Mandated superannuation contributions and the structure of the financial sector in Australia

Australian workers must contribute a proportion of their wage to superannuation. The mandated contribution rate has risen from 3% in 1992, to 9.5% today, and is scheduled to reach 12% by 2025. We use a financial computable general equilibrium (FCGE) model to simulate an increase in the contribution rate. We find that raising the contribution rate has consequences for traditional financial intermediaries, and for financial structure more generally. This is of interest to Australian policy makers currently concerned with the size and role of Australia’s banks, and the leverage of the household sector.     

Financial Literacy and Superannuation Awareness of Indigenous Australians: Pilot Study Results

Financial literacy in the general Australian population and how to improve it is now firmly on the national agenda, partly as a result of compulsory superannuation. This paper reports the results of a pilot study which explored the financial literacy levels and superannuation knowledge of Indigenous Australians living in an urban environment. Previous studies have indicated that social disadvantage has a strong correlation with poor financial literacy but previous surveys of financial literacy in Australia have not reported specifically on the Indigenous population. Findings suggest that in some areas financial literacy is significantly weaker than that in the general population. Several of the areas of comparative weakness relate to an over belief in the role of government and the extent to which financial matters are regulated. There is also a high level of desire for financial education and information but a lower level of usage of potential sources of financial information. The findings suggest that a closing of the financial literacy gap is required.     

Ageing Baby Boomers in Australia: Evidence Informing Actions for Better Retirement

The first Australian baby boomers are starting to retire. Consequently, it is essential to develop and apply a strong evidence base to facilitate their successful retirement and ongoing wellbeing. This review focuses on recent literature on pre‐retirement baby boomers to identify available research findings and gaps to be filled on retirement preparation. A notable shortage of empirical literature was found on pathways to retirement and financial plans. A trend emerged towards an intention to retire at an older age, and the main source of retirement income was expected to be superannuation. Over half of Australian boomers expect their savings to be sufficient; however, 30–50% anticipate a decline in their standard of living. The majority want the responsibility for funding retirement shared between the individual, government and employers. Further research is needed on the varying plans and expectations of men and women, of low‐skilled workers, and those from culturally diverse backgrounds.     

CONTESTING FAIRNESS AND FRAGMENTING GROUPS: CULTURAL NARRATIVES OF TAXATION AND CITIZENSHIP IN GLOBALISING AUSTRALIA

This paper explores the relationship between culturally mediated narratives of fairness, conceptions of the state, group and individual identities, citizenship and debates about globalisation in Australian perspectives on tax administration. It is based on a qualitative analysis of 2374 responses to a survey of attitudes to the Australian tax system. This paper emphasises that taxpayer's statements can be read as cultural acts that enrich our understanding of how people give meaning and significance to their lives. The majority of respondents reported that taxation should be levied fairly across social groups. However, this sense of fairness is being eroded by the widespread perception that the wealthy are avoiding their “fair share” of taxes. However, although citizens view tax administration as increasingly unfair, there is no evidence of wholesale disengagement from the system. The majority of people believe that the tax system has legitimacy and that it can be reformed. There is still scope for policy innovation that reinstates a sense of fairness, equity and balance to the tax system.     

CAN JUSTICE AND SHAME DETER AN ESCALATION IN TAX EVASION?

This study examines the roles that justice and shame management play in deterring escalation in tax evasion. Data were taken from the Graduates' Hopes, Visions and Actions Survey based on a sample of 447 Australian graduates who recently received their tertiary degrees. Path analysis reveals that both justice variables (societal and personal) indirectly affect tax non‐compliance through shame (or lack thereof). Injustice brings about a significant increase in unacknowledged shame which, in turn, leads to increased tax evasion. The path to tax evasion is also mediated by an attitude condoning non‐compliance, and dissociation. Of considerable interest is the finding that personal injustice, in contrast to societal injustice, has a direct link to tax evasion. The results of the study demonstrate that felt injustice triggers both emotional and cognitive responsiveness, and works to undermine moral obligation in tax compliance.     

