Incentivising private health insurance through the income tax regime : Capitalising on behavioural models

The Australian income tax regime is generally regarded as a mechanism by which the Federal Government raises revenue, with much of the revenue raised used to support public spending programs. A prime example of this type of spending program is health care. However, a government may also decide that the private sector should provide a greater share of the nation's health care. To achieve such a policy it can bring about change through positive regulation, or it can use the taxation regime, via tax expenditures, not to raise revenue but to steer or influence individuals in its desired direction. When used for this purpose, tax expenditures steer taxpayers towards or away from certain behaviour by either imposing costs on, or providing benefits to them. Within the context of the health sector, the Australian Federal Government deploys social steering via the tax system, with the Medicare Levy Surcharge and the 30 percent Private Health Insurance Rebate intended to steer taxpayer behaviour towards the Government’s policy goal of increasing the amount of health provision through the private sector. These steering mechanisms are complemented by the ‘Lifetime Health Cover Initiative’. This article, through the lens of behavioural economics, considers the ways in which these assorted mechanisms might have been expected to operate and whether they encourage individuals to purchase private health insurance.

The implementation of social and economic policy through the tax regime : a review of Australia's tax expenditures program

Each year the Australian Federal Treasury releases its Tax Expenditures Statement providing details of concessions, benefits, and incentives delivered through the tax regime to Australian taxpayers. The current Tax Expenditures Statement, released on 25 January 2008, lists approximately 300 tax expenditures and reports on the estimated pecuniary value in terms of revenue foregone, estimated to be a total of $50.12 billion for the 2006-07 financial year. Apart from the annual Tax Expenditures Statement, and despite the recurring fiscal impact, there is very little other scrutiny of Australia’s Federal tax expenditures program. This is despite tax expenditures often being seen as an alternative to direct expenditures with similar impact on the Federal budget. The object of tax expenditures is to provide government assistance and meet government objectives, and, as such, tax expenditures are departures from the revenue raising aspect of the tax regime. Within this context, this article examines the fundamental concept of tax expenditures as contrasted with direct expenditures and considers the role they play in the current tax regime.

The taxation of multinational banks : alternative apportionment through a unitary taxation regime aligning with economic reality

The taxation of multinational banks currently is governed by the general principles of international tax. However, it is arguable that there are characteristics exclusive to multinational banks that may warrant the consideration of a separate taxing regime. This article argues that because of the unique nature of multinational banks, the traditional international tax rules governing jurisdiction to tax and allocation of income do not produce a result which is optimal, as it does not reflect economic reality. That is, the current system does not produce a result that accurately reflects the economic source of the income or the location of the economic activity. The suggested alternative is unitary taxation using global formulary apportionment. Formulary apportionment is considered as an alternative that reflects economic reality by recognising the unique nature of multinational banks and allocating the income to the location of the economic activity. The unique nature of multinational banking is recognised in the fact that formulary apportionment does not attempt to undertake a transactional division of a highly integrated multinational entity. Rather, it allocates income to the jurisdictions based on an economically justifiable formula. Starting from this recognition, the purpose of this article is to demonstrate that formulary apportionment is a theoretically superior (or optimal) model for the taxation of multinational banks. An optimal regime, for the purposes of this article, is considered to be one that distributes the taxing rights in an equitable manner between the relevant jurisdictions, while, simultaneously allowing decisions of the international banks to be tax neutral. In this sense, neutrality is viewed as an economic concept and equity is regarded as a legal concept. A neutral tax system is one in which tax rules do not affect economic choices about commercial activities. Neutrality will ideally be across jurisdictions as well as across traditional and non-traditional industries. The primary focus of this article is jurisdictional neutrality. A system that distributes taxing rights in an equitable manner between the relevant jurisdictions ensures that each country receives its fair share of tax revenue. Given the increase in multinational banking, jurisdictions should be concerned that they are receiving their fair share. Inter-nation equity is concerned with re-determining the proper division of the tax base among countries. Richard and Peggy Musgrave argue that sharing of the tax base by countries of source should be seen as a matter of inter-nation equity requiring international cooperation. The rights of the jurisdiction of residency will also be at issue. To this extent, while it is agreed that inter-nation equity is an essential attribute to an international tax regime, there is no universal agreement as to how to achieve it. The current system attempts to achieve such equity through a combined residency and source regime, with the transfer pricing rules used to apportion income between the relevant jurisdictions. However, this article suggests, that as an alternative to the current regime, equity would be achieved through formulary apportionment. Opposition to formulary apportionment is generally based on the argument that it is not a theoretically superior (or optimal) model because of the implementation difficulties. Yet these are two separate issues. As such, this article is divided into two core parts. The first part examines the theoretical soundness of the formulary apportionment model concluding that it is theoretically superior to the arm’s length pricing requirement of the traditional transfer pricing regime. The second part examines the practical implications of accepting formulary apportionment as an optimal model with a view to disclosing the issues that arise when a formulary apportionment regime is adopted. Prior to an analysis of the theoretical and practical application of formulary apportionment to multinational banks, the unique nature of these banks is considered. The article concludes that, while there are significant implementation, compliance, and enforcement issues to overcome, the unitary taxation model may be theoretically superior to the current arm’s length model which applies to multinational banks. This conclusion is based on the unitary taxation model providing greater alignment with the unique features of these banks.

