Effects of the Australian new tax system on government expenditure with and without behavioural changes
AuthorKalb, G. R.; Kew, H.; Scutella, R.
AffiliationEconomics and Commerce: Melbourne Institute of Applied Economic and Social Research
CitationsKalb, G. R. and Kew, H. and Scutella, R. (2003) Effects of the Australian new tax system on government expenditure with and without behavioural changes.
Access StatusOpen Access
ISSN 1328-4991 (Print) ISSN 1447-5863 (Online) ISBN 0734031211 MIWP No. 9/03
This paper uses the Melbourne Institute Tax and Transfer Simulator to examine the effects of the New Tax System introduced in Australia in July 2000. First the whole set of changes is studied and then some of its components are discussed separately. From the results it is clear that the change in income tax rates and thresholds had the largest effect, because it affected a large proportion of the population whereas the changes to the benefit system are only relevant to smaller groups. Families with children benefited on average most from the changes, firstly through the changes in income taxes and secondly through the changes in Family Payments. However, families with children were also more likely to experience a loss indicating a wider range of positive and negative outcomes for this group.
Keywordsincome tax rates; Melbourne Institute Tax and Transfer Simulator; expenditure; revenue; labour supply; inflation; Consumer Price Indices (CPI); Goods and Services Tax (GST); Australian tax system
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