Targets and Taxes: Explaining the Welfare Orientations of the Australian Public

Australia's welfare model – targeted payments alongside low but progressive taxation – exemplifies the targeted approach, prioritizing the needs of poorer citizens within the constraints of low taxation. But does this approach match the welfare orientations of Australia's voters? Does the public hold other views about welfare, emerging out of competing interests in welfare debates? We consider results of two questions included in the Australian Survey of Social Attitudes 2005. The first question asks respondents about four welfare goals that outline competing welfare orientations: targeting poverty, expanding health and education, enforcing the welfare rules and reducing welfare. The second question asks about four taxation goals drawing on similar orientations as established for welfare: targeting tax cuts, taxing for welfare, enforcing tax rules and reducing overall tax. Asking about both enables us to tell whether voters approach tax and welfare ‘consistently’ and to see whether, in Australia's case, there is a preference for Australia's targeting model. We reach three conclusions: (1) voters hold diverse preferences about welfare and taxes, but the targeted model has a relatively strong voter base; (2) voters hold ‘pro‐welfare’ orientations, choosing poverty reduction and expanding public services over both paternalism and cutting welfare, and (3) multivariate analysis indicates a level of consistency in welfare and tax orientations among voters.     

Risk preferences of Australian academics: where retirement funds are invested tells the story

Risk preferences of Australian academics are elicited by analyzing the aggregate distribution of their retirement funds (superannuation) across available investment options. Not more than 10 % of retirement funds are invested as if their owners maximize expected utility under the assumption of constant relative risk aversion with an empirically plausible level of risk aversion. An implausibly high level of risk aversion is required to rationalize any investment into bonds when stocks are available. Not more than 36.54 % of all investments can be rationalized by a model of loss averse preferences. Moreover, the levels of loss aversion typically reported in the experimental studies imply overinvestment in bonds, which is not observed in the data. Up to 67.18 % of all investments can be rationalized by rank-dependent utility or Yaari’s (Econometrica 55:95–115 1987) dual model with empirically plausible parameters. A median Australian academic behaves as if maximizing rank-dependent utility with parameter \(\gamma \in [0.76, 0.79]\) in a Tversky and Kahneman (J Risk Uncertain 5:297–323 1992) probability weighting function.     

‘MONEY POURING OUT OF ITS EARS’: ON THE TAXATION OF REALLY PROFITABLE NON-PROFIT ORGANISATIONS IN AUSTRALIA

Under current law Australia appears to be a tax haven for certain non-governmental institutions. Millions of ordinary business income may go untaxed and the deductibility for donations is unlimited – both are very generous tax measures in an international context. The basic problems of most Australian non-profit organisations are not taxation; it is their non-profit status and lack of funds. Anybody interested in the non-governmental sector should be willing to face the question: What is an equitable tax treatment? The short-term tactic of ducking the question may not be the best or most beneficial long-term strategy.     

WHO'S NOT PAYING THEIR FAIR SHARE: PUBLIC PERCEPTIONS OF THE AUSTRALIAN TAX SYSTEM

Data from the Community Hopes, Fears and Actions Survey are used to examine how pervasive the view is that the more privileged in society are failing to pay their fair share of tax, to understand the beliefs that underpin such perceptions, and the reforms that are needed to open dialogue with the Australian public about the issue. Support is found for five hypotheses. Economic self‐interest provides a partial explanation for perceptions of vertical inequity, but more important are disillusionment with the Australian democracy and perceptions of insufficient procedural justice from the tax office. Values about how Australian society should develop also play a part. Those looking for a more equal, caring and compassionate Australia perceive there to be a high level of vertical inequity. Such perceptions are not shared by those aspiring to an Australia that pursues competitive advantage either economically or politically. Tax authorities are brokers for social order and harmony in democracies. They can not determine the policies that are supposed to deliver these goals, nor the rules by which individuals are expected to contribute to the government coffers. But they carry responsibility for making it all happen — collecting taxes and providing government with revenue. As such, their integrity is pivotal to smooth democratic functioning. Integrity for a tax authority involves having purposeful and sound goals, appropriate and ethical procedures for pursuing such goals, and processes allowing reflection and evolution of their operation in response to the democratic will (Braithwaite 2003). This paper is a contribution to the process of reflection on how the tax system is working for its citizens. Its purpose is to investigate the extent to which the Australian community believes that their tax authority is pursuing one of its goals, collecting revenue, in a sound and purposeful way. Three questions are addressed: (a) Are different social groups in our society paying their fair share of tax? (b) What are the experiences and aspirations lying behind public perceptions that some groups do not pay their fair share? and (c) Do perceptions of fairness shape the direction in which Australians want to see tax reform progress?     

