Taxpayers that carry on trading businesses (eg manufacturers, wholesalers and retailers) buy and sell ‘trading stock’. As trading stock is a ‘revenue asset’, buying and selling trading stock is dealt with under the ordinary income (s 6-5 ITAA97) and general deduction (s 8-1 ITAA97) provisions. In other words, subject to the GST reconciliation rules, the proceeds from selling trading stock is assessable under s 6-5 and the cost of purchasing trading stock is deductible under s 8-1.

This chapter examines the meaning of ‘trading stock’ and the general treatment of trading stock under ss 6-5 and 8-1. It also discusses the operation of the special provisions in div 70 ITAA97 that deal with accounting and valuing trading stock.

This chapter focuses on some important aspects of income tax administration. It commences with an examination of the obligation on taxpayers to lodge income tax returns followed by a discussion of the assessment process and the taxation ruling system. The chapter examines the special rules for objecting to assessments and private rulings under pt IVC TAA. It also discusses the limited avenues for challenging assessments outside these rules and various other aspects of tax litigation. The chapter concludes with a discussion of the Commissioner’s audit and investigatory powers and his attitude to tax compliance.

This chapter focuses on the problem of ‘base erosion and profit shifting’ (‘BEPS’). BEPS typically involves large multinational enterprises (‘MNEs’) entering into transactions that exploit gaps, loopholes and mismatches in the tax rules of different jurisdictions in order to artificially shift profits from high to law tax locations. International tax havens are commonly used for this purpose. To help countries tackle BEPS, the OECD implemented the ‘BEPS project’, which has over 100 participating jurisdictions. As a consequence of this project, Australia has introduced several new measures to strengthen its tax system. These measures complement its existing transfer pricing and thin capitalisation regimes. One of the most significant aspects of the BEPS project has been the development of a ‘two-pillar solution on global tax reform’. This initiative aims to re-allocate profits of large MNEs to those jurisdictions where they are earned and ensure that MNEs pay a worldwide minimum corporate tax rate of at least 15%. Australia, like many other countries, is planning to implement this reform. This chapter outlines how the new rules are proposed to operate.

Chapter 21 presents the case for market accountability in education. Market reforms in education are premised on the idea that public education systems run by large bureaucratic organizations and financed by tax revenues will not provide educational services efficiently because they do not face competition from equally subsidized alternative (private) suppliers. The chapter reviews the underlying theory behind this argument, and provides examples of systems that have implemented market accountability in the form of vouchers and charters, focusing on Chile and Milwaukee. It further analyzes evidence on whether, in practice, market accountability seems to work to produce the more efficient delivery of educational outcomes, either because private provision is more effective and efficient than public schooling or because competition for students between private and public schools increases effectiveness and efficiency of the entire education system. At the end of the chapter, we compare the overall evidence on improving student outcomes of State-driven accountability systems and market accountability systems.

In order to properly appreciate the framework in which Australia’s tax laws operate, it is necessary to understand Australia’s system of government and the constitutional setting within which the tax system functions. This chapter discusses how Australia’s federal system of government evolved and how sovereign power is shared between the Commonwealth and states. It also examines the Commonwealth Constitution.

This chapter will analyse the right of self-determination in respect of its external and internal dimension, the rights of minorities and the rights of indigenous peoples. Self-determination is the point of reference for any discussion of indigenous and minority rights, although it is far broader than both of these. Minority rights in turn are not considered collective entitlements in relevant international human rights instruments. None the less, as the reader will come to appreciate, they are not devoid of a collective character altogether. Indigenous rights are largely based on soft law and some of their fundamental premises (for example, land rights) are hotly disputed by interested states. Yet, it is indisputable that the international community recognises that the vulnerable status of indigenous peoples necessitates a distinctive approach based on the adoption of measures that allow the preservation of their culture and traditions, while on the other hand helping them to develop, whether technologically, financially, educationally or otherwise. Group rights are controversial primarily because they give rise to questions of ‘us’ and ‘others’ in addition to challenging traditional notions of state sovereignty.

