bluuebunny/crossref_metadata_2025 huggingface dataset:
The Money Supply in Australia: Prospects for 1984‐85
Authors: Lim G.C.
Published: January 2008

The monitoring and control of the growth of monetary aggregates is an important aspect of monetary policy. The purpose of this article is to assess the likely growth of the money supply for 1984‐85. We conclude that the monetary policy of keeping M3 growth within the 8–10 per cent range is attainable and that this can be achieved through the use of open‐market operations without creating undue pressure on interest rates.
Continuity and Change: Labour Market Programs and Education Expenditure
Authors: Chapman Bruce
Published: January 2008

Since 1971 Australian governments have varied expenditure on labour market programs and education. This article attempts to explain these changes in the context of several straightforward hypotheses concerned with political processes. In both policy areas the evidence is generally consistent with four views: that ALP governments spend relatively more than coalition governments; that ALP expenditure is more likely to be directed to the public sector, and coalition expenditure to the private sector; that governments of both political persuasions tend to move towards their opponents' position in budgets immediately preceding elections; and that, after the marked changes initiated in the 1972 to 1974 period, the parties have become increasingly similar in expenditure terms. Apparently there have been important differences between the political parties in government, but these distinctions have become less clear–cut over recent years.
Policy Analysis Using a Computable General Equilibrium Model: A Review of Experience at the IMPACT Project
Authors: Parmenter B. R. , Meagher G. A.
Published: January 2008

Originally presented at the Fourth International Symposium on Forecasting, London, July 1984, this article reviews the role in policy analysis of the ORANI model of the Australian economy. A schematic description of the model is given. Conceptual issues concerning the use of such models for counterfactual policy analysis and for explicit forecasting are canvassed. A taxonomy is presented of policy applications of ORANI classifying both the policy issues addressed and the range of information obtained from the applications. Details of selected applications are discussed with the aim of illustrating the main themes which arise in policy studies conducted using the model.
Structure and Design of the Fringe Benefits Tax
Authors: Marks Bernard
Published: January 2008

The aim of this article is to provide an introduction for economists to the legal structure of the fringe benefits tax legislation. The article is not concerned with the analysis of the provisions of the legislation, but, rather with the design rules employed by the drafters in implementing the Government's policy to impose a tax on employers on non‐cash fringe benefits provided to employees.
FBT: How to Structure Remuneration Packages for 1986–87
Authors: Martini Christine , Collins Brett , Rickard John
Published: January 2008

The purpose of this article is to determine the optimal structure of remuneration packages in the new fringe benefits tax (FBT) environment. We will describe precisely how the optimal structure of remuneration packages depends upon the (marginal) rates of FBT, personal income tax and corporate tax. The fundamental decision rule for employers and employees to optimise the value of remuneration packages is quite simple. First substitute the FBT rate, f, and the employer's marginal tax rate, t, into I = f(1 + f ‐ t)‐1. Then if the employee's marginal tax rate i is greater than I the employer should provide any benefits until i falls to the value I. At or below this point the employee would be better off to provide all subsequent benefits.
The J‐Curve
Authors: Arndt H. W. , Dorrance G.
Published: January 2008

If a country with a balance of payments problem, that is, insufficient foreign exchange receipts to meet foreign exchange requirements, seeks to remedy the situation by currency devaluation, things may get worse before they get better. This so‐called J‐curve effect occurs if the domestic‐currency prices of exports are sticky, whether because they are cost based or subject to longer term contracts, so that export prices in foreign currency fall. Until favourable volume effects outweigh the unfavourable price effect, the balance of payments deteriorates. Such a J‐curve effect should be distinguished both from the longer term erosion of the beneficial effects of devaluation as domestic costs and the prices of non‐tradables rise and from the apparent J‐curve due to the ‘valuation effect’. If the current account is in deficit before devaluation, as will usually be the case, devaluation will widen the deficit in domestic currency because domestic‐currency imports rise by a larger amount than exports. This is a pure valuation effect, of no significance for external balance. But it is liable to lead to unduly pessimistic judgements about the effectiveness of devaluation. In Australia during 1985–86, the current account deficit increased by $A3.5 billion, despite substantial depreciation of the $A. The main reason was a sharp deterioration in the terms of trade which is estimated to have worsened the current account by $A4.25 billion. Most of this was exogenous, though J‐curve effects may have made a contribution. In addition, the valuation effect contributed a further, illusory, widening of the deficit, valued in domestic currency, by over $A1 billion. To avoid misleading inferences from the valuation effect, it is suggested that the balance of payments should, if possible, be presented in foreign currency.
A Spectral Analysis of Australia's Leading and Coincident Indexes of Cyclical Economic Growth
Authors: Layton Allan P.
Published: January 2008

