Tax and Transfer Policy Institute

12/10/2026

Australia’s new capital gains tax system aims to account for inflation, but could its treatment of capital losses lead to higher tax burdens? James Giesecke and Jason Nassios examine how the asymmetric recognition of gains and losses affects investors, particularly those holding riskier assets over longer periods, and consider alternative approaches to CGT reform.

Read more here 👇

How Australia's new capital gains tax indexation system could increase tax burdens by failing to recognise real losses, particularly for riskier assets.

07/10/2026

How does Australia distribute GST among the states, and what role do resource exports play in the broader fiscal equation?

In a new article for Austaxpolicy, David Higginbottom unpacks the findings of the Productivity Commission’s recent interim report on the 2018 GST reforms. The piece provides a detailed look at the mechanics of horizontal fiscal equalisation, how the WA GST floor operates in practice, and why the treatment of input-tax credits for extractive industries complicates the national revenue picture.

For an informative breakdown of the current GST distribution model and a policy proposal for greater transparency in resource taxation, read the full article here:

The only reason Western Australia’s GST deal continues to survive is that few Australians understand how bad it is.

04/10/2026

How does GDP overlook the wellbeing of the next generation?

When governments debate economic progress or inequality they typically rely on evidence derived from GDP and taxation statistics used to measure the distribution of income and wealth. Yet one of the most economically significant investments in the next generation remains almost entirely invisible in those measures: the nutrition and care provided through breastfeeding.

Current national accounting rules record spending on commercial infant formula as part of economic production and growth. However, when mothers produce food through breastfeeding, neither the food itself nor much of the associated care work appears in conventional economic statistics. Given research has shown that breastfeeding contributes to improved health, educational attainment and later-life economic outcomes, the result is a paradox: a shift from breastfeeding to commercial milk formula increases measured GDP even though it may leave child welfare potentially worse off.

In a new Austaxpolicy article, Dr Julie Patricia Smith argues that this creates a blind spot in how we understand inequality, human capital formation, and economic well-being. The paper explores how integrating the ~35.6 billion litres of human milk produced annually by breastfeeding mothers into the Food and Agricultural Organization’s (FAO) Food Balance Sheets can be used to construct distributional accounts that measure access to human milk across income and wealth groups.

Although an unusual topic for economists, the broader policy implications are profound: when unpaid household production is invisible, investments that support it can be systematically undervalued, affecting areas ranging from parental leave and workplace policy to preventive health investments and gender equality initiatives.

To find out how to 'make the invisible visible', read more at:
https://www.austaxpolicy.com/beyond-gdp-why-measuring-child-health-equity-should-matter-to-economic-policy/

When governments debate economic progress, inequality, or fiscal sustainability, they typically rely on evidence derived from national accounts, GDP, and taxation statistics used to measure… Read More ›

01/10/2026

What happens when two people earn the same income but face very different tax bills? In their new research, Pierre Bachas, Christopher Hoy, Anders Jensen and Mahvish Shaukat examine tax fairness between employees and the self-employed across 29 lower-income countries. The article explores why these differences arise, how they shape perceptions of fairness, and what they mean for the design of fairer tax systems. Read more here 👇

New evidence from 29 lower-income countries examines tax fairness between employees and the self-employed, and how unequal tax burdens shape views on tax reform.

23/09/2026

It’s often argued that Canada's income tax system is overly complex. But is it really causing more "tax pain" for the average filer?

In a new article for Austaxpolicy, François Vaillancourt (Université de Montréal & CIRANO) unpacks an interesting divergence:

The federal income tax code's complexity has increased five-fold over the past 50 years.

However, the time and financial costs for individuals to file their taxes have actually plummeted since 1985.

The widespread use of tax software and downloadable tax slips has completely changed the compliance landscape.

Because the overall "tax pain" index has remained low, political parties have largely ignored calls from tax professionals for system simplification. Could the same trend be true for Australia?

Read the full analysis here:

In this article, Francois Vaillancourt examines the divergence between tax complexity and compliance costs in Canada

09/09/2026

How user-friendly is South Africa’s VAT Act?

A new empirical study by Muneer Hassan finds that its current structure makes ordinary VAT transactions unnecessarily difficult to navigate.

The problem is not the complexity inherent in VAT itself. Rather, difficulty is caused by “legal complexity" — the way legislation is structured and organised.

For example, registration only comes up in section 23, but the underlying basis for determining who must register for VAT is situated much earlier, in section 15. As a result, various and consecutive sections read as if they’d been “hastily assembled”.

