The tax law contains a number of special regimes that apply to certain kinds of entities. This chapter outlines the special rules relating to primary producers, special professionals, minors, life insurance companies, co-operative companies, listed investment companies, corporate limited partnerships, public trading trusts, managed investment trusts, corporate collective investment vehicles, foreign hybrids, and offshore banking units.

Income tax systems commonly contain a broad range of tax incentives. These incentives are tax expenditures as they are an indirect form of government spending designed to benefit targeted taxpayers. Based on the income tax formula, the principal ways that tax incentives may be provided are by granting special exemptions, deductions, tax offsets or reduced tax rates. This chapter examines a number of intricate tax incentive programs that have been established by the Australian Government to encourage certain forms of investment. In particular, it examines various programs that support investment in start-ups and other entrepreneurial ‘small and medium enterprises’ (‘SMEs’). These entities have the potential for rapid growth and play a key role in Australia’s innovation system. However, because of their risky nature, they often find it difficult to borrow money and need to rely heavily on equity finance. This form of finance is known as ‘venture capital’ and comes from two main sources: angel investors (ie wealthy entrepreneurs and business people) and venture capital funds (ie funds run by professional fund managers).

Partnerships are a common and relatively straightforward form of business structure. The general taxation rules dealing with partnerships are contained in div 5 of pt III ITAA36 (ss 90–94). Division 5 ensures that while partnership income and losses are calculated at the partnership entity level, a partnership does not actually pay any tax. Instead, the income and losses ‘flow through’ to the partners based on their respective interests in the partnership. This ensures that it is the individual partners (rather than the partnership) that are the relevant taxpayers.

This chapter examines the nature of a partnership and focuses on the way that the partnership taxation rules in div 5 operate. It also considers how the tax law deals with certain kinds of partnership dealings (eg variations in the constitution of partnerships) and how the CGT regime applies to partnership assets and assignments of interests in partnerships.

Trusts are a popular form of business and investment vehicle in Australia and are also established for a variety of other reasons (eg charitable purposes). This chapter examines the nature of a trust and discusses how trust estates are taxed. The general rules relating to the taxation of trust estates are contained in div 6 of pt III ITAA36 (ss 95AAA to 102). Division 6 calculates the ‘net income’ of a trust estate and assesses the net income in the hands of either the beneficiaries or the trustees of the estate. The operation of the assessment rules depends on whether a beneficiary is ‘presently entitled’ to a ‘share’ of the ‘income’ of the trust estate and whether the beneficiary is under a ‘legal disability’. The rules also operate subject to jurisdictional rules that take into account the concepts of residence and source. Trusts differ fundamentally from companies in that they are not treated as separate taxpayers. Although s 960-100(1) ITAA97 refers to a trust as an ‘entity’, no tax is payable by a trust.

This textbook looks at the theory of human rights, its historical roots, and goes on to examine several key areas of human rights, including the intersection between human rights and international law, access to treaty-based mechanisms and their practice and case law, international human rights courts and tribunals, including those with a criminal function, justiciability of rights before the courts, civil and political rights, as well as socio-economic rights.

This chapter seeks to demonstrate, among other things, that these dangers to personal liberty far outweigh the threats to human safety posed by serious ‘terrorist’ threats. The reader will acquire an appreciation of the obligation of states to protect their citizens from terrorism, including the debate as to whether terrorists possess human rights obligations. We shall then proceed to examine the most pertinent human rights violations in counter-terrorist operations. These include the application of the principle of legality to terrorist legislation, the permissibility of relevant derogations, the right to life and the practice of targeted killings, the various contours of unlawful detention against terrorist suspects, torture and ill-treatment in order to gather intelligence information and promote confessions and finally the practice of abductions, unlawful extraditions and illegal rendition. To be sure, counter-terrorist operations have been found to infringe a range of other civil and political rights, such as the freedom of expression and the right to a fair trial.

Treaty bodies fulfil a range of functions, from promotional activities to monitoring and adjudicating complaints. These tasks, which are taken for granted today, are the result of states’ willingness to vest treaty bodies with the mandate of monitoring compliance. This constituted a remarkable shift away from earlier notions of sovereignty in a system where states were, essentially, the sole authors, interpreters and enforcers of rights and obligations. What accounts for this change and why do states agree to be part of such regimes? This question, which has attracted considerable attention in recent years, poses a particular challenge because it does not seem to conform to the realist views that used to hold considerable sway in international relations, according to which states use institutions as a means to exercise power. Alternative theories emphasise states’ interests or point to ‘acculturation’. This denotes a process of interaction of various actors which generates a pull to build and join credible human rights mechanisms as part of an international order. Indeed, these mechanisms form part of broader international institution building, particularly at the UN level.

Ordinarily, the income tax law treats distinct legal entities as separate taxpayers. As a result, each entity must determine its own tax liability, irrespective of the liability of any other entity that may be related to it. This principle, however, operates subject to the consolidation regime, which was introduced on 1 July 2002 and is contained in pt 3-90 ITAA97 (divs 700 to 721). This chapter outlines the basic features of the consolidation regime. Because of the complexity of the regime, it is only possible to discuss the main general rules and not the many intricate exceptions to them. The chapter commences by examining the nature of a consolidated group and how such a group is formed. It also discusses a related kind of group, known as an ‘MEC group’. The chapter then proceeds to examine some of the core rules that exist under the consolidation regime, being the single entity rule, the entry history rule and the exit history rule. Other important rules, such as the cost setting rules and loss transfer rules, are also considered. The chapter also discusses the consequences that arise where an entity leaves a consolidated group. It concludes with a discussion of the special liability rules that apply to the tax debts of a consolidated group.