Using the methodology of the National Bureau of Economic Research, Boehm and Moore (1984) have recently constructed leading and coincident indexes of Australian cyclical economic growth. The present article examines the reliability of the leading index by investigating the coherence between these two measures of economic activity at different cycle‐lengths using the technique of cross‐spectral analysis.
An Analysis of the Effects of Recent Changes in the Exchange Rate and the Terms of Trade on the Level and Composition of Economic Activity
Authors: Fallon John , Thompson Lynne
Published: January 2008

Over the eighteen‐month period ending June 1986, the Australian economy experienced two major shocks: a nominal devaluation of the $A of some 28 per cent and a terms of trade decline of some 16 per cent. The effects of these influences are examined using the ORANI model of the Australian economy. The effects of the devaluation on selected macroeconomic variables and key sectoral variables are presented for various degrees of wage indexation. Effects on quota rents are calculated and compared with actual outcomes. The terms of trade decline has an adverse impact on the balance of trade and in order to offset this impact while maintaining aggregate employment demand the model calculates that both real wages and real absorption would need to be around 4 per cent less than the values they would otherwise take.
The Performance of Exchange Rate Forecasts
Authors: Lowe Philip W. , Trevor Robert G.
Published: January 2008

Since the floating of the Australian dollar the forecasting of exchange rate movements has become more difficult and received much more attention. As a result, some participants in the foreign exchange market have, on a number of occasions, come under criticism for their inability to predict exchange rate movements. This article seeks to evaluate these criticisms through an examination of exchange rate forecasts made by market participants (as published in the Australian Financial Review from March 1985 to December 1985). The accuracy of the $A/US$ forecasts is compared with that of forecasts generated from a number of simple forecasting rules as well as forecasts of the US$/Yen exchange rate. In general, the simple forecasting rules provide superior forecasts to those provided by the individual market participants. However, under some criteria, the mean of the individual participants' forecasts may be preferred to these simple forecasting rules. Further, the comparison of the US$/Yen forecasts with the $A/US$ forecasts shows the former to be generally more accurate.
The Distribution of Wealth: What Is It, What Does It Mean, and Is It Important?
Authors: Piggott John
Published: January 2008

This paper summarises the available evidence on the present‐day distribution of wealth in Australia, and draws comparison with international evidence. With this as background, I argue that an initiative to collect more up‐to‐date information on Australia's wealth distribution would be most useful if it focused on the least wealthy 90 to 95 per cent of the population, even though this group probably owns not more than half the nation's wealth.
Structural Reform, Macro Policies and Income Distribution
Authors: Agrawal Nisha , Meagher G. A.
Published: January 2008

Since the mid‐1980s, Australia has been under considerable pressure to restructure its economy. This restructuring has been necessitated by the need to generate surpluses in its external trade account in order to meet the growing interest payments on its foreign debt. To facilitate this process of restructuring, the Commonwealth Government initially used two macro policies that have the desired structural effects: ‘wage moderation’ and ‘fiscal management’. In this paper, we examine the distributional effects of these policies. The analysis depends on simulations using an extended version of the ORANI model of the Australian economy, taken in conjunction with unit record data from an updated version of the 1981–82 Income and Housing Survey database.
The Development of Government Policies on Poverty and Income Distribution
Authors: Edwards Meredith , Whiteford Peter
Published: January 2008

This paper discusses trends in poverty in Australia over the last two decades, as indicated by changes in the number and composition of income units with incomes below the Henderson poverty line as well as by trends in the circumstances of the population in receipt of social security payments. This analysis suggests that there have been significant changes in the nature of poverty in Australia, which has increased among those of workforce age. Families with children have been particularly affected by these developments. The paper describes the development of policies designed to achieve the government's pledge that by 1990 no child need live in poverty. Despite the usefulness of the Henderson poverty line in identifying trends in economic vulnerability, the paper identifies a number of practical objections to using this indicator to assess the total effect of government initiatives. The paper concludes with a discussion of a broad approach to poverty alleviation, which would include income support, labour market and community services policies.
Sources of Inequality Between Male and Female Wages in Australia
Authors: Agrawal Nisha
Published: January 2008

