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Tax Expenditure Analysis – Origins, Debates And Future Prospects

Treasury Working Paper 2017-031

Release date: 24 March 2017

Paul Palisi2 | Working Paper

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This paper outlines the origins of tax expenditure analysis in the 1960s, the key debates at that time and over subsequent decades, and the current state of tax expenditure analysis. The paper suggests that the pros and cons of tax expenditure analysis were comprehensively worked through within a short time of the concept being proposed. These debates have since been rehashed periodically, with little of real or lasting value being added.  While there is broad agreement that some form of reporting of tax expenditures is needed, prospects for future meaningful development of the underlying tax expenditures concept appear limited.


  1. The views expressed in this paper are those of the author and do not necessarily reflect those of The Australian Treasury or the Australian Government. I thank Maryanne Mrakovcic, Matt Brine, Robert Ewing and Richard Maher for their valuable feedback on earlier drafts of the paper.
  2. Structural Reform Group, The Treasury, Langton Crescent, Parkes ACT 2600, Australia. Correspondence: paul.palisi@treasury.gov.au.

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