After the tax revolt: Why Medicare matters more to middle Australia than lower taxes

The Australian Survey of Social Attitudes 2003 gives new insights into the public's increasing preference for more social spending and their willingness to pay more taxes to fund services. This paper profiles the new electorate and discusses factors driving this trend in public opinion. Multivariate analysis allows us to identify the key demographic, political and policy variables that predict support for spending. All the usual factors matter: being older and more educated, and identifying as Labor, Green or Democrat all predict support for higher spending. But we find that policy perceptions matter as well: believing that health and Medicare and/or public education have declined in the past two years brings major support for increased spending. We also find that the Australian public supports modest tax increases to fund spending on health and education and that the Australian electorate is more open minded about tax rises than conventional wisdom holds. Our main conclusions are that support for social spending over reduced taxes has increased over the past two decades, and especially after the election of the Howard Government, and that dissatisfaction with health and Medicare, and public education, are reshaping the fiscal preferences of the Australian electorate.     

Till Death Us Do Part? A Critical Analysis of Obligation and Choice for Spousal Caregivers

Research demonstrates a significant number of carers identify obligation or lack of other alternatives as the reasons they undertake informal care. By utilizing critical discourse analysis, this research explores choice for informal caregivers in contemporary Australian social policy. Analysis demonstrates increasing shifts in policy toward choice in consumer-directed care, a feature absent for those who provide care. Familial care is a central pillar of Australian social policy, as it is in many liberal and conservative welfare regimes. Analysis reveals that these core social policies are fundamentally incongruent, with significant implications for individuals and social work practice.     

Social Security in Australia and New Zealand: Means-tested or Just Mean?

The social security systems of Australia and New Zealand have traditionally rejected social insurance in favour of a means-tested categorical safety net approach that provides considerable scope for targeting. The experience of both countries provides many examples of how targeting can be used to constrain social security spending, and these have attracted interest in other countries keen to contain the growth in their social security budgets. However, although there are many similarities between the two systems, there are also many differences and these have become greater as targeting has gathered momentum over the last two decades. This paper analyses how targeting has been used in each country as a way of illustrating the different approaches adopted. Attention is focused on how the retirement income systems of the two countries illustrate an increasing policy divergence, with the planned Australian transition to a "multi-pillar" approach in contrast to the constant (and continuing) reform of New Zealand superannuation. Household data on the pattern of receipt of transfer incomes and their impact on the distribution of income are then used to explore the impact of targeting since the early 1980s. This analysis suggests that, in practice, targeting has had a far smaller impact on income inequality in both countries than is often claimed.     

Just deserts? ‘Privatisation’ and the history of deservingness in Australia's retirement incomes system

Over the last few decades, changes in Australia's retirement incomes policy, including the introduction of compulsory superannuation, have seen governments encourage individuals to provide for their own old age from private means. This process has been described as ‘privatisation’ of retirement incomes. However, beyond the ‘privatisation’ thesis, there has been little critical examination of what these changes have meant for the nature and relative importance of the different principles underpinning Australia's retirement incomes system. This paper aims to provide such an examination. Drawing on the principles of deservingness and need, the paper provides an historical analysis of the development of Australia's retirement incomes system, tracing how these two principles underpinned the first age pension and subsequently contributed to the emergence of compulsory superannuation. This approach provides a deeper understanding of how contemporary policy changes have altered the structure of Australia's retirement incomes system, arguing that there are important historical continuities as well as changes. It argues that the phrase ‘state‐supported private saving’, rather than ‘privatisation’, captures the nature of this contemporary reform process.     

