Tax Expenditures
Statement

2009

 Commonwealth of Australia 2010
ISBN 978-0-642-74573-6
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Contents
Highlights		vii
Chapter 1: Overview	1
1.1	Introduction	1
1.2	Coverage of this statement	2
1.3	Trends in tax expenditure estimates	3
1.4	Period covered by these estimates	11
Chapter 2: The tax expenditure framework	13
2.1	What is a tax expenditure?	13
2.2	Why report tax expenditures?	14
2.3	Approaches to measuring tax expenditures	16
2.4	Treasury’s approach to estimating tax expenditures	16
2.5	Interpreting the estimates of tax expenditures	19
2.6	Issues surrounding interpretation of tax expenditure estimates	19
2.7	Tax expenditure benchmarks	20
Chapter 3: Tax expenditures	23
3.1	Introduction	23
3.2	Notes on the estimates	23
3.3	Benchmarks used in the TES estimates	23
3.4	Summary of tax expenditures by benchmark	24
3.5	Guide to tax expenditure descriptions	27
3.6	Income tax benchmark	31
3.7	Consumption tax benchmark	168
3.8	Externalities benchmark	192
Chapter 4: Revenue gain estimates of tax expenditures	197
4.1	Introduction	197
4.2	Standard assumptions for the revenue gain estimates	198
4.3	Guide to revenue gain estimate descriptions	199
4.4	Tax expenditures based on revenue gain approach	200

Appendix A: Tax expenditure benchmarks and methodologies	203
A.1	Benchmarks	203
A.2	Expenditures related to taxes on income	204
A.3	Taxes on consumption	211
A.4	Measures to correct externalities	216
A.5	Modelling tax expenditures	218
A.6	Notes on the methodlogy used to estimate certain tax expenditures	220
Appendix B: Changes to tax expenditures in 2009	223
B.1	New tax expenditures	223
B.2	Modified tax expenditures	226
B.3	Deleted tax expenditures	230
Appendix C: Alternative estimates for owner‑occupied housing	233
Appendix D: Aggregated superannuation tax expenditure	239
Glossary		241
Index		242

List of tables
Table 1.1:	Total measured tax expenditures	4
Table 1.2:	Measured tax expenditures by benchmark	5
Table 1.3:	Large measured tax expenditures in 2009‑10	7
Table 1.4:	Aggregate tax expenditures by function	9
Table 1.5:	Aggregate tax expenditures and direct expenditures by function in 2008‑09	11
Table 3.1:	Reliability of quantified tax expenditures	31
Table B.1:	New tax expenditures	223
Table B.2:	Modified tax expenditures	226
Table B.3:	Deleted tax expenditures	230
Table C1:	Capital gains tax main residence exemption with imputed rent and full deductibility	236
Table C2:	Capital gains tax main residence exemption with no imputed rent or deductibility	236
Table C3:	Capital gains tax main residence exemption with no imputed rent and partial deductibility	237
Table D1:	Aggregated tax expenditures for funded superannuation	240