The Independent Local Government Review Panel (ILGRP) recently handed down its final report on the financial sustainability of New South Wales (NSW) councils. The report identifies a number of problems in relation to local government rating practice and recommends that the NSW Government consider replacing the present rate‑pegging regime, changing the base from which council rates are levied for high‑density unit complexes and reducing the number of exemptions and concessions currently available. At the heart of the recommendations is an empirically untested contention that the current system of council rates in NSW is inherently inequitable in terms of both inter‑municipal equity and capacity to pay. We begin our assessment of the ILGRP claims by reviewing the theoretical foundations of council property taxes. We then provide a synoptic account of NSW municipal rating before empirically assessing equity under the current arrangements. Finally, we propose a set of public policy responses which address the equity problems identified in our analysis.
{"title":"A Fair Go? A Response to the Independent Local Government Review Panel's Assessment of Municipal Taxation in NSW","authors":"J. Drew, B. Dollery","doi":"10.2139/ssrn.2666306","DOIUrl":"https://doi.org/10.2139/ssrn.2666306","url":null,"abstract":"The Independent Local Government Review Panel (ILGRP) recently handed down its final report on the financial sustainability of New South Wales (NSW) councils. The report identifies a number of problems in relation to local government rating practice and recommends that the NSW Government consider replacing the present rate‑pegging regime, changing the base from which council rates are levied for high‑density unit complexes and reducing the number of exemptions and concessions currently available. At the heart of the recommendations is an empirically untested contention that the current system of council rates in NSW is inherently inequitable in terms of both inter‑municipal equity and capacity to pay. We begin our assessment of the ILGRP claims by reviewing the theoretical foundations of council property taxes. We then provide a synoptic account of NSW municipal rating before empirically assessing equity under the current arrangements. Finally, we propose a set of public policy responses which address the equity problems identified in our analysis.","PeriodicalId":198089,"journal":{"name":"Australian Tax Forum","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2015-04-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127502969","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The pattern of distributions test (PODT) is a qualifying rule for revenue loss usage by discretionary trusts (non-fixed trusts) that are not a family trust. The PODT has received little attention from tax commentators. This article is related to an earlier article. The earlier article outlined the technical deficiencies in the PODT and concluded that the PODT is largely ineffective, or at least severely compromised, as a loss-access qualifying criterion for discretionary trusts. This article focuses on the policy challenges in designing an effective continuity of ownership type test for discretionary trusts, which is what the PODT is. This article concludes that while there are considerable challenges in designing an effective loss-access qualifying criterion for discretionary trusts, the current PODT falls far short of a credible loss-access qualifying rule.
{"title":"Pattern of Distributions Test for Discretionary Trusts: Defects Reveal Questionable Policy Design and Implementation","authors":"Dale Boccabella","doi":"10.2139/ssrn.2636671","DOIUrl":"https://doi.org/10.2139/ssrn.2636671","url":null,"abstract":"The pattern of distributions test (PODT) is a qualifying rule for revenue loss usage by discretionary trusts (non-fixed trusts) that are not a family trust. The PODT has received little attention from tax commentators. This article is related to an earlier article. The earlier article outlined the technical deficiencies in the PODT and concluded that the PODT is largely ineffective, or at least severely compromised, as a loss-access qualifying criterion for discretionary trusts. This article focuses on the policy challenges in designing an effective continuity of ownership type test for discretionary trusts, which is what the PODT is. This article concludes that while there are considerable challenges in designing an effective loss-access qualifying criterion for discretionary trusts, the current PODT falls far short of a credible loss-access qualifying rule.","PeriodicalId":198089,"journal":{"name":"Australian Tax Forum","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2015-02-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133309959","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The trans-Tasman travel arrangement allows Australian and New Zealand citizens to work and live in each other’s country with minimal restriction and is seen as being a key part of the closer economic arrangement (CER) between the two countries. This arrangement has its origins back to 1920 and predates the CER agreement between the two countries in by over six decades. The travel arrangement and the CER agreement, is also complemented by a comprehensive double tax agreement (DTA) and social security agreement (SSA) between the two countries.The trans-Tasman travel arrangement was of little significance until the late 1960s when a significant pattern of migration emerged of New Zealand citizens to Australia. It has been estimated that by 2012 over 648,000 New Zealand citizens lived in Australia.The trans-Tasman travel arrangement underwent a significant modification when in 2001 Australia unilaterally enacted a new category of non-immigrant visa for New Zealand citizens settling there. While the basic principle of allowing New Zealand citizens the right to work and live in Australia with minimal restriction remained, migrants after February 2001 are no longer treated as permanent residents of Australia and are ineligible for a wide range of social assistance irrespective of the time they are resident in Australia. Nor are they eligible to apply for Australian citizenship unless they qualify for permanent residence status. Thus New Zealand citizens who have settled in Australia since 2001 remain essentially “guest” workers on an indefinite basis.This paper examines the fiscal impact arising from the trans-Tasman travel arrangement after the changes in 2001. It is suggested in this paper that the existing frame works underpinning the social security and income tax agreements between the two countries are inconsistent with the changes unilaterally made by Australia in 2001 to the trans-Tasman travel arrangement. The effects of these current policy settings mean that New Zealand citizens must return to New Zealand if they are in need of social assistance with the cost borne by the New Zealand taxpayer. Longer term if CER is to achieve the benefits sought from a single market, a more coordinated and bilaterally negotiated approach to tax, social security and labour movement needs to be adopted.
{"title":"The Fiscal Impact of the Trans‑Tasman Travel Arrangement: Have the Costs Become Too High?","authors":"Andrew M. C. Smith","doi":"10.2139/SSRN.2569477","DOIUrl":"https://doi.org/10.2139/SSRN.2569477","url":null,"abstract":"The trans-Tasman travel arrangement allows Australian and New Zealand citizens to work and live in each other’s country with minimal restriction and is seen as being a key part of the closer economic arrangement (CER) between the two countries. This arrangement has its origins back to 1920 and predates the CER agreement between the two countries in by over six decades. The travel arrangement and the CER agreement, is also complemented by a comprehensive double tax agreement (DTA) and social security agreement (SSA) between the two countries.The trans-Tasman travel arrangement was of little significance until the late 1960s when a significant pattern of migration emerged of New Zealand citizens to Australia. It has been estimated that by 2012 over 648,000 New Zealand citizens lived in Australia.The trans-Tasman travel arrangement underwent a significant modification when in 2001 Australia unilaterally enacted a new category of non-immigrant visa for New Zealand citizens settling there. While the basic principle of allowing New Zealand citizens the right to work and live in Australia with minimal restriction remained, migrants after February 2001 are no longer treated as permanent residents of Australia and are ineligible for a wide range of social assistance irrespective of the time they are resident in Australia. Nor are they eligible to apply for Australian citizenship unless they qualify for permanent residence status. Thus New Zealand citizens who have settled in Australia since 2001 remain essentially “guest” workers on an indefinite basis.This paper examines the fiscal impact arising from the trans-Tasman travel arrangement after the changes in 2001. It is suggested in this paper that the existing frame works underpinning the social security and income tax agreements between the two countries are inconsistent with the changes unilaterally made by Australia in 2001 to the trans-Tasman travel arrangement. The effects of these current policy settings mean that New Zealand citizens must return to New Zealand if they are in need of social assistance with the cost borne by the New Zealand taxpayer. Longer term if CER is to achieve the benefits sought from a single market, a more coordinated and bilaterally negotiated approach to tax, social security and labour movement needs to be adopted.","PeriodicalId":198089,"journal":{"name":"Australian Tax Forum","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2014-01-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115947374","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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