Equity for taxpayers within Australia’s retirement savings regime : a dissenting opinion

This article asks the question whether Australia’s retirement savings regime, specifically the superannuation component and the attached taxation concessions, is a regime which is equitable to all taxpayers. In a dissenting opinion, it is argued that the current regime, along with the changes proposed by the Federal Government in its response to the Henry Review, does not result in a retirement savings regime which benefits all taxpayers equally. As such, it is suggested that the only way to ensure an equitable regime is to incorporate a gender perspective into public finance analysis to determine how the retirement savings policies affect women and men differently. In doing so, a specific tax policy which provides for additional, fiscally significant concessions for taxpayers who do not fit the criteria of a ‘normal’ taxpayer, that is a taxpayer working as an employee in a full time position for an uninterrupted 35 years, should be incorporated into Australia’s current fiscal policy.

The Attack on Political Correctness: Islamophobia and the Erosion of Multiculturalism In Australia Under the Howard Regime

This article reports on civil society in Australia between 1996 and 2007 related to former Prime Minister John Howard. The article discusses Howard's neo-conservative ideology and Liberal-National coalition, noting his views on political correctness. Howard's administration is also discussed in terms of immigration, multiculturalism, indigenous land rights, othering, and Islamaphobia. Information on the effect of Islamaphobia on Australian perceptions and the treatment of Muslims is also provided

The inherent international tax regime and its constraints on Australia's sovereignty

On 1 November 2011 the Minister for Financial Services and Superannuation, the Honourable Bill Shorten MP, announced that Australia would be undertaking a reform of the ‘transfer pricing rules in the income tax law and Australia’s future tax treaties to bring them into line with international best practice, improving the integrity and efficiency of the tax system.’ Mr Shorten stated that the reason for the reform was that ‘recent court decisions suggest our existing transfer pricing rules may be interpreted in a way that is out-of-kilter with international norms.’ Further, he stated that ‘the Government has asked the Treasury to review how the transfer pricing rules can be improved, including but not limited to how to be more in line with international best practice.’ He urged all interested parties to participate in this consultation process. On 16 March 2012, an Exposure Draft and accompanying Explanatory Memorandum outlining the proposed amendments to implement the first stage of the transfer pricing reforms were released. Within the proposed changes is the explicit embedding of the use of the OECD’s Model Tax Convention on Income and on Capital and Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations to help determine the arm’s length price. Does this mean that Australia engages in an international tax regime?

Australia's adoption of an international tax regime : to engage or not to engage?

On 1 November 2011 the Minister for Financial Services and Superannuation, the Honourable Bill Shorten MP, announced that Australia would be undertaking a reform of the ‘transfer pricing rules in the income tax law and Australia's future tax treaties to bring them into line with international best practice, improving the integrity and efficiency of the tax system.’ Mr Shorten stated that the reason for the reform was that ‘recent court decisions suggest our existing transfer pricing rules may be interpreted in a way that is out-of-kilter with international norms.’ Further, he stated that ‘the Government has asked the Treasury to review how the transfer pricing rules can be improved, including but not limited to how to be more in line with international best practice.’ He urged all interested parties to participate in this consultation process.

