Abstract:
This study examines the different approaches to tax concessions for political donations in
Australia and Aotearoa New Zealand (NZ). In Australia, a tax deduction may be claimed for
a moderate donation to a political party. Conversely, in NZ no tax concessions are available
for donations to political parties.
The study concludes that while there are several benefits of using the tax system to facilitate
political donations, the two different policies align with the two countries general approaches
to using the tax system to influence behaviour. An analysis of tax expenditures is used to
support this argument. Reference to tax expenditures in Australia shows a longer timeline of
acceptance of tax expenditures, alongside a more comprehensive regime of included
activities. In NZ, the absence of tax concessions for political parties is aligned with NZ’s
general approach to using the tax system to change behaviours, which is minimal state
intervention.