This article examines the influence of labour force status, full‐time/part‐time employment status, educational qualifications, work experience, and occupation as sources of inequality between male and female wages in Australia. A decomposition method is used to identify the effect of these factors on male/ female inequality. This strategy involves successively removing persons who differ with respect to each of these factors from the population under study and then decomposing the inequality in the remaining sub‐population into inequality within each sex and inequality between the sexes. This decomposition is done using the I0 inequality index proposed by Theil (1967). The study is based on unit record data from the 1981–82 Income and Housing Survey conducted by the Australian Bureau of Statistics. It finds that a significant proportion of the inequality between the wages of the sexes can be explained by their differences with respect to the factors listed above.
Is the Current Account Deficit Sustainable?
Authors: Makin A. J.
Published: January 2008

This article argues that Australia's savings behaviour relative to its investment opportunities ensures a structural current account deficit which is fundamentally sustainable. In fact considerable scope seems to exist for it to widen further, irrespective of fiscal tightening that has occurred during the last few years, without alarming macroeconomic consequences.
Measuring Exchange Rate Uncertainty: The Case of the Australian Dollar 1969 to 1987
Authors: Avenell Simon , Leeson Robert , Wood Gavin
Published: January 2008

In this article indices of exchange rate uncertainty are measured from the perspective of potential impacts on trade flows. Empirical evidence based on movements in the Australian dollar spot rates and forward rates indicates that there has been an increase in currency risk between 1969 and 1987, which is not surprising given the progressive relaxation of the exchange rate regime during this period. More surprising is the finding that exchange rate uncertainty indices have risen relative to domestic financial price uncertainty indices. This would not have been expected to occur if increased currency risk had been solely due to growing instability of the underlying economic environment. However, since there is evidence that currency risk has been offset by domestic risk, the risk burden of diversified international traders may not have been adversely affected.
Pricing for Capacity Utilisation with Public Enterprises
Authors: Mayo Wayne
Published: January 2008

Pricing Individual services provided by public busines enterprises so that the use of available capacity is, where possible, maximised during peak as well as slack demand periods will for many enterprises correspond closely to ideal marginal cost pricing. Such a pricing strategy will usually result in excess profits when the level of capacity is deficient and in losses when capacity is excessive. Optimal long‐run capacity can thus be sought under this pricing strategy by increasing or reducing capacity over time with a view to achieving normal profits or a target rate of return. In the short run, before capacity can be changed, enterprise profits are driven by the pricing strategy, not by the target rate of return. For enterprises with large lumpy investments it is particularly important for the rate of return objective to be achieved over several years, allowing for reduced returns when new lumpy capacity is first introduced. For enterprises whose services involve significantly increasing congestion costs before full capacity is reached, pricing to achieve something less than full capacity utilisation is required but technological advancement is reducing the relevance of this complication.
The Macroeconomic Consequences of Long‐Term Unemployment
Authors: Flatau Paul , Lewis Philip E. T. , Rushton Allison
Published: January 2008

This article examines the linkages between long‐term unemployment and two important recent debates in Australia: first, whether unemployment exhibits hysteresis tendencies; second, the nature of the relationship between unemployment and real wages. Our findings favour the hysteresis account in that the evidence rejects an equilibrium relationship between long‐term and total unemployment. Also, the effect on real wages of an increase in the number of longterm unemployed is found to be both positive and significant.
The Social Opportunity Cost of Consumption for Australia, 1960–61 to 1988–89
Authors: McDonald Ian M. , Tacconi Luca , Kaur Ravjeet
Published: January 2008

The social opportunity cost of consumption (SOCC) for an economy is the rate at which current consumption can be traded for consumption in the future. The SOCC is an important determinant of the socially optimal levels of investment and the current account surplus and should be an input into the framing of government economic policy. Using overseas interest rates, the SOCC for Australia is calculated in this article. The calculated series is fairly constant for the 1960s and then has a pronounced cyclical pattern from the late 1960s to 1988–89. The average value of the SOCC for Australia is about four per cent.
The Macroeconomic Outlook
Authors: Murphy C. W.
Published: January 2008

This quarterly two‐year forecast from the Access Economics Murphy (AEM) model updates that presented in the corresponding article in the 4th quarter 1991 issue of the Australian Economic Review.

As predicted in the previous forecast, the economy entered a slow recovery in the December quarter of 1991. Steady growth averaging close to 1 per cent per quarter is likely during 1992–93 and 1993–94.

