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Population Ageing and Tax Reform in a Dual Welfare State

Published online by Cambridge University Press:  01 January 2023

Ben Spies-Butcher  and
Adam Stebbing
Ben Spies-Butcher
Affiliation:
Department of Sociology, Macquarie University
Adam Stebbing
Affiliation:
Department of Sociology, Macquarie University
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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.

Keywords

H24H55I38Health insurancehousing subsidiespensionsprivate savingretirement incomesretirement policysocial inequalitysuperannuationwelfare state
Type
Symposium
Information
The Economic and Labour Relations Review , Volume 22 , Issue 3: Australia's Transfer and Tax System Under Review , November 2011 , pp. 45 - 63
Copyright
Copyright © The Author(s) 2011

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