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Preliminaries

Date

© Commonwealth of Australia 2001

ISBN 0 642 74085 2

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Contents

Chapter 1 Introduction 1

        1.1 Background 1

        1.2 What is a tax expenditure? 1

        1.3 Purpose of this Statement 2

        1.4 Interpretation of tax expenditure estimates 3

        1.5 Structure of this Statement 4

Chapter 2 Overview of tax expenditure aggregates 5

        2.1 Introduction 5

        2.2 Trends in tax expenditures 5

        2.3 Tax expenditures by function 6

        2.4 Comparison with direct expenditure 8

        2.5 Tax expenditures by taxpayer affected 10

Chapter 3 Methodology 13

        3.1 Defining benchmarks 13

        3.2 General features of the taxation benchmark 14

        3.3 The personal income tax benchmark 15

        3.4 The retirement benefits benchmark 16

        3.5 The fringe benefits tax benchmark 16

        3.6 The business tax benchmark 17

        3.7 The excise duty benchmark 19

Chapter 4 Changes from 2000 TES 21

        4.1 Introduction 21

        4.2 New tax expenditures 21

        4.3 Modified tax expenditures 22

        4.4 Deleted tax expenditures 24

Chapter 5 Tax expenditure estimates 25

        5.1 Introduction 25

        5.2 Accrual estimates 25

Appendix A Description of tax expenditures 47

        A Personal income tax benchmark 47

        B Retirement benefits benchmark 60

        C Fringe benefits tax benchmark 62

        D Business tax benchmark 73

        E Excise duty benchmark 98

Appendix B Superannuation benefits 101

        B.1 Scope 101

        B.2 Interpretation 102

        B.3 Estimates 102

Index 105

List of tables

Table 2.1: Total measured tax expenditures 5

Table 2.2: Aggregate tax expenditures by function 7

Table 2.3: Aggregate tax expenditures and direct expenditures
by function in 2000-01 9

Table 2.4: Aggregate tax expenditures by taxpayer affected 11

Table 5.1: Tax expenditures reference table 28

Table B1: Estimated tax expenditures through superannuation tax
concessions, 1997-98 to 2004-05 104

 

     
 

Acronyms

ABARE

Australian Bureau of Agricultural and Resource Economics

ADF

Australian Defence Force or Approved Deposit Fund

CDEP

Community Development Employment Project

CFC

Controlled foreign companies

CGT

Capital gains tax

CRAFT

Commonwealth Rebate for Apprentice Full-time Training

DEP

Dairy Exit Program

DTA

Double taxation agreement

DWT

Dividend withholding tax

ETM

Economic transaction method

ETP

Eligible termination payment

FBT

Fringe benefits tax

FIF

Foreign investment fund

FBTAA86

Fringe Benefits Tax Assessment Act 1986

FTB

Family Tax Benefit

FTCS

Foreign tax credit system

GDP

Gross domestic product

GST

Goods and services tax

IED

Income equalisation deposits

ITAA36

Income Tax Assessment Act 1936

ITAA97

Income Tax Assessment Act 1997

ITLAA00

Indirect Tax Legislation Amendment Act 2000

IWT

Interest withholding tax

LICs

Listed investment companies

LPG

Liquefied petroleum gas

MYEFO

Mid-Year Economic and Fiscal Outlook

na

Not available

nec

not elsewhere classified

OECD

Organisation for Economic Co-operation and Development

PBI

Public benevolent institution

PDF

Pooled development fund

RHQ

Regional headquarters

PNG

Papua New Guinea

R&D

Research and development

SHS

Schanz-Haig-Simons

STS

Simplified Tax System

TES

Tax Expenditures Statement

TLM

Tax liability method

UPP

Undeducted purchase price

WET

Wine equalisation tax

Y2K

Year 2000 (compliance)