Unemployment may peak at around 10 3/4 per cent in mid‐1992, before slowly falling to a year‐average level of around 9 per cent in 1993–94.

Under the influence of the recent recession, CPI inflation is likely to be around 2 per cent per annum on a year‐on‐year basis for both 1991–92 and 1992–93. With economic recovery, it is forecast to rise to 4.5 per cent per annum in 1993–94.

While the recession has helped bring the current account deficit down from near 6 per cent of GDP in 1989–90 to around 3 per cent for 1991–92, it will rise with economic recovery, and is forecast to exceed 5 per cent of GDP by 1993–94, compared with a sustainable level of 3 to 3 1/2 per cent.

The economic recovery is not proving to be as strong as forecast in One Nation.

However, there is a recovery clearly underway, and any further easing of monetary and fiscal policy risks prejudicing a substantial part of the recent impressive gains on inflation and creates a major medium‐term problem for public finances.
Revenue and Progressivity Neutral Changes in the Tax Mix
Authors: Greedy John
Published: January 2008

There has been much debate about the redistributive implications of a consumption tax and the treatment of low income households. This article presents a general model which allows for the interdependence between income and consumption taxes, while allowing for transfer payments to the low paid. The appropriate adjustment of transfer payments in response to a change in the tax mix, in order to maintain a fixed real value of transfers, is examined. The use of exemptions, of those goods for which the proportion of expenditure falls as total household expenditure rises, in order to increase the progressivity of consumption taxes is also considered. The model enables changes in the tax mix, which are both revenue and progressivity neutral, to be devised.
Optimal Investment in Urban Drainage: A Framework for Cost‐Benefit Analysis
Authors: Ng Yew‐Kwang
Published: January 2008

This article addresses some basic issues (including distributional weights, discount rates, and the value of life) in the cost‐benefit analysis of urban drainage and provides a framework for the estimation of the optimal amount of investment for flood mitigation. This involves: (i) estimating the expected total damage from flooding in present‐value terms before flood mitigation; (ii) deriving the reduction in expected total damage as the average recurrent interval of flooding increases; (iii) estimating how this interval increases with the amount of investment in flood mitigation; and (iv) choosing the optimal investment by equating marginal benefit and marginal cost. The framework is also applicable to other accident or damage mitigation investments and some issues discussed are relevant to all types of cost‐benefit analysis.
Year Twelve Economics Examination: Five Answers to Macroeconomic Questions
Authors: Norman Neville
Published: January 2008

In preparing these essays, I sat before a keyboard on a single (long) day, and made a selection under examination conditions of the essays I would prepare, then allocated some 45 minutes each, checking only the word count as I went, aiming for about 1000 words for each essay. I had no notes, texts, tables or other information with me, but I did take breaks between essays. I have done no editing for expression, dates or data since my time expired, but I have added (most of the) endnotes since then, and fixed some terrible typing errors caused by the pressures to which most candidates should easily be able to relate. I tried to write as an advanced teenager with good knowledge of the subject. The essays were selected not merely to maximise my ‘marks’ in any sense, but to cover a wide range of macroeconomic principles and their application to Australia.
The Macroeconomic Outlook
Authors: Murphy Chris
Published: January 2008

This two‐year quarterly forecast from the Access Economics Murphy (AEM) model updates that presented in the 2nd quarter 1992 issue of the Australian Economic Review.

The economic recovery is patchy, with only public final demand and housing investment moving forward decisively, but could broaden in 1993, if private business fixed investment begins increasing. It has fallen by a recession‐inducing one‐third since the middle of 1989.

GDP growth could rise from a mediocre 2.4 per cent in 1992–93 to a strong 4.3 per cent in 1993–94.

Unemployment may remain around 11 per cent for the remainder of 1992–93, before falling to a year‐average level of about 10 per cent in 1993–94.

CPI inflation under 2 per cent per annum on a year‐on‐year basis is likely in 1992–93 but, with economic recovery and the flow‐through effects of the depreciation, it is forecast to rise to 4 per cent per annum in 1993–94. The current account deficit is rising with economic recovery, and by 1993‐94 could be 5 per cent of GDP, compared with a sustainable level of 3 to 3.5 per cent.

