ECONOMIC AND SOCIAL CONSEQUENCES OF CHANGING TAXATION ARRANGEMENTS TO WORKING HOLIDAY MAKERS
By Adam Steen and Victoria Peel
The Australian Government’s Working Holiday Maker program currently enables persons 18 to 30 years of age from selected countries to visit Australia for a working holiday. Empirical evidence suggests these visitors make a significant positive economic contribution to the economy. Recent changes in government policy involving Working Holiday Maker visa arrangements, including changes to taxation of Working Holiday Maker earnings, have the potential to change the attractiveness of Australia as a destination of these tourists. This paper addresses these changes and explores the possible implications for Working Holiday Makers, employers and the economy in general.
CAREFUL WHAT YOU WISH FOR: RATE-CAPPING IN VICTORIAN LOCAL GOVERNMENT
By Joseph Drew and Brian Dollery
The new Victorian Government won the 2014 election on a platform to inter alia introduce a cap on council rates in all Victorian councils. This means that a rate-cap will be introduced beginning with the 2016/17 financial year, with future rises in rates pegged at the Consumer Price Index (CPI) after this date. This paper provides a comparative empirical analysis of New South Wales local government – the only Australian local government system to operate a rate-pegging regime – and Victorian local government with respect to rate-capping. We find evidence to support the proposition that rate-capping has deleterious effects on municipal revenue effort, equity, debt and infrastructure maintenance. Moreover, our findings do not provide empirical evidence in support of the claim that rate-capping increases municipal efficiency. The paper concludes by considering various alternative public policy instruments to rate-capping.
RECONCILING THE OVERLAP OF CHARGING PROVISIONS IN REGARD TO NON-CASH BENEFITS FROM EMPLOYMENT, PERONAL EXERTION AND BUSINESS
By Dale Boccabella
Australia’s income tax regime contains a number of charging provisions that may apply to non-cash proceeds of personal exertion and business. There is overlap in the operation of these provisions, which in turn requires priority of application rules and anti-double taxation rules. The fact that one of these charging provisions (i.e. fringe benefits tax) is in a separate piece of legislation adds complexity. Further difficulty is added because the various charging provisions contain different valuation rules. This article highlights the problematic areas and anomalies concerning charging provisions as they apply to non-cash benefits, with the aim of attaining some clarity to the operation of the rules. The approach is to use a tabular summary (table) to identify the relevant charging provision (e.g. ss 6-5 and 15-2 of the Income Tax Assessment Act 1997(‘ITAA 1997’)) that applies in regard to various economic activities (e.g. personal exertion that is not employment), and to reconcile the charging provisions where overlap exists. For completeness, the table also identifies circumstances where no charging provision applies to common non-cash benefits obtained by taxpayers (e.g. mere gifts).