Recent Trends in Income Redistribution in Australia: Can Changes in the Tax-Transfer System Account for the Decline in Redistribution?

33 Pages Posted: 26 Feb 2014

See all articles by Nicolas Herault

Nicolas Herault

University of Melbourne - Melbourne Institute: Applied Economic & Social Research

Francisco Azpitarte

Melbourne Institute of Applied Economic and Social Research & Brotherhood of St Laurence

Date Written: February 2014

Abstract

We examine trends in the redistributive impact of the tax-transfer system in Australia between 1994 and 2009 using a framework that allows us to separate the contributions of taxes and benefits to overall income redistribution. Furthermore, we identify the effect of tax-transfer policy reforms on changes in income redistribution over the period by controlling for changes in the distribution of market incomes. We find that after reaching a peak value in the late 1990s, the redistributive impact of taxes and transfers steadily declined. Although reforms to the tax-transfer system contributed to the decline in redistribution, their contribution was limited.

Keywords: Taxes and transfers, income inequality, progressivity, redistributive effect

JEL Classification: H23, J22, D31

Suggested Citation

Herault, Nicolas and Azpitarte, Francisco, Recent Trends in Income Redistribution in Australia: Can Changes in the Tax-Transfer System Account for the Decline in Redistribution? (February 2014). Melbourne Institute Working Paper No. 2/14, Available at SSRN: https://ssrn.com/abstract=2401484 or http://dx.doi.org/10.2139/ssrn.2401484

Nicolas Herault (Contact Author)

University of Melbourne - Melbourne Institute: Applied Economic & Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

HOME PAGE: http://www.findanexpert.unimelb.edu.au/researcher/person125238.html

Francisco Azpitarte

Melbourne Institute of Applied Economic and Social Research & Brotherhood of St Laurence ( email )

Level 5, FBE Building, 111 Barry Street
111 Barry Street, University of Melbourne
Melbourne, 3010
+61 3 9035 3414 (Phone)
+61 3 8344 2111 (Fax)

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