent higher at 15 per cent. The Government responded with a series of spending packages with a cumulative total of $193.6 billion. That inevitably means more deficit spending over and the next
May 2020
Great Southern Hand: State emergency economic responses to COVID-19
COVID-19 had an immediate economic and social effect on all Australians. As businesses shut, state borders closed and millions of Australians lost all or part of their income, State Governments stepped in and provided immediate relief. This report compiles state government spending in support of existing businesses and community organisations in response to the COVID-19
Eden-Monaro Polling: Majority of Voters Want JobSeeker Increase, $60B JobKeeper Hole Raises Pressure
‘Snap back’ or slide down: The impact of a 10 percent recession on the growth path for Australian GDP
If the Australian economy shrinks by 10 percent in the first half of 2020 it will likely take at least 21 months before Gross Domestic Product (GDP) reaches the levels achieved in the December quarter of 2019. Australia has never experienced such a deep and long-lasting reduction in the level of its national income. In
Tasmanian Design Principles for Fiscal Policy in the Pandemic
The economic crisis brought on by the coronavirus pandemic requires fast, large, effective and well targeted fiscal stimulus. While the size of the federal government’s initial three spending packages is appropriate as an initial response, both the shape of that response and the design of future spending measures need to be carefully evaluated. While the
April 2020
Design Principles for Fiscal Policy in a Pandemic
The economic crisis brought on by the coronavirus pandemic requires fast, large, effective and well targeted fiscal stimulus. While the size of the government’s initial three spending packages is appropriate as an initial response, both the shape of that response and the design of future spending measures need to be carefully evaluated. This paper argues
A generous increase in Newstart?
On Sunday 22 March the Prime Minister, Scott Morrison, and Treasurer, Josh Frydenberg, announced a package of measures as part of their Economic Response to the Coronavirus (ERC). That response included a new Coronavirus Supplement to the Jobseeker Payment (formerly Newstart) to be paid at $550 per fortnight. This is a significant and unprecedented increase in