An assessment of the accuracy of the AEM model and government official economic growth forecasts in the recession years of 1990–91 to 1992–93 was conducted, using the forecasts from the Business Review Weekly's panel as a reference point. The high accuracy ranking of the AEM forecasts is consistent with international evidence that the most accurate forecasts are model‐based with judgmental adjustments. The official forecasts met international standards of accuracy from 1978–79 to 1989–90, and the recent fall in their performance is puzzling.
Until the End of Time: Labour Market Reform in Australia
Authors: Sloan Judith
Published: January 2008

While it is widely acknowledged that labour market reform is a necessary ingredient of the strategy to make the Australian economy world‐competitive, there are divergent views on what the nature of the reform process should be. The changes being currently implemented and mooted may not provide the basis for strong productivity growth; holistic enterprise bargaining and voluntarist labour market arrangements are required.
Year Twelve Accounting Examination Answers
Authors: Hilton Ian H.
Published: January 2008

I received with interest the papers from the tertiary entrance year from a number of states. There is a similarity of content but a wide difference in the presentation of the papers—one of eight pages; one of forty pages (this one is the full paper—spots for answers provided); and one state with Papers J and 2. I selected the type of problem that seemed to be generally set in most states.
Learning to Ride the Third Wave
Authors: Blandy Richard
Published: January 2008

This is the Inaugural Address of the Director and Ronald F. Henderson Professor, Institute of Applied Economic and Social Research, University of Melbourne, delivered at the University on 2 December 1992.
The Macroeconomic Requirements for Prosperity
Authors: Parkin Michael
Published: January 2008

This article presents a macroeconomic manifesto for prosperity. The main macroeconomic obstacles to prosperity are rent‐seeking and policy variability and uncertainty. The main proposals for overcoming these obstacles are the creation of three new independent and publicly accountable economic policy institutions: an Independent Monetary Authority, a National Externalities Board, and an Economic Policy Audit Authority. Working with parliament, these institutions would provide an incentive system of checks and balances in which the principles of free trade, price stability, and policy stability would moderate rent‐seeking and provide an environment in which markets could function to deliver a high level of prosperity. A related proposal is the replacement of all existing taxes with just two taxes: a flat rate Consumption Tax to cover government purchases; and a National Dividend Tax to pay for a fixed benefit to all, the rate of which would be determined by a novel method of direct democracy.
Australian Student Loans
Authors: Chapman Bruce J. , Harding Ann
Published: January 2008

The Australian Government introduced the so‐called ‘AUSTUDY Supplement’ in the 1992–93 budget. The scheme gives AUSTUDY recipients the option of trading in up to $2000 per year of their grant for $4000 of an income‐contingent loan, to be paid back according to the current HECS arrangements, implying that the Government is acting as an insurer against future default by students. This article addresses the theoretical basis of the scheme, and explores two related questions: will it be in the financial interests of average students to take up the option? and what is likely to be the take‐up rate of loans? Through the use of both cross‐sectional data and the HARDING microsimulation model it is demonstrated that for many students the loan option will result in financial advantages, and that the take‐up rate is likely eventually to be high.
The Role of Government Assistance in Structural Change in Manufacturing: Australian Evidence
Authors: Harris A. H. , Wood G. A. , Armstrong T.
Published: January 2008

By the 1970s the Australian manufacturing sector was, by OECD standards, small, fragmented and inward looking. Successive Australian Federal Governments have since responded by progressively reducing levels of assistance to manufacturing in an effort to promote structural change. In this article we investigate whether these lower levels of assistance have accelerated the pace of structural change by estimating an empirical model using a pooled cross‐section time‐series data set. Our results suggest that reduced levels of assistance to manufacturing have had a positive impact on the pace of structural change in the Australian manufacturing sector. In addition, we find that taxes on factor inputs can be expected to impede structural change, and it would appear that structural change proceeds at a faster pace in more specialised manufacturing sectors.
Immigrants and the Use of Government Transfer Payments
Authors: Maani S. A.
Published: January 2008

This article examines the use of government benefits and allowances by Australian immigrants relative to their native‐born counterparts. The study extends the Australian literature by employing micro‐level (Australian Longitudinal Survey) data, controlling for a number of relevant variables including first or second generation immigrant status and the nature of transfer payments received. The data on young adults employed in the study provide a comparable population for examining the relative use of benefits among those of similar age, allowing comparisons based on only the relevant types of benefits. The results consistently reject the hypothesis that immigrants are disproportionately using benefit payments and thereby imposing a burden on public funds. These results are of interest, especially since Australia is already a major immigrant‐receiving country, and since the Australian welfare system is more extensive in its coverage than most other immigrant‐receiving countries.
Professorial Rankings of Australian Accounting Departments
Authors: Brownell Peter , Godfrey Jayne
Published: January 2008

This article presents the results of a survey of professors in accounting departments in Australia. Professors ranked Australian accounting departments on a variety of research, teaching and staffing attributes, on contributions to the accounting profession and provided an overall ranking of the departments. Overall rankings placed the University of Queensland and the University of New South Wales a close first and second, followed by the University of Sydney, the University of Melbourne, the University of Western Australia, and Monash University. Analysis of the separate sub‐dimensions of performance shows that it is variations in respondents' perceptions of research‐related performance of departments which accounts for variation in the overall ranking.

