Black fella land – white fella tax : changing the CGT implications of aboriginal/native title

The taxation of aboriginal/native title payments gives rise to a number of complex and difficult legal and policy issues. Reform measures announced on 13 February 1998 by the then Federal Treasurer and Attorney-General did not address the possible capital gains tax (‘CGT’) implications and even those relating to ordinary income under s 6-5 Income Tax Assessment Act 1997 (Cth) remain unimplemented. The much anticipated Report of the Native Title Payments Working group (6 February 2009), while primarily focusing on non-taxation issues, also recognises the need for taxation reform and makes some recommendations in regard to such. Most recently, on 18 May the Assistant Treasurer, Senator Nick Sherry, the Minister for Families, Housing, Community Services and Indigenous Affairs, Jenny Macklin, and the Attorney General, Robert McClelland, announced the commencement of a national consultation on the tax treatment of native title, including the interaction of native title, Indigenous economic development and the tax system. The Assistant Treasurer recognised the need for “greater clarity and increased certainty for native title holders on how the tax system and native title interact.” At the same time, they released a paper entitled Native Title, Indigenous Economic Development and Tax to guide the national consultation. The proposed measures considered in the paper, including exempting Native title payments and/or creating a new tax exempt Indigenous Community Fund, provide a welcome step towards reform in this area. This article is part of a broader research project that explores the CGT implications of aboriginal/native title. While these provisions impact on both Indigenous traditional owners and relevant payers, such as mining companies, the focus in the project is particularly on the CGT implications for the traditional owners. This first part of the project examines the status of aboriginal/native title and incidental/ ancillary rights as CGT assets. The broader research project will then build on this analysis in the context of relevant CGT events. As the preliminary findings in this article evidence the CGT implications of aboriginal/native title are far from certain. The application of CGT to aboriginal/native title raises more issues than it answers. The key reason is that the current law is entirely unsuitable to communally held inalienable aboriginal/native title. Nevertheless, it will be seen that it is arguable that aboriginal/native title and/or incidental rights are post-CGT assets and acts in relation to such could trigger a CGT event with tax implications for the traditional owners. It will be suggested that these current tax provisions provide a very pertinent example where the law operates as a blunt tool that does not appropriately promote justice and reconciliation. To tax Indigenous communities as a result of acts that extinguish or impair their traditional ownership is incongruous. A specific provision(s) should be included in the capital gains provisions to ensure any such payments are exempt from taxation. This is not only fair given the history of uncompensated extinguishment of aboriginal title Australia, but also promotes the ability of Indigenous communities to optimise the financial benefits stemming from aboriginal/native title agreements.

'Traffic-light' nutrition labelling and 'junk-food' tax : a modelled comparison of cost-effectiveness for obesity prevention

Introduction: Cost-effectiveness analyses are important tools in efforts to prioritise interventions for obesity prevention.
Modelling facilitates evaluation of multiple scenarios with varying assumptions. This study compares the cost-effectiveness of
conservative scenarios for two commonly proposed policy-based interventions: front-of-pack ‘traffic-light’ nutrition labelling
(traffic-light labelling) and a tax on unhealthy foods (‘junk-food’ tax).
Methods: For traffic-light labelling, estimates of changes in energy intake were based on an assumed 10% shift in consumption
towards healthier options in four food categories (breakfast cereals, pastries, sausages and preprepared meals) in 10% of adults. For the ‘junk-food’ tax, price elasticities were used to estimate a change in energy intake in response to a 10% price increase in seven food categories (including soft drinks, confectionery and snack foods). Changes in population weight and body mass index by sex were then estimated based on these changes in population energy intake, along with subsequent impacts on disability-adjusted life years (DALYs). Associated resource use was measured and costed using pathway analysis, based on a health sector perspective (with some industry costs included). Costs and health outcomes were discounted at 3%. The cost-effectiveness of each intervention was modelled for the 2003 Australian adult population.
Results: Both interventions resulted in reduced mean weight (traffic-light labelling: 1.3 kg (95% uncertainty interval (UI): 1.2;
1.4); ‘junk-food’ tax: 1.6 kg (95% UI: 1.5; 1.7)); and DALYs averted (traffic-light labelling: 45 100 (95% UI: 37 700; 60 100);
‘junk-food’ tax: 559 000 (95% UI: 459 500; 676 000)). Cost outlays were AUD81 million (95% UI: 44.7; 108.0) for traffic-light
labelling and AUD18 million (95% UI: 14.4; 21.6) for ‘junk-food’ tax. Cost-effectiveness analysis showed both interventions were
‘dominant’ (effective and cost-saving).
Conclusion: Policy-based population-wide interventions such as traffic-light nutrition labelling and taxes on unhealthy foods are
likely to offer excellent ‘value for money’ as obesity prevention measures.