Performance evaluation of onsite wastewater treatment : field sampling and preliminary evaluation of results

Background The onsite treatment of sewage and effluent disposal within the premises is widely prevalent in rural and urban fringe areas due to the general unavailability of reticulated wastewater collection systems. Despite the seemingly low technology of the systems, failure is common and in many cases leading to adverse public health and environmental consequences. Therefore it is important that careful consideration is given to the design and location of onsite sewage treatment systems. It requires an understanding of the factors that influence treatment performance. The use of subsurface effluent absorption systems is the most common form of effluent disposal for onsite sewage treatment and particularly for septic tanks. Additionally in the case of septic tanks, a subsurface disposal system is generally an integral component of the sewage treatment process. Therefore location specific factors will play a key role in this context. The project The primary aims of the research project are: • to relate treatment performance of onsite sewage treatment systems to soil conditions at site; • to identify important areas where there is currently a lack of relevant research knowledge and is in need of further investigation. These tasks were undertaken with the objective of facilitating the development of performance based planning and management strategies for onsite sewage treatment. The primary focus of the research project has been on septic tanks. Therefore by implication the investigation has been confined to subsurface soil absorption systems. The design and treatment processes taking place within the septic tank chamber itself did not form a part of the investigation. In the evaluation to be undertaken, the treatment performance of soil absorption systems will be related to the physico-chemical characteristics of the soil. Five broad categories of soil types have been considered for this purpose. The number of systems investigated was based on the proportionate area of urban development within the Brisbane region located on each soil types. In the initial phase of the investigation, though the majority of the systems evaluated were septic tanks, a small number of aerobic wastewater treatment systems (AWTS) were also included. This was primarily to compare the effluent quality of systems employing different generic treatment processes. It is important to note that the number of different types of systems investigated was relatively small. As such this does not permit a statistical analysis to be undertaken of the results obtained. This is an important issue considering the large number of parameters that can influence treatment performance and their wide variability. The report This report is the second in a series of three reports focussing on the performance evaluation of onsite treatment of sewage. The research project was initiated at the request of the Brisbane City Council. The work undertaken included site investigation and testing of sewage effluent and soil samples taken at distances of 1 and 3 m from the effluent disposal area. The project component discussed in the current report formed the basis for the more detailed investigation undertaken subsequently. The outcomes from the initial studies have been discussed, which enabled the identification of factors to be investigated further. Primarily, this report contains the results of the field monitoring program, the initial analysis undertaken and preliminary conclusions. Field study and outcomes Initially commencing with a list of 252 locations in 17 different suburbs, a total of 22 sites in 21 different locations were monitored. These sites were selected based on predetermined criteria. To obtain house owner agreement to participate in the monitoring study was not an easy task. Six of these sites had to be abandoned subsequently due to various reasons. The remaining sites included eight septic systems with subsurface effluent disposal and treating blackwater or combined black and greywater, two sites treating greywater only and six sites with AWTS. In addition to collecting effluent and soil samples from each site, a detailed field investigation including a series of house owner interviews were also undertaken. Significant observations were made during the field investigations. In addition to site specific observations, the general observations include the following: • Most house owners are unaware of the need for regular maintenance. Sludge removal has not been undertaken in any of the septic tanks monitored. Even in the case of aerated wastewater treatment systems, the regular inspections by the supplier is confined only to the treatment system and does not include the effluent disposal system. This is not a satisfactory situation as the investigations revealed. • In the case of separate greywater systems, only one site had a suitably functioning disposal arrangement. The general practice is to employ a garden hose to siphon the greywater for use in surface irrigation of the garden. • In most sites, the soil profile showed significant lateral percolation of effluent. As such, the flow of effluent to surface water bodies is a distinct possibility. • The need to investigate the subsurface condition to a depth greater than what is required for the standard percolation test was clearly evident. On occasion, seemingly permeable soil was found to have an underlying impermeable soil layer or vice versa. The important outcomes from the testing program include the following: • Though effluent treatment is influenced by the physico-chemical characteristics of the soil, it was not possible to distinguish between the treatment performance of different soil types. This leads to the hypothesis that effluent renovation is significantly influenced by the combination of various physico-chemical parameters rather than single parameters. This would make the processes involved strongly site specific. • Generally the improvement in effluent quality appears to take place only within the initial 1 m of travel and without any appreciable improvement thereafter. This relates only to the degree of improvement obtained and does not imply that this quality is satisfactory. This calls into question the value of adopting setback distances from sensitive water bodies. • Use of AWTS for sewage treatment may provide effluent of higher quality suitable for surface disposal. However on the whole, after a 1-3 m of travel through the subsurface, it was not possible to distinguish any significant differences in quality between those originating from septic tanks and AWTS. • In comparison with effluent quality from a conventional wastewater treatment plant, most systems were found to perform satisfactorily with regards to Total Nitrogen. The success rate was much lower in the case of faecal coliforms. However it is important to note that five of the systems exhibited problems with regards to effluent disposal, resulting in surface flow. This could lead to possible contamination of surface water courses. • The ratio of TDS to EC is about 0.42 whilst the optimum recommended value for use of treated effluent for irrigation should be about 0.64. This would mean a higher salt content in the effluent than what is advisable for use in irrigation. A consequence of this would be the accumulation of salts to a concentration harmful to crops or the landscape unless adequate leaching is present. These relatively high EC values are present even in the case of AWTS where surface irrigation of effluent is being undertaken. However it is important to note that this is not an artefact of the treatment process but rather an indication of the quality of the wastewater generated in the household. This clearly indicates the need for further research to evaluate the suitability of various soil types for the surface irrigation of effluent where the TDS/EC ratio is less than 0.64. • Effluent percolating through the subsurface absorption field may travel in the form of dilute pulses. As such the effluent will move through the soil profile forming fronts of elevated parameter levels. • The downward flow of effluent and leaching of the soil profile is evident in the case of podsolic, lithosol and kransozem soils. Lateral flow of effluent is evident in the case of prairie soils. Gleyed podsolic soils indicate poor drainage and ponding of effluent. In the current phase of the research project, a number of chemical indicators such as EC, pH and chloride concentration were employed as indicators to investigate the extent of effluent flow and to understand how soil renovates effluent. The soil profile, especially texture, structure and moisture regime was examined more in an engineering sense to determine the effect of movement of water into and through the soil. However it is not only the physical characteristics, but the chemical characteristics of the soil also play a key role in the effluent renovation process. Therefore in order to understand the complex processes taking place in a subsurface effluent disposal area, it is important that the identified influential parameters are evaluated using soil chemical concepts. Consequently the primary focus of the next phase of the research project will be to identify linkages between various important parameters. The research thus envisaged will help to develop robust criteria for evaluating the performance of subsurface disposal systems.

