Submission to Tax Expenditure Statement Consultation

by John Daley and Brendan Coates

Tax expenditures are government revenues foregone because certain activities or classes of taxpayers receive preferential tax treatment. Tax expenditures can take many forms including exemptions, deductions, concessional rates or deferral of tax liabilities. Estimates of tax expenditures inform public discussion of the cost of tax concessions. Because tax expenditures are inherently more difficult to measure and observe than government spending, they do not attract the same scrutiny, despite their often large budget impact. The annual TES provides a regular assessment of the size and scope of these expenditures. Ultimately, this improves the transparency and accountability of government.

This submission addresses three particular issues raised in the consultation paper and presents our views on whether and how the TES can be improved.