Research // Tax, Spending & the Budget
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August 2017
In the dark on Adani deal
The Palaszczuk government’s special royalty deal with Adani remains secret after Treasury blocked a Right to Information request. 2000 pages relating to the ‘clear’ and ‘transparent’ royalty framework were almost entirely redacted. Public servants expressed concerns about analysing the deal after it has been offered. The Queensland Treasury has refused to release the royalty subsidy
July 2017
Trusts and Tax Avoidance
A new report released today from The Australia Institute’s Senior Research Fellow, David Richardson shows that, according to ATO data, the equivalent of 21.6 per cent of Australia’s national income was run through a trust. The latest ATO figures show there are 823,448 trusts with assets of $3.1 trillion, and total business income of $349.2
Royalty flush II
Inquiry into Horizontal Fiscal Equalisation
State governments are universally supportive of resource development. They provide considerable financial support to the sector, yet receive relatively little in return. We are unaware of any example of states using the HFE system to argue against resource development.
Report: South Australia Bank Levy
A new report from The Australia Institute’s Senior Economist, Matt Grudnoff, reviews the economic impact of the South Australian government’s proposed bank levy. The research finds that the banks are not only very capable of paying the 0.0036% levy on the same liabilities that the federal government levy is based on, but also that the
June 2017
Levy on the Major Banks
The Australia Institute welcomes the opportunity to a submission to the Inquiry into the Major Bank Levy Bill 2017 and the Treasury Laws Amendment (Major Bank Levy) Bill 2017. This submission should be read in conjunction with some earlier submissions to Senate Inquiries. In particular we refer to our submission to the Senate Economics Committee
Economics of unconventional gas development
Development of unconventional gas in the NT risks connecting the NT to the chaos in wider Australian gas markets. As the nation becomes a major gas exporter with record production there have been no winners.
A progressive Medicare Levy
A new report models the impact of an increased Medicare Levy in comparison to a progressive Medicare Levy, more like income tax, on the spread of Australian income earners. The Government proposes to increase the Medicare levy to 2.5 per cent of income from July 2019. That would mean a gradual switch in the tax
Of Levies, Profits, and Backstops: The Bank Tax in Context
The Australian government’s surprising decision to impose a new tax targeted precisely at the biggest financial institutions in the country continues to generate public debate. We have reviewed the structure, likely effects, and economic and regulatory context of the proposed 0.06% levy on selected liabilities of the 5 largest financial institutions in Australia. The loud
Bank levy to have minor impact on average Australians
The Australia Institute has tested two claims made in response to the bank levy announced in the Federal Budget: that the impact of the levy will be passed onto customers, and that it will be borne by shareholders, affecting Australian superannuation savings. —For paper see PDF below— In either scenario, the research finds that the
It boondoggles the mind
The Northern Australia Infrastructure Facility (NAIF) is a $5 billion government fund for concessional financing to build infrastructure in northern Qld, NT and WA. The default financing mechanism is a loan. Adani has applied for a concessional loan of nearly $1 billion from the NAIF for a rail line so that it can export coal
May 2017
Queenslanders don’t want Adani subsidies: Poll
A new ReachTEL poll of 1,618 Queenslanders shows strong opposition to state and federal subsidies for the Adani coal proposal, including among LNP and One Nation voters. -Polling results in attachment below- 59% of Queenslanders oppose Federal and State taxpayers’ money being used to fund Adani’s project. 37% said they were strongly opposed and just
Paying for zero
The Labor party has announced a policy to limit the deduction that can be claimed for managing your tax affairs to $3,000. The complexity of the tax system means that some people are spending large amounts of money on accounting advice to take advantage of tax loopholes to significantly reduce their taxable income. They can then reduce their disposable
Almost two thirds of Australians oppose billion dollar loan subsidy to Adani: poll
New polling from The Australia Institute shows almost two thirds (64%) of Australians oppose a taxpayer-funded subsidised loan to the Adani coal mine project, as reports emerge the Queensland Government is considering an additional $320 million subsidy to Adani in the form of a ‘royalty holiday’. —For polling brief see attachement below— “Providing a billion
Capital gains tax discount by electorate
New research from The Australia Institute has found that the Prime Minister’s electorate is the biggest reaps the greatest benefit from capital gains tax discount, by a large margin. CGT discount expected to cost the budget $9.6 billion dollars this year (2016-17) $44 billion over the next four years. Historical data also shows that, in
Royal Pardon: How much an Adani royalty holiday could cost Queenslanders
Media reports suggest that the Palaszczuk Government intends to give Adani a discount on the royalties the company would pay to extract the state’s coal. If the Queensland government settles on a royalty holiday for Adani’s proposed coal mine, similar to that used earlier by the NSW government, the cost to Queenslanders will be almost
April 2017
Royalty Flush: Risks to NSW coal royalties from Adani and Galilee Basin development
Development of large coal mines in Queensland’s Galilee Basin will reduce thermal coal prices. This also reduces royalty revenue received by NSW. The Adani project alone is likely to reduce NSW revenue by nearly $50 million per year. The NSW government should oppose subsidies to Adani.