We also asked the professors for their views on several issues facing accounting educators and those who recruit accounting graduates. Most believed that there should be more breadth in undergraduate accounting courses than is currently the case. However, most felt that recruiters would prefer degree structures to remain as they are. There was overwhelming consensus that it was reasonable to expect ethics to be taught in accounting programs; that the Australian Securities Commission should not replace corporate management in the appointment of auditors; and that accounting standards should not be written to force very conservative depictions of profitability and financial position. There was disparity of opinions on whether auditors ought to be expected to foreshadow financial distress; whether the audit role should be expanded to explicitly embrace fraud detection; and whether financial reports should be understandable to the lay person.
Credit Supply and Demand and Business Investment
Authors: Blundell‐Wignall Adrian , Gizycki Marianne
Published: January 2008

Abstract

The article explores the lending behaviour of financial intermediaries over the business cycle in the light of theories emphasising agency costs. During a credit crunch loans from financial intermediaries are unobtainable at any price, and so credit may have a causal influence over economic activity. Tests of this do not find evidence of credit constraints following financial deregulation. However, since both loan supply and demand are driven by forward‐looking variables, business credit is a useful leading indicator of nominal investment.
Privatisation in Russia Has Led to Criminalisation
Authors: Intriligator Michael D.
Published: January 2008

Abstract

Russia has recently embarked on a dramatic program of privatisation as part of the process of shock therapy which aims to convert the command economy to a market economy. This program has been undertaken in the absence of a well‐developed set of institutions needed for the proper functioning of a market economy. These institutions include a legal system, a related system of property rights, a credit system, a system of commercial banks, classified advertising, an accounting system and others including a sound currency and a social safety net. In the absence of these institutions the incentives facing agents in economic transactions have been perverted. This has led to criminalisation of the economy, dramatic falls in production, loss of confidence in all aspects of commerce, and political instability. The recent Russian experience of privatisation has important lessons for other economies in transition, for developing economies and for economic theory.
The Relationship between Sole Parents and Income Support
Authors: Lambert S. F.
Published: January 2008

Abstract

Aside from growth in the aged population, the rapid growth in numbers of sole parents is the most marked demographic change to have occurred, not only in Australia, but right across the western developed world. The high prevalence of sole parent welfare dependence marks this change as a major social policy issue, at the centre of which is the role played by sole parent income support programs. This article discusses this issue and makes the argument that the growth in numbers of sole parents and the rate of sole parent welfare dependence has not been significantly affected by the size and structure of government provided income support.
Managing the Transition to Competition: The International Air Services Commission
Authors: Findlay Christopher , Round David K.
Published: January 2008

Abstract

The aim of the International Air Services Commission (IASC) Act is to promote competition in Australia's international air transport markets. Its role is to allocate new capacity, made available by negotiation of bilateral air services agreements, between incumbent airlines and entrant applicants. The IASC faces a number of dilemmas. It has to operate on the basis of country pairs whereas airlines operate, and competitive outcomes are determined, in country groups or networks. The IASC is also required to apply criteria which confuse means and ends. Most importantly, its objective is pro‐competitive but it has at its disposal only one instrument for that purpose, the allocation of capacity, which may not be the most appropriate instrument for achieving that goal. In the longer run, these dilemmas will be resolved by a movement to a more competitive market and deregulation of air transport capacity. In the meantime, suggestions are made about the weight which the IASC should put on the competition criterion; a simplification of the assessment of applications for capacity; and the IASC's relationship with the Trade Practices Commission.
The Impact of Industry Restructuring from 1971 to 1991 on the Employment Experience of Demographic Groups
Authors: Ackland Robert
Published: January 2008

Abstract

In this article, an empirical measure devised by Bonnell and Dixon (1983) is used to calculate the impact of structural change on the employment opportunities of males and females of different birthplace groups over the period 1971 to 1991. The measure calculates the percentage change in the employment of a particular demographic group1 which would have occurred over the period 1971 to 1991, allowing for changes in the industry composition of employment, but holding constant both total employment growth and the group shares of employment in each industry. It is found that structural change had a greater negative impact on the employment opportunities of immigrants from non‐English‐speaking backgrounds (NESBs), compared with its impact on the employment experience of other birthplace groups.