Hassan proposes reorganising the Act around the lifecycle of a VAT vendor: from registration, to charging output tax, claiming input tax, submitting returns and ultimately deregistering.

However, rewriting a whole Act from scratch is a major undertaking, requiring new wording and new policy trade-offs, buy-in from multiple stakeholders and ratification in the legislature as well as updated practices.

Hassan thus suggests a descriptive framework that simply regroups and reorders the existing content.

Read more:

Imagine you’re a South African business importing “electronic services” such as cloud software, an online subscription, or a digital download from overseas. Figuring out your… Read More ›

07/09/2026

How far does Australia’s GST extend into its coastal seas?

Knowledge of the precise geographical limits of Australia’s primary indirect tax laws – being GST and transfer duties – is of critical importance to the many taxpayers who carry on activities in the country’s coastal seas.

However, a 2015 change to the GST Act appears to have unintentionally excluded the outer 9 nautical miles of Australia’s territorial sea from GST by replacing "Australia" with “indirect tax zone”.

In making this change in terminology, it appears not to have been the intention of the Federal Parliament to alter in any way the legal reach of the GST. However, the new definition did in fact change the geographical reach of the GST, and in a material way.

In their new piece on Austaxpolicy, Aleks Zochowski and Peter McMahon argue that amending legislation, made retrospective to 1 July 2015, ought to be introduced as soon as possible to rectify the position, and to dispel any uncertainty as to the proper GST treatment of activities carried out in Australia’s coastal seas.

Otherwise, the GST may be at risk of missing its intended mark – that of taxing supplies made in Australia, and within the full breath of its surrounding 12 nautical mile territorial sea.

Read more: https://www.austaxpolicy.com/the-operation-of-gst-and-transfer-duty-laws-in-australias-coastal-seas/

Australia’s GST and transfer duty laws do not apply across the full territorial sea. This article examines the subsequent legal implications.

05/09/2026

Congratulations to Professor Robert Breunig on his appointment as the 2027 Visiting Professor of Australian Studies at Seoul National University’s Graduate School of International Studies!

Announced by the Minister for Foreign Affairs, Senator the Hon Penny Wong, at the AKBC-KABC Joint Meeting in Adelaide, the appointment will strengthen Australia-ROK academic and cultural links through teaching, research and public engagement.

The initiative is supported by the Australia-Korea Foundation, Woodside Energy and Seoul National University.

Links to further information and media release are available in the comments.

04/09/2026

Behavioural nudges are designed to influence behaviour without removing choice or substantially changing economic incentives.

But what happens to taxpayer rights when nudging becomes a routine part of tax administration?

In their latest Austaxpolicy piece, John Bevacqua and Amna Shah argue that evaluating nudges only by asking whether they improve compliance or increase revenue is no longer enough. As nudges become increasingly personalised, automated and powered by artificial intelligence, tax administrations also need to consider their effects on taxpayer autonomy, fairness, transparency and accountability.

Consider a message telling a taxpayer that their deduction appears unusually high compared with similar taxpayers. The taxpayer may have a perfectly legitimate basis for claiming it. But faced with an official prompt from the tax authority, some taxpayers may simply reduce the claim rather than investigate whether they are legally entitled to it.

This creates a risk of overcompliance. Taxpayers who are particularly responsive to authority, social pressure or threatening language may pay more tax than the law actually requires.

None of this means tax administrations should abandon nudging. Used carefully, nudges can simplify compliance, prevent mistakes and help taxpayers meet their obligations. The question is no longer whether tax administrations should use behavioural insights. They already do.

The more important question is how these tools should be governed as they become increasingly embedded in digital tax administration.

John and Amna's research proposes several principles that could help tax administrations preserve the benefits of behavioural interventions while reducing their risks. Read more:

What happens to taxpayer rights when nudging becomes a routine part of tax administration? Behavioural nudges are designed to influence behaviour without removing choice or substantially changing economic incentives. In tax administration, they can take many forms, from reminders and social norm mes...

02/09/2026

Did you know the Australian government spends $7.6 billion a year subsidising private health insurance?

In a new article on Austaxpolicy, Kevin Staub and Yuting Zhang from the University of Melbourne dive into a decade of tax data to see what actually drives people to buy cover: the premium subsidy (the carrot) or the Medicare Levy tax penalty (the stick).

Read the full breakdown on what this means for the future of health insurance and tax design:

The Australian government uses both a carrot and a stick to encourage people to buy private health insurance.