Tax concessions
Various tax exemptions, deductions, offsets, concessional rates and deferral of tax liabilities are
provided for ‘welfare’ purposes. The Australian Government Treasury estimated that tax expenditure
or concessions by the Australian Government for welfare amounted to $40 billion in 2012–13. This
does not include any tax expenditures by states and territories, or local governments. This amount is
not included in the estimates of total welfare spending in this article as it is generally in the form of
forgone potential revenue rather than expenditure.
Most of the tax concessions total ($30 billion, or 74%) was for concessions for superannuation, which
aim to assist older people in their retirement, while $3.5 billion (9%) was for concessions for families
and children (Table S2.1.6). Tax concessions for families and children include those for disaster relief
and the former Baby Bonus.
Australian Government tax concessions for welfare peaked in 2007–08 (Figure 2.1.5). The declines
in concessions in 2008–09 and 2009–10 reflect the effects of the GFC, in particular slower growth in
superannuation returns (Treasury 2012).