Performance evaluation of onsite sewage treatment : results of soil investigations

Background The onsite treatment of sewage and effluent disposal is widely prevalent in rural and urban fringe areas due to the general unavailability of reticulated wastewater collection systems. Despite the low technology of the systems, failure is common and in many cases leading to adverse public health and environmental consequences. It is important therefore that careful consideration is given to the design and location of onsite sewage treatment systems. This requires an understanding of the factors that influence treatment performance. The use of subsurface absorption systems is the most common form of effluent disposal for onsite sewage treatment, particularly for septic tanks. Also, in the case of septic tanks, a subsurface disposal system is generally an integral component of the sewage treatment process. Site specific factors play a key role in the onsite treatment of sewage. The project The primary aims of the research project were: • to relate treatment performance of onsite sewage treatment systems to soil conditions at site; • to evaluate current research relating to onsite sewage treatment; and, • to identify key issues where currently there is a lack of relevant research. These tasks were undertaken with the objective of facilitating the development of performance based planning and management strategies for onsite sewage treatment. The primary focus of this research project has been on septic tanks. By implication, the investigation has been confined to subsurface soil absorption systems. The design and treatment processes taking place within the septic tank chamber itself did not form a part of the investigation. Five broad categories of soil types prevalent in the Brisbane region have been considered in this project. The number of systems investigated was based on the proportionate area of urban development within the Brisbane region located on each of the different soil types. In the initial phase of the investigation, the majority of the systems evaluated were septic tanks. However, a small number of aerobic wastewater treatment systems (AWTS) were also included. The primary aim was to compare the effluent quality of systems employing different generic treatment processes. It is important to note that the number of each different type of system investigated was relatively small. Consequently, this does not permit a statistical analysis to be undertaken of the results obtained for comparing different systems. This is an important issue considering the large number of soil physico-chemical parameters and landscape factors that can influence treatment performance and their wide variability. The report This report is the last in a series of three reports focussing on the performance evaluation of onsite treatment of sewage. The research project was initiated at the request of the Brisbane City Council. The project component discussed in the current report outlines the detailed soil investigations undertaken at a selected number of sites. In the initial field sampling, a number of soil chemical properties were assessed as indicators to investigate the extent of effluent flow and to help understand what soil factors renovate the applied effluent. The soil profile attributes, especially texture, structure and moisture regime were examined more in an engineering sense to determine the effect of movement of water into and through the soil. It is important to note that it is not only the physical characteristics, but also the chemical characteristics of the soil as well as landscape factors play a key role in the effluent renovation process. In order to understand the complex processes taking place in a subsurface effluent disposal area, influential parameters were identified using soil chemical concepts. Accordingly, the primary focus of this final phase of the research project was to identify linkages between various soil chemical parameters and landscape patterns and their contribution to the effluent renovation process. The research outcomes will contribute to the development of robust criteria for evaluating the performance of subsurface effluent disposal systems. The outcomes The key findings from the soil investigations undertaken are: • Effluent renovation is primarily undertaken by a combination of various soil physico-chemical parameters and landscape factors, thereby making the effluent renovation processes strongly site dependent. • Decisions regarding site suitability for effluent disposal should not be based purely in terms of the soil type. A number of other factors such as the site location in the catena, the drainage characteristics and other physical and chemical characteristics, also exert a strong influence on site suitability. • Sites, which are difficult to characterise in terms of suitability for effluent disposal, will require a detailed soil physical and chemical analysis to be undertaken to a minimum depth of at least 1.2 m. • The Ca:Mg ratio and Exchangeable Sodium Percentage are important parameters in soil suitability assessment. A Ca:Mg ratio of less than 0.5 would generally indicate a high ESP. This in turn would mean that Na and possibly Mg are the dominant exchangeable cations, leading to probable clay dispersion. • A Ca:Mg ratio greater than 0.5 would generally indicate a low ESP in the profile, which in turn indicates increased soil stability. • In higher clay percentage soils, low ESP can have a significant effect. • The presence of high exchangeable Na can be counteracted by the presence of swelling clays, and an exchange complex co-dominated by exchangeable Ca and exchangeable Mg. This aids absorption of cations at depth, thereby reducing the likelihood of dispersion. • Salt is continually added to the soil by the effluent and problems may arise if the added salts accumulate to a concentration that is harmful to the soil structure. Under such conditions, good drainage is essential in order to allow continuous movement of water and salt through the profile. Therefore, for a site to be sustainable, it would have a maximum application rate of effluent. This would be dependent on subsurface characteristics and the surface area available for effluent disposal. • The dosing regime for effluent disposal can play a significant role in the prevention of salt accumulation in the case of poorly draining sites. Though intermittent dosing was not considered satisfactory for the removal of the clogging mat layer, it has positive attributes in the context of removal of accumulated salts in the soil.