Chapter 13 provides a brief treatment of effectiveness-cost and benefit-cost analysis as it applies to school inputs and outputs. Cost-effectiveness analysis compares how much each intervention costs in order to produce the estimated increase in output, where increases in output from each of these different interventions is measured by the same output metric. The goal is to identify the inputs that produce the largest increases in output per unit cost. Cost-benefit analysis comes into play when the gains in output are measured on different outputs – for example, in one intervention, it might be measured as mathematics test score gain, and in another, it might be measured as increased growth mindset. Because the outputs are different, they need to be translated into a “common denominator.” This is usually the economic value of each of those educational outcomes as measured by increases in adult earnings.

A taxpayer’s assessable income includes not only amounts that are ordinary income, but also amounts that are ‘statutory income’ (s 6-10(1) ITAA97). Statutory income comprises those amounts that are deemed by the legislation to be assessable income, but are not necessarily income according to ordinary concepts. There are more than 100 statutory income provisions in the ITAA36 and ITAA97. A useful list of these provisions is contained in div 10 ITAA97. A number of other statutory income provisions are discussed in subsequent chapters. In practice, one of the most important statutory income provisions is s 102-5 ITAA97, which renders a ‘net capital gain’ assessable. Like the ordinary income rules, the statutory income provisions operate subject to jurisdictional rules. As with ordinary income, to the extent that statutory income is exempt income or non-assessable non-exempt income, it is excluded from assessable income (ss 6-1, 6-15, 6-20, 6-23 ITAA97). This means, for example, that to the extent that a taxpayer’s statutory income includes GST on a taxable supply, it is not assessable as it constitutes non-assessable non-exempt income by virtue of s 17-5 ITAA97.

Goods and services tax (‘GST’) is one of Australia’s most important and widely encountered taxes. According to the 2023 Budget Papers, GST is expected to raise approximately $88,042 billion in 2022/23, making it the second largest tax behind income tax. GST revenue is paid by the Commonwealth to the states and territories under special revenue-sharing arrangements. GST is a broad-based transactions tax which, like the value added tax (‘VAT’) that operates in many jurisdictions overseas, generally applies at each stage of the supply chain. The way it basically works is that registered entities charge GST on their supplies (ie outputs) and are entitled to credits for GST charged on their acquisitions (ie inputs). The burden of GST is designed to ultimately fall on end consumers who are not registered and are therefore not entitled to any credits for GST charged on the things they acquire. This chapter outlines the background to the introduction of GST and explains the basic principles that underpin its operation. The chapter focuses on the concepts of ‘taxable supplies’ and ‘creditable acquisitions’, which are the core building blocks of the GST system.

Chapter 1 is the first of three chapters that introduce the book. It presents the main concepts used and makes the case for a political economy approach to studying education – one that combines economics of education with political theory. The chapter argues that typical economics of education analyses provide powerful tools to study education, but have analytical shortcomings – they generally assume that markets are competitve, that all economic actors are politically equal, and that, given similar information, they would make similar economic choices, no matter their position in the social structure. The chapter suggests that a political economy approach provides a deeper discussion of market imperfections and economic/political power – including how power relations influence individual choice and condition the identification and treatment of market imperfections – to more fully understand education as an institution and its role in society. The chapter ends by providing three examples of important policy issues in education that such an approach would be likely to address: the relationship between education and economic growth; gender discrimination in labor markets; and teacher shortages.

Like other developed countries around the world, Australia imposes a broad mix of taxes on labour, capital and consumption. The Australian tax system is, however, complicated by the fact that Australia is a federation that includes six states and two mainland territories which all have their own legislatures that impose their own taxes. In addition, Australia also has more than 500 local government authorities which levy their own council rates. In 2008, the Commonwealth Treasury’s discussion paper, Architecture of Australia’s Tax and Transfer System, identified at least 125 different taxes levied in Australia, with the 10 largest taxes accounting for more than 90% of all government revenue. Of the 125 taxes, 99 were levied by the Commonwealth Government, 25 by the state and territory governments, and 1 by local government. The Treasury’s estimate of the number of taxes was based on equivalent state and territory taxes being counted as a single tax, even though they differed in terms of rates, thresholds and exemptions, and were paid to different authorities.

The Australian Government has negotiated bilateral tax agreements (also known as ‘treaties’ or ‘conventions’) with the governments of more than 40 nations. These agreements are often referred to as Double Taxation Agreements (‘DTAs’) since one of their main functions is to prevent international juridical double taxation. DTAs deal with double taxation issues by allocating taxing rights in relation to cross-border transactions between Australia and the respective ‘Contracting States’. DTAs also assist with the prevention of tax evasion through the exchange of information between the relevant tax authorities. They also indirectly serve to promote trade and investment between Australia and the Contracting States, as they reduce the uncertainty of international tax treatment of cross-border transactions. International juridical double taxation essentially arises where two countries tax an entity on the same amount. This can occur due to the different kinds of conflicts. For instance, double taxation can arise because it is common for countries to tax residents on their worldwide income and non-residents on income sourced within their territories.