Sustainable funding of health initiatives in Wonju, Republic of Korea via a tobacco consumption tax

Wonju is the first municipality in the Republic of Korea to fund the Healthy City project through municipal revenues from the local tobacco consumption tax. We investigated the process of the local tobacco consumption tax being approved as the main source of financing for the local Healthy City project. We also examined the sustainability and sufficiency of the funding by looking at the pricing policies instituted for cigarettes, smoking prevalence, cigarette consumption and revenues from local tobacco consumption as well as the budgetary allocations among programs in the city. The strong initiative of the mayor of Wonju was one of the factors that enabled the earmarking of the local tobacco consumption tax for the Healthy City Wonju project. He consulted academic counselors and persuaded the municipal government and the City Council to approve the bill. Despite the increasing price of cigarettes in Korea, adequate funding can be sustained to cover the short-term and mid-term programs in Wonju for at least 5 years of the mayor's term, because the smoking rate is persistently high. Analyzing the effects of strong leadership on the part of local authorities and the balance between revenues from the tobacco tax and the prevalence of smoking in the face of anti-smoking policies would be helpful for other countries and communities interested in developing sustainable Healthy Cities projects.

A factor-augmented VAR approach : the effect of a rise in the US personal income tax rate on the US and Canada

In this paper a factor-augmented vector autoregressive (FAVAR) model is estimated to characterize the dynamic effects of shocks in the personal income tax rate in the United States on United States and Canadian economies. The representation and the estimate of the FAVAR model is based on Stock and Watson (2005) and the shocks are recovered applying the identification scheme proposed by Bernanke et al. (2005); this method allows impulse response functions to be generated for all the variables in the dataset and provides a description of the domestic and international transmission mechanisms of United States movements in the personal income tax rate. A distinguishing feature of our model is the disaggregation of traded goods sector where imports and exports are disaggregated into 12 and 13 industries, respectively. This provides extra information on the domestic and international transmission mechanism across the two countries. The results show that the FAVAR approach generates a reasonable characterisation of the effects of United States movements in the US personal income tax rate on the United States economy and its transmission to the Canadian economy.

Tax planning, avoidance and evasion in Australia 1970-2010 : the regulatory responses and taxpayer compliance

This article examines tax avoidance strategies used by Australian taxpayers over the last four decades and analyses the regulatory responses by the government, noting a move away from the ‘command-and-control’ approach of the 1980s towards one of ‘responsive regulation’ and ‘meta risk management’. It is argued that despite inherent complexity issues, this regulatory approach has nevertheless contributed to the fostering of trust and a perception of fairness in the Australian tax system.

Is Web 2.0 a threat to representative democracy? A deliberation through the Australian carbon tax debate

The influence of social media is intensifying in global societies. As the technologies become cheaper and the acceptance of Web 2.0 becomes widespread, the power of social media on citizens, particularly the integrated influence of Facebook, Twitter, YouTube and blogs cannot be underestimated. In this paper, we attempt a deliberation through the lens of carbon tax debate in Australia where the influence of social media has perhaps begun to portend the role of elected representation in this representative democracy.