More than Just DNA – Tax,Welfare and the Family. An examination of the concept of family in the Tax Transfer system,with particular reference to family benefits

One of the core issues taken into account in tax transfer systems is the family circumstances of a particular recipient. Family tax transfer payments may be delivered through either the tax or the welfare system. However, the fundamental requirement is that there is a family, maintaining children. The concept of what is a family is a social rather than a legal construct. While marriage and spouse have legal definitions, family structures evolve and change over time. In this paper I explore the concept of family as it is used in the Australian income tax and welfare legislation. I consider the impact of the legislative construct of family on the entitlements to tax credits, and whether the definition of family is appropriate to ensure that the benefits improve the equity of the taxation system, and properly reflect the structure of the contemporary family unit.     

Family Assistance and the Redistribution of Income

Assistance to families is commonly provided through cash family allowances and by giving tax concessions to families. Both approaches have long histories in Britain and Australia, but in spite of this they continue to operate in both countries in an inconsistent manner in which their redistributive effects are not clear. The British are planning to rationalize their system and it is appropriate that Australia should do so too. Two proposals for changing the Australian system of assistance to families are considered, and their redistributive effects on families of different size and with different levels of incomes are analysed.     

OECD国家家庭福利政策实践与启示

家庭福利政策作为OECD国家政策体系的有机组成部分,在稳定家庭功能、提高家庭福祉等方面发挥了重要作用。税收优惠是国外家庭福利供给的主要手段,美国近一半的家庭福利、日本近40%的家庭福利来自税收优惠。在经济体制深刻变革、社会结构深刻变动、利益格局深刻调整、思想观念深刻变化的形势下,我国传统家庭功能正在经受严重冲击,家庭互助、家庭照料、社会融合等婚姻家庭新问题不断凸显。文中系统梳理近20个OECD国家的家庭税收优惠措施,提出在我国工薪所得税中率先探索家庭税收优惠政策,提高家庭发展能力。     

税式支出对促进高新技术产业发展的实证分析

近年来,南京市高新技术产业发展呈现出总量扩张、税负下降、竞争力不强的状况。选取南京市高新技术产业七大行业的产值占地区工业总产值比重指标、流转税税负、所得税税负,建立面板数据模型分析,发现税式支出激励效应存在结构性差异,流转税的激励效应大于所得税的激励效应。激励政策对航天航空制造业、医药制造业、专用科学仪器设备制造业的效果不显著;对于另外四个行业,激励效应也存在结构差异。因此,应采取差异化的税式支出激励政策,改变当前以所得税为主要激励税种的现状,转变成以流转税和所得税为双主体的激励方式。     

Shifting taxes away from labour enhances equity and fiscal efficiency

This paper analyzes the effects of a hypothetical tax reform in Italy, which makes current tax credits more generous and refundable, shifting the tax burden from labour to property. Our methodology contains novel features of great relevance for policy analysis: first, a structural model of labour supply of both employees and self-employed; second, a labour market equilibrium model that encompasses demand side constraints; last, detailed tax system simulation under fiscal neutrality. The empirical findings provide guidance for policy makers’ actions to enhance equity and efficiency of tax system and confirm the relevance of the methodological approach.     

资源税改革：以煤炭为例的资源经济学分析

以煤炭为例,利用修正的E1 Serafy使用者成本法估计煤炭资源耗减成本可以证明,中国煤炭资源的开发利用存在使用者成本,并随着煤炭产量的大幅增加而迅速提高,需要通过征收从价资源税来反映煤炭资源的真实成本。计算结果还表明,1992--2009年间,中国基于使用者成本的从价煤炭资源税理论税率在2％-14％之间波动。进一步通过动态可计算一般均衡（CGE）模型分析从价煤炭资源税对宏观经济的影响,可以发现,对煤炭资源征收5％-12％的从价资源税,宏观经济成本将在可承受范围之内,而且能够反映煤炭作为稀缺性资源的耗减成本。因此,中国的资源税改革具有可持续发展的意义。