Complexity of the tax transfer system

7.11 There may be circumstances where a person decides not to work as it is simply too complex to determine whether it would be more financially advantageous to work or not.[9] Olderworkers noted that in a survey of jobseekers aged over 45 years, a large percentage considered the tax transfer system ‘extremely complex’. It stated that to encourage mature age workforce participation, the Australian Government should ‘develop a much less complex tax-transfer system’.[10]

7.12 Reducing tax system complexity requires systemic and comprehensive reforms, and was a specific focus of the Tax Review.[11] The Tax Review recommended 16 specific reforms to the personal income tax system.[12]

7.13 Another way to address complexity in the tax system is through providing information to mature age persons. COTA stressed the value of ‘easy to understand, clear and concise information’, suggesting a free service to provide accurate information based on individual circumstances.[13] Similarly, the Australian Chamber of Commerce and Industry (ACCI) suggested more ‘promotion of seminars and programs to mature aged [so they can] understand the range of tax benefits available’.[14] Information about income tax—including income tax calculators—is contained on the Australian Securities and Investments Commission’s ‘Moneysmart’ website and the Australian Taxation Office website.[15]

[9] In the Issues Paper, the ALRC asked whether the complexity of the tax-transfer system could be minimised to remove barriers to mature age workforce participation: Question 6. See discussion of system coherence in Ch 1.

[10] Olderworkers, Submission 22.

[11] The Treasury, Australia’s Future Tax System: Final Report (2010), pt 1, vii, Terms of Reference.

[12] Ibid, Recs 2–17.

[13] COTA, Submission 51.

[14] Australian Chamber of Commerce and Industry, Submission 44.

[15] ASIC, Moneysmart website <> at 30 August 2012; ATO website <> at 11 April 2012.