The inherent international tax regime and its constraints on Australia's sovereignty

Neither an international tax, nor an international taxing body exists. Rather, there are domestic taxing rules adopted by jurisdictions which, coupled with double tax treaties, apply to cross-border transactions and international taxation issues. International bodies such as the OECD and UN, which provide guidance on tax issues, often steer and supplement these domestic adoptions but have no binding international taxing powers. These pragmatic realities, together with the specific use of the word ‘regime’ within the tax community, lead many to argue that an international tax regime does not exist. However, an international tax regime should be defined no differently to any other area of international law and when we step outside the confines of tax law to consider the definition of a ‘regime’ within international relations it is possible to demonstrate that such a regime is very real. The first part of this article, by defining an international tax regime in a broader and more traditional context, also outlining both the tax policy and principles which frame that regime, reveals its existence. Once it is accepted that an international tax regime exists, it is possible to consider its adoption by jurisdictions and subsequent constraints it places on them. Using the proposed changes to transfer pricing laws as the impetus for assessing Australia’s adoption of the international tax regime, the constraints on sovereignty are assessed through a taxonomy of the level adoption. This reveals the subsequent constraints which flow from the broad acceptance of an international tax regime through to the specific adoption of technical detail. By undertaking this analysis, the second part of this article demonstrates that Australia has inherently adopted an international tax regime, with a move towards explicit adoption and a clear embedding of its principles within the domestic tax legislation.

Why we need a population-based approach to clinical indicators for cancer: a case study using microscopic confirmation of lung cancer in Queensland

An important function of clinical cancer registries is to provide feedback to clinicians on various performance measures. To date, most clinical cancer registries in Australia are located in tertiary academic hospitals, where adherence to guidelines is probably already high. Microscopic confirmation is an important process measure for lung cancer care. We found that the proportion of patients with lung cancer without microscopic confirmation was much higher in regional public hospitals (27.1%) than in tertiary hospitals (7.5%), and this disparity remained after adjusting for age, sex and comorbidities. The percentage was also higher in the private than in the public sector. This case study shows that we need a population-based approach to measuring clinical indicators that includes regional public hospitals as a matter of priority and should ideally include the private sector.