Tax and superannuation literacy: Australian and New Zealand perspectives

Chardon, Toni and Brimble, Mark and Freudenberg, Brett (2016) Tax and superannuation literacy: Australian and New Zealand perspectives. New Zealand Journal of Taxation Law and Policy, 22. pp. 327-345. ISSN 1322-4417

Abstract

The Australian and New Zealand governments both recognise the economic and social importance of building a financially capable population. In Australia this is recognised through the National Financial Literacy Strategy and in New Zealand through the National Strategy for Financial Capability.1 Both strategies define financial literacy (or capability) as the ability to make informed judgements and effective decisions regarding the use and management of money. One of the main aims of increasing the overall financial literacy of populations is creating an environment where consumers have the knowledge, skills and confidence to protect themselves from financial risk. It is argued that taxation consequences often play an important role in investment decisions and are also a major reason why people seek assistance and advice from professionals. Australian research has found that there are basic concepts of tax and superannuation that are important in the context of overall financial literacy and that there are specific aspects that potentially affect financial decision making which are poorly understood.2
There are a number of fundamental differences in tax and retirement policy between Australia and New Zealand, including that New Zealanders with only salary and wage income are not required to lodge a tax return, that the main superannuation scheme (KiwiSaver) is optional, and that there is broadly no capital gains tax. However, in the context of financial decision making, there are also a number of similarities, particularly in relation to the availability of particular tax concessions for families, those with children, on lower incomes and also in relation to Government provisions for retirement. Much like Australian research, financial capability measures in New Zealand have previously found there may be gaps in the understanding of particular aspects of superannuation but that the targeted approach to building capability appears to be increasing this understanding, particularly in relation to New Zealand superannuation.


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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Permanent restricted access to Published verison, in accordance with the copyright policy of the publisher. Article originally presented at the 28th Australasian Tax Teachers Association Conference: Tax and Time Travel - Looking Backwards and Looking Forwards, Sydney, 20-22 Jan 2016.
Faculty / Department / School: Current - Faculty of Business, Education, Law and Arts - School of Law and Justice
Date Deposited: 23 Feb 2017 00:02
Last Modified: 23 Feb 2017 00:02
Uncontrolled Keywords: financial literacy, tax literacy, taxation policy, new Zealand tax policy
Fields of Research : 18 Law and Legal Studies > 1801 Law > 180125 Taxation Law
Socio-Economic Objective: C Society > 94 Law, Politics and Community Services > 9499 Other Law, Politics and Community Services > 949999 Law, Politics and Community Services not elsewhere classified
URI: http://eprints.usq.edu.au/id/eprint/30443

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