Population ageing and tax reform in a dual welfare state

Research output: Contribution to journalArticleResearchpeer-review

Abstract

Traditionally, older people have been the key targets of Australia's targeted welfare state. Flat rate pensions and widespread home ownership have ensured relative equality in older life. However, in response to perceived fiscal pressures generated by population ageing, Australia has increasingly shifted its policy settings, encouraging private savings over public risk pooling. Private savings are increasingly supported by public subsidy through tax policy. This has led to overlapping policy priorities, as public subsidies are used both as incentives to promote savings and as social policy instruments to promote adequate living standards in retirement. This conflict is evident in recent policy reviews of taxation, public spending and pension policy. This article explores the development of this conflict and how it manifests in proposals for reform. We argue that the conflation of welfare and taxation goals increasingly creates a dual welfare state that promotes private provision at the expense of both equity and efficiency. We suggest that more explicit identification of the roles of tax policy, and the welfare implications of tax changes, would help to improve policy design.

LanguageEnglish
Pages45-64
Number of pages20
JournalEconomic and Labour Relations Review
Volume22
Issue number3
DOIs
Publication statusPublished - 2011

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Population aging
Welfare state
Tax reform
Taxation
Private savings
Public subsidies
Tax policy
Fiscal
Public spending
Home ownership
Older people
Retirement
Risk pooling
Policy design
Policy instruments
Standard of living
Tax
Equity
Social policy
Overlapping

Cite this

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Population ageing and tax reform in a dual welfare state. / Spies-Butcher, Ben; Stebbing, Adam.

In: Economic and Labour Relations Review, Vol. 22, No. 3, 2011, p. 45-64.

Research output: Contribution to journalArticleResearchpeer-review

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