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Tax Expenditures and Public Health Financing in Australia

Published online by Cambridge University Press:  01 January 2023

Julie Smith
Julie Smith*
Affiliation:
The Australia Institute, Canberra
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Abstract

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At various times in Australia’s recent history, the Commonwealth government has used the tax system to support its public health policy goals. Tax concessions to particular industries or groups of taxpayers cost the government the same as direct subsidies. However, the income distribution of these tax ‘carrots’ and ‘sticks’ has not previously been analysed. This study breaks new ground by examining how the benefits of tax concessions for health expenditures were distributed among taxpayer income groups in the four decades since 1960, and how this affects the progressivity of Australia’s system of funding health care. It is found that around half of the $2 billion tax subsidy for private health insurance accrues to the taxpayer group with the highest third of incomes.

Type
Meeting Report
Information
The Economic and Labour Relations Review , Volume 12 , Issue 2 , December 2001 , pp. 239 - 262
Copyright
Copyright © The Author(s) 2001

Footnotes

*

The historical data series used in this study was originally compiled in collaboration with Dr James Butler and funded by the Australian Tax Research Foundation. I am also grateful to Ian McAuley for helpful discussion and comments on drafts and data sources. Final responsibility for the paper rests with the author.

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