This article reviews trends in effective marginal tax rates (EMTRs) from 1996–1997 to 2006–2007 for working‐age Australians. Although sweeping income tax cuts reduced effective tax rates for many taxpayers, the extension of income‐tested welfare payments and tax concessions worked in the opposite direction. The proportion of working‐age Australians facing EMTRs of more than 50 per cent increased during the period, from 4.8 to 7.1 per cent, representing some 910,000 Australians. This article also provides the first international comparisons of how the distribution of EMTRs for earners in Australia compares with those prevailing in Europe.
This paper describes the development of a microsimulation model ‗HealthMod' which simulates the use and costs of medical and related services by Australian families. Australia has a universal social insurance scheme known as ‗Medicare' which provides all Australians with access to free or low-cost essential medical services. These services are provided primarily by general practitioners as well as specialist doctors but also include diagnostic and imaging services. Individuals may pay a direct out-of pocket contribution if fees charged for services are higher than the reimbursement schedule set by government. HealthMod is based on the Australian 2001 National Health Survey. This survey had a number of deficiencies in terms of modelling the national medical benefits scheme. The article outlines three major methodological steps that had to be taken in the model construction: the imputation of synthetic families, the imputation of short-term health conditions, and the annualisation of doctor visits and costs. Some preliminary results on the use of doctor services subsidised through Australia's Medicare are presented.
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