However, further analysis which allows for the group shares of employment in each industry to vary suggests that the direction and degree of inter‐industry mobility have an important influence on the effect of structural change on the employment opportunities of different groups. It is found that the apparent labour‐market disadvantage experienced by people from NESBs in response to structural change is in fact offset by their revealed capacity for inter‐industry mobility from declining to growing industries.
Mark‐up Pricing and the Forward Shifting of the Corporate Income Tax
Authors: Daly Kevin , Hart Neil
Published: January 2008

Abstract

The framework used to test the hypothesis of forward income tax shifting is based on a simple mark‐up pricing model and follows the methodology of Beath (1979). In this framework indications of forward tax shifting are inferred if the gross mark‐up varies in order to achieve a targeted net of tax mark‐up. Empirical results derived support the hypothesis and suggest significant forward corporate income tax shifting in Australian manufacturing companies over the data period 1968 to 1990.
Measuring Saving Intentions
Authors: McDonnell John , Williams Ross
Published: January 2008

Abstract

A need has long been expressed for up‐to‐date information on householder plans for saving, both quantity and type. This article surveys the international work done on ascertaining householder intentions and then proposes a group of nine specific questions to be put to Australian households with the aim of developing a useful Index of Saving Intentions along with information on household asset allocation. Full development can only be accomplished ex post when results can be correlated over time with various savings measures. It is intended that the Index assist in forecasting household behaviour, the allocation of savings across assets and that it will permit more rapid evaluation of the effects of government policy changes in areas such as taxation and superannuation. Results from initial surveys are presented.
Explaining the Timing of Australia's Manufactured Export Boom
Authors: Menzies Gordon
Published: January 2008

Abstract

This article seeks to explain some of the recent growth in Australia's manufactured exports using a sunk cost model. It is shown that a shock to the economy can cause a sudden and permanent increase in exports. Results from a sample survey suggest that the increased export orientation of Australia's manufacturing sector may persist, even if the recent economic shocks faced by exporters are reversed.
Does Privatisation Pay?
Authors: Quiggin John
Published: January 2008

Abstract

Privatisation has become a popular policy since 1980, particularly for governments facing difficulty in raising revenue. However, there has been no consistent attempt to estimate the impact of privatisation on the net fiscal position of the public sector, or even to consider how such an estimate might be made. The object of this article is to consider the implications of privatisation from a fiscal perspective.

Privatisation automatically reduces budget deficits in the short and medium term. However, this apparent benefit reflects the generally defective nature of the budget deficit as a measure of public saving.

In this article, case studies of a number of actual and proposed privatisations are presented. In each case it is shown that the savings in public debt interest associated with privatisation are insufficient to offset the loss to the public sector of the earnings of the enterprise concerned. In many cases, the sale price is around 50 per cent of the present value of the stream of earnings foregone. This suggests that the loss in public sector net worth is as large as, or larger than, the sale price.
The Role of the Media in the Formulation of Economic Policy
Authors: Gittins Ross
Published: January 2008

This article examines and comments on the reporting of economic news in the Australian media, the influence on that reporting of media judgments about newsworthiness, the relationship between economic reporting and the financial markets, and governments' use of the media in the economic policy process. Finally, it focuses on the role of economic commentators in the quality press, their relations with the bureaucracy, their part in the rise of economic rationalism and the nature of their influence on the formulation of economic policy. It concludes that when the commentators as a group take up causes and pursue them over sustained periods, they help to create a climate of elite option which emboldens governments to undertake politically difficult policy reforms.
The Determination of Common Law Awards to Injured Workers
Authors: Wooe G. A. , Morrison D. L. , Harrison J. , Macdonald S.
Published: January 2008

