Individuals and businesses derive financial benefits from various tax concessions. These concessions are usually delivered by tax exemptions, deductions, rebates or reduced rates. They can either reduce or delay the collection of tax revenue. Tax concessions will influence the allocation of resources to different activities. Direct expenditures (outlays) could equally be used to allocate resources to different activities and deliver the benefits provided by the various tax concessions. For this reason, and noting their direct impact on the underlying budget deficit, these tax concessions are generally called 'tax expenditures'.
The Government has introduced the Charter of Budget Honesty Bill 1996 to the House of Representatives and the Bill is expected to be considered by the Senate in the Budget sittings. A feature of the Charter is the requirement to publish an overview of tax expenditures as part of the budget.