No CrossRef data available.
Article contents
Removing Poverty Traps: Taxation and Welfare Reform in Australia
Published online by Cambridge University Press: 01 January 2023
Abstract
Core share and HTML view are not available for this content. However, as you have access to this content, a full PDF is available via the ‘Save PDF’ action button.
This article uses data on the interactions of income taxation and state welfare transfers on effective marginal tax rates (EMTRs) in Australia to argue policy reforms for removing poverty traps created by high EMTRs. This highlights the need for state welfare and income taxation reforms to target those elements of income taxation and social welfare interaction that are most significant for high EMTRs and for high EMTRs extending across wide incomes ranges. Proposed welfare changes involve simultaneous reductions in base-level state welfare transfer payments, along with eligibility for supplementary transfer payments for able persons that are proportional to market labour activity. Proposed taxation changes include removal of distinctions between taxable and tax-exempt state welfare transfers and a gradually-progressive revised taxation scale.
- Type
- Contemporary Issues
- Information
- Copyright
- Copyright © The Author(s) 1992
Footnotes
**
Views expressed are entirely personal, and should not be attributed to the employers of the respective authors -the Department of Finance, Canberra, and the University of New South Wales at the Australian Defence Force Academy, Canberra. The paper has benefitted from comments from referees and editors of this journal.
References
Agrawal, N., Meagher, G. A., Parsell, B. F. (1990) “Analysing Options for Fiscal Reform in the Presence of Involuntary Unemployment”, in Head, , Krever, (eds), pp. 295–320.Google Scholar
Australia (1988) Budget Statements 1988–89, Budget Paper No. 1, Australian Government Publishing Service, Canberra.Google Scholar
Australia (1989) Budget Statements 1989–90, Budget Paper No. 1, Australian Government Publishing Service, Canberra.Google Scholar
Australia (1990), Economic Statement, February 1990, Authorised by the Treasurer, Parliament House, Canberra.Google Scholar
Australia (1992), Budget Statements 1992–93, Budget Paper No. 1, Australian Government Publishing Service, Canberra.Google Scholar
Australian Bureau of Statistics (ABS) Distribution and Composition of Employee Earnings and Hours — Australia (preliminary), cat. no. 6305.0, May 1990.Google Scholar
Babbage, S. (1984) “The Value to Pensioners of Fringe Benefits”, Social Security Journal. December, pp. 51–58.Google Scholar
Bascand, G. M., Trengrove, C. D. (1990) “Analysis of Tax Reform Options”, in Head, J. G., Krever, R. (eds), pp. 169–200.Google Scholar
Cashel, M., McGavin, P. A. (1990) “The Interactions of Income Taxation and Welfare State Transfers on Effective Marginal Tax Rates in Australia”, Economics & Management Working Papers 1/1990, Australian Defence Force Academy, Canberra.Google Scholar
Department of Social Security (DSS) (1990), A Guide to Social Security Payments, Department of Social Security, Canberra.Google Scholar
Edwards, M. (1985) Income Tests, Work Incentives and Effective Marginal Tax Rates, Working Paper No. 79, National Institute of Labour Studies, The Flinders University of South Australia, Bedford Park.Google Scholar
Economic Planning Advisory Council (EPAC) (1988) Income Support Policies, Taxation and Incentives, Australian Government Publishing Service, Canberra.Google Scholar
Fightback! (see Liberal and National Parties of Australia).Google Scholar
Freebairn, J., Porter, M., Walsh, C., (eds.) (1988), Spending and Taxing II: Taking Stock, Allen & Unwin, Sydney.Google Scholar
Gallagher, P., Gunasekera, M., McDiarmid, A. (1992) “Poverty Traps: Issues for Review — A Summary of Stage 1 of the DSS Review of Poverty Traps”, Social Security Journal, Autumn:28–41.Google Scholar
Gallagher, P., Ryan, S (1992), “Effective Marginal Tax Rates of Social Security Recipients”, paper for the Third National Social Research Conference, Department of Social Security, Canberra, June.Google Scholar
Head, J. G. (1990) “Australian Tax Reform: Which Way Ahead?”, The Economic and Labour Relations Review 1 (2):81–107.Google Scholar
Head, J. G., Krever, R., (eds) (1990) Flattening the Tax Rate Scale: Alternative Scenarios and Methodologies, Longman Professional, Melbourne.Google Scholar
Keating, P. (1990) 1989–90 Pensioner and Beneficiary Rebate Levels, Press Release No. 34, The Treasury, Canberra.Google Scholar
Liberal and National Parties of Australia (1991), Fightback! Taxation and Expenditure Reforms for Jobs and Growth, Hewson, J., Fischer, T., Parliament House, Canberra.Google Scholar
McGavin, P. A. (1992) Wages and Welfare: the failing symbiosis, Centre for Independent Studies, St Leonards, Sydney.Google Scholar
Organisation for Economic Co-operation and Development (OECD) (1992), OECD Economic Outlook, 51, June.Google Scholar
Piggott, J. (1990) “Linear Taxes, Public Goods, and Balanced Budget Incidence — Some Numerical Simulations”, in Head, , Krever, (eds), pp. 321–336.Google Scholar
Podger, A., Raymond, J., Jackson, W. (1980a) The Relationship between the Australian Social Security System and Personal Income Taxation Systems: A Practical Examination, Research Paper No. 9, Department of Social Security, Canberra.Google Scholar
Podger, A., Raymond, J., Jackson, W. (1980b) The Finance of Social Security: Some Implications of the Interaction between Social Security and Personal Income Tax, Research Paper No. 11, Department of Social Security, Canberra.Google Scholar
Saunders, P., Bradbury, B., Whiteford, P. (1989) “Unemployment Benefit Replacement Rates”, Australian Bulletin of Labour. 15(3), pp. 223–244.Google Scholar
Social Security Review (SSR) (1988) Income Support for the Unemployed in Australia: Toward a More Active Policy, Issues Paper No. 4, Australian Government Publishing Service, Canberra.Google Scholar
Stephens, R. J. (1990) “Flattening the Tax Rate Scale in New Zealand”, in Head, , Krever, (eds) (1990), pp. 103–137.Google Scholar
You have
Access