Two timely reviews of Australia’s transfer and tax systems were commissioned by the incoming government in 2008, although the GST, tax exemption of superannuation payments to people aged over 60, and pre-announced personal income tax cuts were placed outside the scope of inquiry. Most of the recommendations of the Harmer Pension Review have been implemented, but most of the recommendations of the Henry Tax Review have not. The Henry recommendations provided for enhanced equity and efficiency through a broader and simplified base, concentrating revenue raising on personal and business income, private consumption, and economic rents from natural resources and land. They provide an integrated blueprint for ongoing debate over tax reform.

It has long been accepted that the adequacy of payments is a key objective of any social security system, where adequacy is defined as the ability of a payment to support a basic acceptable standard of living that is consistent with prevailing community standards. The 2009 Harmer Pension Review directed attention to the adequacy of the pension, an issue that has not been systematically examined in Australia for several decades. This article reviews alternative definitions of adequacy and shows that its basic features have been consistently recognised in official reports conducted over a long period. The deprivation approach is then described and shown to produce estimates that have a direct bearing on this conception of income adequacy. Using the results from two recent surveys, conducted in 2006 and 2010, the article compares levels of deprivation among groups defined on the basis of their principal source of income, including those dependent on an Age Pension and several other forms of social security payment. The results indicate that the adequacy of the Age Pension in 2006 was above that of payments awarded on the basis of disability, unemployment or sole parenthood, and also that the pension increase awarded following the Pension Review reduced deprivation among those who received it. However, the increase was not well targeted to those groups who required further assistance, as indicated by the levels of deprivation they were facing. Further application of the deprivation approach would provide new insights into the nature and extent of existing income inadequacies.

The Harmer–Henry pension and tax review resulted in an increase in the common value of the single rate of Age Pension and Disability Support Pension from 25 per cent to 28 per cent of male total average weekly earnings. It also recommended a Resource Super Profits Tax that would have initially taxed mining ‘rents' at 36 per cent, on top of the pre-existing 30 per cent federal tax on profits. These recommendations represent two sides of the same coin: higher federal spending alongside higher federal taxes. The pension rise is likely to reduce participation in the labour force. The proposed tax rise would discourage mining activity as miners considered their options to delay or abandon projects. There is a lot to like at the level of detail in the Harmer–Henry package, but future efforts to reform our tax-transfer system should focus on promoting saving and investment, including investment in human capital.

Traditionally, older people have been the key targets of Australia’s targeted welfare state. Flat rate pensions and widespread home ownership have ensured relative equality in older life. However, in response to perceived fiscal pressures generated by population ageing, Australia has increasingly shifted its policy settings, encouraging private savings over public risk pooling. Private savings are increasingly supported by public subsidy through tax policy. This has led to overlapping policy priorities, as public subsidies are used both as incentives to promote savings and as social policy instruments to promote adequate living standards in retirement. This conflict is evident in recent policy reviews of taxation, public spending and pension policy. This article explores the development of this conflict and how it manifests in proposals for reform. We argue that the conflation of welfare and taxation goals increasingly creates a dual welfare state that promotes private provision at the expense of both equity and efficiency. We suggest that more explicit identification of the roles of tax policy, and the welfare implications of tax changes, would help to improve policy design.

This article evaluates the Australian retirement system using a framework of justice. Justice (alternatively, equity or fairness) is taken as requiring a full consideration of the criteria of needs, equality, liberty and just deserts, as well as matters of efficiency. Inequity occurs when the interests of weaker stakeholders are given inadequate consideration. Applying these criteria suggests that the Australian retirement system intrudes on the liberty of some groups of stakeholders inconsistently and inappropriately in mandating contributions at younger ages particularly, and by the imposition of unnecessarily bureaucratic means tests. It also fails to provide for the incapacitated older aged.

This article argues the case for changes to the Goods and Services Tax (GST) as a key part of fundamental tax reform in Australia. A more comprehensive base would bring gains in efficiency and simplicity, with equity goals better met by the income transfer system. Revenue gains of a broader GST base and/or a higher rate could fund tax mix change packages to replace more distorting state stamp duties and fund lower income tax rates. The tax mix change packages would improve efficiency and simplicity, with no substantial changes to aggregate revenue or to equity.

This article focuses on the role of unionised members of parliament. While unions have a direct effect on the labour market via wage negotiations, they often also take part in political debates. In many countries, significant shares of the members of parliament are also members of a trade union. However, up to now little empirical evidence is available on the extent to which unionised members of parliament try to achieve union-specific goals and thereby influence the macroeconomic conditions of an economy. A recent study for Germany comes to the conclusion that union members in the Bundestag cannot be seen as the parliamentary arm of the trade unions. However, we present contradicting empirical results by showing that, in Germany at least, the degree of unionisation of parliamentary members has a negative impact on economic growth and increases inflation, while unemployment remains unaffected.

While the extent of employer non-compliance with minimum employment standards has yet to be decisively determined in Australia, there is evidence to suggest that it is both prevalent and persistent. This article draws on the scholarship emerging from the regulatory studies field to explore the underlying impulses and issues that may have led to this compliance gap. It considers how a more pluralistic and decentred understanding of regulation may improve compliance. This understanding is then applied to examine the various ways in which the federal labour inspectorate — the Fair Work Ombudsman — has sought to supplement and strengthen its existing compliance and enforcement mechanisms by harnessing or ‘enrolling’ non-state stakeholders, such as employer associations, trade unions, top-level firms and key individuals.

Young Canadian women engage in post-school study at a much higher rate than their Australian peers, with a large part of the difference in this rate attributable to differences in rates of participation in the non-university sector. This article uses data from the Australian Longitudinal Surveys of Australian Youth and the Canadian Youth in Transition Survey to generate a unique cross-country comparison of the characteristics of young women engaged in different types of post-school education. The results highlight important differences in the role played by academic ability and parental resources in the allocation of educational ‘slots' in the non-university sectors of the two countries. The results suggest that ‘second-tier’ post-school institutions could play a role in boosting rates of post-school education in Australia, with important consequences for the design of policy on this sector.