Section 6-5 ITAA97 provides that a taxpayer’s assessable income includes ‘income according to ordinary concepts’ (called ‘ordinary income’). Section 6-5 is based on former s 25(1) ITAA36, which was rewritten as a consequence of the TLIP rewrite. Like its predecessor, s 6-5 contains different assessment rules for ‘residents’ and ‘foreign residents’. Ordinary income is not defined in the legislation and therefore takes on its common law meaning. Over the years, there have been many cases that have examined this concept. Although the majority of these cases concern former s 25(1), they are equally relevant for the purposes of s 6-5. This chapter discusses the leading Australian cases that have considered the meaning of ordinary income. It also examines a number of foreign authorities that have been influential in the development of the Australian jurisprudence in this field. As ordinary income must be ‘derived’ by a taxpayer in order to be assessable, the chapter also examines what is meant by this term. Section 6-5 operates subject to the other provisions in the legislation.

Tax law contains a myriad of specific deduction provisions for particular kinds of expenditure that might not otherwise be deductible under the general deduction provision in s 8-1 ITAA97 discussed in Chapter 12. This chapter focuses on some common specific deduction provisions. A range of other specific deduction provisions are examined elsewhere in this book (eg Chapter 15 deals with specific deductions under the capital allowance regime and Chapter 19 deals with specific deductions for superannuation contributions). Like the general deduction provision, the specific deduction provisions operate subject to any provisions that deny or limit deductions. These provisions are discussed in Chapter 14.

Most developed countries have policies to ensure that their citizens can rely on some form of income in retirement. Australia has adopted a three-pillar retirement income policy consisting of a publicly funded age pension combined with privately funded compulsory and voluntary superannuation. The object of the three-pillar approach is to ensure that retirement income responsibility is shared between the Government and individuals. The age pension was first introduced in 1909 and is an integral part of the social security system. It is provided by the Government out of public funds on a means-tested basis that takes into account a person’s income and assets. To be eligible to receive the age pension, a person must meet residency requirements and have reached the qualifying age pension age (67 years from 1 July 2023). The age pension is a ‘safety net’ designed to ensure that aged persons have sufficient income to enjoy a minimum standard of living in retirement. It is intended to cover people with low incomes and insufficient retirement savings. Superannuation is a heavily regulated private savings scheme.

The income tax legislation contains special provisions that deal with the taxation of various kinds of termination, unused leave and related payments made to employees and certain other persons (eg their dependants). The special rules treat certain payments (or components thereof) as non-assessable non-exempt income and other payments (or components thereof) as assessable income. To the extent that a payment is assessable, it may be subject to a tax offset, which ensures that the rate of income tax on the payment does not exceed a specified maximum rate. The ML is also generally payable in respect of assessable payments. To prevent overlap with the FBT regime, no FBT is payable in respect of the payments discussed in this chapter as they are all expressly excluded from the definition of fringe benefit (ss 136(1)(la), (lb), (lc), (ld), (le) FBTAA).

Tax avoidance is one of the most controversial and widely debated topics in taxation law. This chapter examines the concept of tax avoidance and distinguishes it from the concepts of tax evasion and tax planning with which it is sometimes confused. It also discusses various judicial and legislative responses to tax avoidance. In particular, it focuses on the specific anti-avoidance provisions in div 6A of pt III ITAA36 and pt 2-42 ITAA97, which have been enacted to address certain income alienation schemes designed to divert income from taxpayers who are subject to high rates of tax to their associates (eg family members and related entities) who are subject to lower rates of tax. It also discusses service entity arrangements, which have been used by some professional firms to split income.

This chapter examines the various mechanisms within the United Nations that deal with human rights. The chapters focus is on the Universal Periodic Review mechanism, but in the process addresses the work of the UN General Assembly, the human rights function of the Security Council through its peace and security mandate, and crucially also of the revamped Human Rights Commission. The chapter looks at the history of its predecessor and assesses how we arrived at the current architecture. The chapter examines specialized procedures, as well as the work of thematic rapporteurs and human rights working groups.