March 2017
The Impact of Penalty Rate Cuts on Personal Tax Revenue and Welfare
Research from the Australia institute has calculated the impact of the recent Fair Work Commission decision to cut penalty rates on the Commonwealth Budget. The paper from Richard Denniss, Chief Economist at The Australia Institute, found reduced income tax collection from lower wages as well as greater welfare assistance for low income earners is, based on
Easytax resurrected: A look at One Nation’s economic and taxation policies
Pauline Hanson’s February 2017 announcement that One Nation will again campaign for a flat-rate 2 per cent turnover tax takes her back to a policy position she first adopted nearly two decades ago.Initial analysis suggests that a shift from the current taxation mix to a 2 per cent turn over tax as proposed by Senator
February 2017
Inequality & poverty in Australia: Still no case for the removal of the clean energy supplement
In the 2016 budget the government announced that it would close carbon tax compensation to new recipients of welfare payments. This would save the government $1.4 billion over the forward estimates, by reducing the income of some of the poorest Australians by around $10 per fortnight. This cut was introduced to the Parliament in September
Review of the Petroleum Resource Rent Tax
The Australia Institute welcomes the opportunity to make a submission to Treasury’s Review of the Petroleum Resource Rent Tax (PRRT). The review occurs at a time when Australia is set to become the world’s largest gas exporter, yet PRRT revenues are declining. Several major gas projects are unlikely to pay PRRT for decades, according to
Oligopoly money
A full third of the benefit of a company tax cut would be enjoyed by just 15 companies in Australia. Once phased in the cut would be worth $6.7 billion per year to these companies. Most of these companies are ‘oligopolies’ that dominate their markets and have little incentive to reinvest proceeds of a tax
January 2017
Company tax and foreign investment in Australia
“…do you know any foreigners you want to give 5% of our national company income to? Any deserving cases out there?” The available evidence suggests that Keating is indeed correct — Australia is on the brink of handing a large gift to foreign investors while the evidence suggests Australia will not get even the dubious
December 2016
Taxing times
This paper looks at the effect that the fall in tax revenue post Global Financial Crisis (GFC) had on the Commonwealth’s budget. It does this by modelling what would have happened if revenue had instead remained at the government’s tax revenue target of 23.9 per cent of GDP. The difference between what actually happened and
NAIF Polling
The NAIF will spend $5 billion of public funds in Northern Australia on infrastructure that is unable to attract commercial financing, which could include subsidising the controversial Adani Carmichael coal mine. Australians don’t want their money funding infrastructure for coal and gas companies under the $5 billion Northern Australia Infrastructure Facility (NAIF), national polling released
The $5 levy on iron ore in WA
The Australia Institute has assessed the proposal for a $5 levy on iron ore in Western Australia. The policy should be supported as a pragmatic alternative to a resource rent tax. The analysis finds that if the $5 levy had been imposed on relevant production over the last five years it would have raised $11.5