This chapter focuses on the concepts of ‘residence’ and ‘source’. These concepts are important because they underpin Australia’s ‘general jurisdictional rules’, which apply to a taxpayer’s ordinary and statutory income. The general jurisdictional rules recognise that there must be some territorial link between Australia and either the taxpayer or the source of the income in order for Australia to exercise its taxing rights. Foreign residents are therefore generally not taxed on their foreign income as there is a complete lack of connection with Australia. It is important to be aware that the general jurisdictional rules operate subject to numerous exceptions. For instance, in special cases, foreign residents may be assessed on ordinary and statutory income on some basis other than the income having an Australian source (ss 6-5(3)(b), 6-10(5)(b)). The general jurisdictional rules also operate subject to a range of exemptions as well as special rules contained in Australia’s DTAs. Special rules also apply to ‘temporary residents’ and taxpayers that carry on business through permanent establishments (‘PEs’).

Taxation law is a vast and dynamic area of law that intersects with many other areas of law and is never static. Australia has dozens of tax statutes containing thousands of pages of complex and interconnected legislative provisions. In addition, the Australian courts and tribunals have handed down hundreds of significant tax decisions over the years. Many of these cases involve complex commercial factual situations that raise thorny legal issues. This chapter introduces the primary sources of taxation law in Australia; namely, statute and common law. It also outlines the main kinds of rulings and advice documents issued by the ATO. These documents are important as they set out the Commissioner’s views on the operation of the law and, in certain cases, can be binding. The chapter also discusses the vast range of secondary reference material that can be used to assist in researching and resolving tax problems. It also identifies some of the key websites that are useful for conducting tax research. The chapter concludes with a discussion of some basic rules of statutory interpretation, which are critical for understanding and applying tax legislation.

This chapter examines some of the important identification and payment systems that underpin the Australian tax system. The key identification systems are the TFN and ABN systems. The main payment system is the PAYG system. The administration and enforcement of the tax laws is also supported by the financial transaction reporting regime, which assists the government identify tax evaders by tracking suspicious financial dealings and the movement of large amounts of cash.

The most common ways employers remunerate their employees are by paying them salary, providing them with fringe benefits and making contributions to their superannuation funds. A special way that a company can remunerate its employees is by allowing them to acquire shares, or rights to acquire shares, in the company at a discount. Issuing shares or rights to employees is a cost-effective form of remuneration as it does not require the company to pay them any money. It also helps a company attract talented staff, increase staff loyalty and reduce staff turnover. By giving employees a stake in the company, the interests of employees are more closely aligned with the interests of their employer. This has the potential to lead to greater employee commitment and boost corporate productivity.

The tax legislation contains special rules that apply where companies provide their employees with shares, or rights to acquire shares, at a discount. These arrangements are commonly known as ‘employee share schemes’ (‘ESSs’). The tax treatment of ESSs was originally dealt with under s 26AAC ITAA36. However, this provision was replaced by div 13A of pt III ITAA36 (which applied to shares, or rights to acquire shares, acquired from 28 March 1995 to 30 June 2009). Division 13A was subsequently replaced with new rules contained in div 83A ITAA97, which commenced on 1 July 2009.

Chapter 9 discusses the arguments economists make about how the level and changes in the level of education in the labor force affect economic growth, including the basic human capital model with “externalities,” and the endogenous growth model, in which higher levels of education increase the capacity of the society to accumulate new knowledge, which, in turn, increases the rate of return to capital and contributes to higher rates of growth. The chapter also analyzes the important political economic discussions underlying the mechanisms through which higher levels or higher quality of education translate into higher rates of economic growth. One main point in these discussions is whether increased education or higher cognitive skills in the labor force is a key causal factor generating higher economic growth rates by raising labor productivity or the rate of innovation, hence promoting physical capital investment. Alternatively, physical capital investment may be correlated with education and skills in the labor force, but may itself be the driving force behind economic growth.

Chapter 14 reviews the economics and politics of public subsidies/provision of childcare and early childhood education (ECE). Underlying public provision of ECE are complex political issues of family “rights” in raising children and the age at which the State should intervene to “assure” that children are prepared for a productive role as adult citizens. The work of sociologists and economists on social class differences in children’s preparation for school has been part of this reconsideration of when in a child’s development public responsibility for education begins. The chapter presents economists’ case for public investment in ECE in terms of the social benefits to such investment and discusses studies that estimate the benefits, including whether ECE helps to close the socio-economic and race achievement gaps in schools. The chapter also reviews the US and international data on access to ECE, as well as studies that assess which types of ECE are more effective than others.

