Are Investment Tax Breaks Effective? Australian Evidence

Nu Nu Win, Jonathan Hambur and Robert Breunig
Additional contact information
Nu Nu Win: Australian National University
Jonathan Hambur: Reserve Bank of Australia
Robert Breunig: Crawford School of Public Policy, Australian National University

RBA Research Discussion Papers from Reserve Bank of Australia

Abstract: Using Australian tax and survey data, we exploit discrete eligibility cut-offs to estimate the effect of several business investment tax breaks, including tax credits and instant asset write-offs, implemented over the past 15 years. Policies implemented during the global financial crisis increased investment. Responses are larger for unincorporated businesses, possibly reflecting reduced efficacy of investment stimulus under Australia's dividend imputation system. However, we find mostly no evidence of an effect for other investment policies, including those implemented to address the COVID-19 pandemic.

Keywords: investment; tax incentives (search for similar items in EconPapers)
JEL-codes: D21 D22 G31 H25 H32 (search for similar items in EconPapers)
Date: 2025-02
New Economics Papers: this item is included in nep-cfn, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.rba.gov.au/publications/rdp/2025/pdf/rdp2025-01.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rba:rbardp:rdp2025-01

DOI: 10.47688/rdp2025-01

Access Statistics for this paper

More papers in RBA Research Discussion Papers from Reserve Bank of Australia Contact information at EDIRC.
Bibliographic data for series maintained by Paula Drew (drewp@rba.gov.au).