As a continuation of the overall introduction to the book, Chapter 2 summarizes the main contributions of economics to understanding the role of education in society and to educational policy. The chapter details these contributions in three parts: (1) economists have demonstrated that education has an important economic dimension (that it has economic value), and they have inserted education policy near the center of the debate on economic development and material well-being; (2) they have formalized concrete models of student learning, both in and out of school, and have developed models of educational production, in which schools, districts, and states are economic decision units, allocating resources to produce educational outputs – and where incentives and resource allocation decisions affect the productivity of teachers and student learning, economists have been able to model a number of strategies that increase output and test them empirically; and (3) economists have also been at the forefront of applying new and increasingly sophisticated statistical techniques to estimate quantitatively the causal effects of various educational policies on student academic outcomes and adult economic and social outcomes.

Civil and political rights emerged out of fundamental rights conceptions protecting life, integrity, liberty and opinion of a person against an overbearing state. Rights such as the right to life and freedom from ill-treatment may also be at risk from other sources, namely non-state actors in the domestic and other spheres, which have taken on a growing importance in the wake of states’ withdrawal from public functions. While international human rights standards have been developed to provide adequate protection in these circumstances, their implementation requires certain structures without which it is unlikely that core civil and political rights can be effectively protected. There are deep-seated structural factors that can, and have, undermined the effective protection of rights in all systems. Social exclusion, inequality and discrimination in particular are prone to significantly increase vulnerability, as evident in the higher likelihood of persons from certain ethnic or class or national backgrounds being subject to arbitrary arrest, detention, ill-treatment and other violations. Against this background this chapter identifies the normative content of the right to life, the prohibition of torture and other cruel, inhuman or degrading treatment or punishment (other ill-treatment), the right to liberty and security, the right to a fair trial and qualified rights, particularly freedom of expression, and examines the challenge of ensuring their effective protection.

The vulnerability of children is rather different from that of other vulnerable groups, in that at different stages of their development they are mostly dependent on others for their survival and cannot (or are not allowed to) partake in social or political life in the same way as adults. Unlike all other vulnerable persons, the well-being of children is entrusted to their parents and guardians and hence many of the issues facing children have traditionally been perceived through the lens of family relationships and family law, as opposed to human rights law.The Convention on the Rights of the Child (CRC) and its subsequent protocols has somewhat changed this state of affairs by introducing several principles which transform children from objects to real subjects of the law. Unless states take active and concerted measures to prevent and punish the perpetrators (and end-users) of such offences, the exploitation of children will remain a profitable enterprise. Without investment in the lives of children through the use of maximum available resources, states will remain weak and children disempowered. This chapter examines the emergence of a specialised human rights regime for children, as well as the guiding principles found in the CRC. It then goes on to illustrate how poverty and other factors exacerbate the vulnerabilities of children.

Chapter 19 discusses the politics of teacher labor markets, including an analysis of the role of teachers’ unions and of two strategies to improve teacher quality – raising teacher salaries to recruit and retain “better” teachers versus raising the quality of teacher education and professional development. The discussion includes an analysis of local monopsony of local school districts in the market for teacher services and local monopolies of teacher unions, a discussion of the possible impact of teachers’ unions on student performance, as well as a comparison of how effective higher teacher salaries in the United States and elsewhere may impact the quality of teacher supply. The chapter concludes with a review of how teacher education programs do or do not influence the quality of teacher supply, and what the elements of good teacher professional development programs appear to be, according to recent empirical studies.

As will become evident through the course of this chapter, development in its human rights context is primarily a value that translates into individual and communal well-being. This well-being may be linked to industrial or other financial development, although the correlation between the two is neither self-evident nor necessary. If this right to well-being is to make a difference in the lives of people, whether in poor or rich nations, it must be susceptible to quantifiable measurement through which one is able to assess its progress and realisation. In the last decade experts have developed a list of detailed indicators which allow us to assess well-being more accurately. At the same time, wealthy nations have abandoned ad hoc unilateral efforts to assist their poorer neighbours to escape perpetual cycles of poverty by entering into institutionalised multilateral commitments to contribute part of their annual earnings to developmental goals. These goals are also vigorously pursued by multilateral development banks, such as the World Bank and the African Development Bank.