Chapter 5 analyzes how economists view the returns to human capital investments as age-earnings profiles, especially what such profiles tell us about how individuals invest in skills over their lifetimes and what this implies for the payoffs to such investments. The chapter also introduces the problem of comparability of individuals taking different levels of schooling and whether earnings differences of individuals with different levels of schooling be attributed to the investment in higher levels of educational attainment or rather to other factors, such as higher early academic ability or higher social class – hence better social networks – or the greater discipline or other unobservable attributes of individuals who attain higher levels of education compared to those with lower levels of schooling. Economists call this issue the identification problem. They grapple with it in trying to estimate how much of the differences in earnings for those with different levels of education result from additional skills acquired in school or are the result of other worker characteristics that may affect both level of education attained and earnings.

Business and entity restructures are common in the commercial world. To ensure the tax law does not impede or frustrate such activity, special roll-over and other forms of tax relief are available. Without this relief, these restructures might otherwise give rise to a number of adverse CGT and other consequences for the parties involved. This chapter examines the roll-over relief available for: small business restructures, scrip for scrip takeovers, demergers, disposals of assets to, and creation of assets in, wholly owned companies, exchanges of shares or units in the same company or unit trust, and exchanges of shares or units for shares in an interposed company. In 2019, the Assistant Treasurer announced the Board of Taxation would review roll-over provisions. In February 2020, the Board published a Consultation Guide containing an overview of the provisions and policy considerations evaluating and improving their framework. In December 2020, it published Review of CGT Roll-Overs, seeking submissions to rationalise existing roll-overs dealing with common business restructuring transactions with a single ‘general restructure roll-over’. At the time of writing, the Albanese Government has not indicated whether it plans to make any changes to the rules.

Human rights have an important dual function: they are claims based on particular values or principles and often also legal rights that entail entitlements and freedoms. Philosophical and political conceptions of human rights are broader than international human rights law, which is essentially a normative term referring to rights validated in recognised sources. While the two spheres are closely intertwined, they do not necessarily share a causal or automatic relationship, i.e. that every claim must transform into a legally recognised right. Nor is the relationship always harmonious. A legally recognised right may be defined too narrowly and may therefore exclude certain categories: for example, age may not explicitly fall within the purview of the right to non-discrimination, or conversely a recognised right may be wider than thin theories of human rights based on a limited number of core rights. Theories of human rights abound, including substantive (based on moral values or foundational postulates), formal (constructive, pragmatic, discourse), subaltern (human rights as distinctive practices born out of struggle) and post-modern (empathy for the other) approaches, as well as political theories, such as liberal or socialist notions of human rights. It is in particular the purported universality of human rights, i.e. their applicability to everyone, everywhere and anytime, that has given rise to enduring debates. Those often, somewhat misleadingly, labelled ‘cultural relativists’ have raised important challenges regarding the supposed origins, validity, scope of application and politics of human rights.

Victims’ rights, whether they take the form of a procedural right of access to justice or participation, or a substantive right to reparation, fulfil a number of important functions. Ideally, they allow victims to assert their rights, redress power imbalances manifest in violations, provide a measure of justice and furnish the victim(s) with the means to cope and rebuild their lives. They may also lead to a public acknowledgement of wrongdoing that recognises unlawful suffering, demonstrates society’s respect for, and solidarity with, the victim(s), and affirms the rule of law. In addition, victims’ rights play an important role in contributing to prevention through deterrence (punishment and/or payment of damages or other forms of reparation) and systemic changes to counter violations, such as legislative and institutional reforms. A series of open questions and challenges remain. Do the rights granted in various treaties and declarations translate into a right to reparation under international law, and, if so, does this apply in relation to all or only some particularly serious human rights violations? Who are the rights-holders and what are their entitlements? Recent developments also raise questions of coherence and effectiveness in light of the proliferation of victims’ rights in various bodies of international law.

Chapter 25 describes the expansion and transformation of higher education internationally after World War II and particularly in the developing countries after 1995. The chapter delves into the many theories that attempt to explain this “massification” of access to colleges and universities, from a supply/demand explanation that focuses on the role of globalization and technological change (increasing rates of return to higher education) to ideological/State legitimation analyses. Analyzing such a large change is important, because first, there are competing theoretical explanations of these changes, and second, each explanation makes quite different assumptions about political power and how it is reflected in State action. The final part of the chapter focuses on a key concept that emerges from the discussion of the various theories of expansion and lays the groundwork for studying higher education financing; namely, higher education as a private and public good. It is the highly political nature of this concept, and how it varies across different societies, that infuses our discussion of higher education finance in the chapters that follow.