Prior to changes in the Western Australian legislation in 1993 an injured worker could sue his or her employer for damages at common law irrespective of the seriousness of injury or size of damages. A common law action is conditional on the personal injury being sustained during the course of employment, and caused by the negligence or breach of statutory duty of the employer. In recent years there has been concern expressed about the efficacy of the common law process in providing injured workers with awards that match their pecuniary and non‐pecuniary losses. We address this issue by developing a model of the determination of common law awards in which we assume pre‐trial settlement. We find that the economic mechanisms which bring plaintiff and defendant to a pre‐trial settlement will not necessarily produce an award settlement consistent with the size of pecuniary and non‐pecuniary losses. The model is subjected to an empirical examination using a sample of 384 plaintiffs whose cases were closed in Western Australia in 1990. Our results indicate that in practice the common law process fails to determine an individual assessment of injured workers' losses. In particular, awards represent an inadequate compensation for the losses suffered by severely incapacitated plaintiffs.
Competition Policy: Some Neglected Issues in the Hilmer Report
Authors: Freebairn John
Published: January 2008

The Hilmer Report focuses primarily on the very important issues of legislative and regulatory measures to directly reduce monopolistic structures and conduct. This article argues that competition policy also should embrace measures to reduce transaction costs. Lower transaction costs increase the substitutability of different options and help to extend the competitive market, and particularly to reduce entry barriers for new entrants and for innovations. Contrary to Hilmer, the article argues that economic theory, and particularly the marginal cost concept, can and should have a central role in the assessment of monopolistic behaviour and in the determination of access prices to ‘essential services’ provided by natural monopolies.
The Impact of Health, Education and Housing Outlays upon Income Distribution in Australia in the 1990s
Authors: Harding Ann
Published: January 2008

The distributional impact of public expenditure on such programs as health, education and housing is frequently ignored in studies of income distribution. This may bias assessment of both the relative living standards of different types of families at any particular point in time and of trends in income inequality over time.

This article provides estimates for the 1990s of the combined distributional impact of public outlays on health, education and housing. The analysis indicates that the major beneficiaries of public outlays on these services are families with children and the aged. The pattern of receipt shows a strong life‐cycle effect, with the value of non‐cash benefits peaking in the 30s and 40s and rising again in retirement. Non‐cash benefits are also shown to have an equalising effect upon income distribution.
Reducing Carbon Dioxide Emissions in Australia: A Minimum Disruption Approach
Authors: Cornwell Antonia
Published: January 2008

Abstract

While at the Toronto Conference in 1988, Australia adopted a target of reducing carbon dioxide emissions by 20 per cent of 1988 levels by the year 2005, however action to reduce emissions has been negligible. Unilateral action is deemed too costly in terms of the negative effects it could have on employment, GDP growth, exports and international competitiveness.

Most Australian studies have evaluated the effect on such variables of employing a specified policy instrument, such as a carbon tax, to reduce emissions. This study instead uses an input‐output method developed by Proops, Faber and Wagenhals (1993) to ascertain the minimum set of changes necessary in different sectors of the economy required to achieve the Toronto Target, where constraints on key macroeconomic variables, such as GDP growth and the level of employment, are met. The cost of reducing emissions is defined here in terms of the required structural changes, when factors like GDP growth are held positive.

The results suggest that the necessary changes in various sectors under each of the scenarios are not far removed from the observed rates of change for Australia. The results are also consistent with those obtained for both Germany and the United Kingdom.
The Effect of Immigration on Residents' Incomes in Australia: Some Issues Reconsidered
Authors: Peter Matthew W. , Verikios George
Published: January 2008

This article outlines the standard neoclassical model (SNM) of the impact of immigration on the incomes of the resident (pre‐immigration) population. We augment the SNM to allow for foreign ownership of and government equity in the capital stock. Using the expanded model, the sensitivity of residents' incomes to immigration is tested in four scenarios. Our calculations reveal that the size of the Berry‐Soligo welfare triangle is small and is dominated by the effects of foreign ownership of capital and government equity in capital. In our preferred long‐run scenario, the 1991–92 Australian immigrant intake reduced residents' incomes. We believe the results based on the expanded SNM justify a more comprehensive study incorporating a range of other influential factors determining the impact of immigration on residents' incomes. We suggest a list of such factors and report on work done in these specific areas. Essential to a comprehensive study are the integration of results from studies in specific areas, and the devotion of resources to the tasks of further data collection and model development
Contemporary Issues in the Ongoing Reform of the Australian Retirement Income System
Authors: Knox David M.
Published: January 2008

The development of a sound and sustainable retirement income system is currently an important social, political and economic issue around the world as many countries face a range of pressures including an ageing population, low national saving levels, maturing Social Security programs and changing employment patterns. As a result of these pressures, the World Bank has advocated a three‐pillar system which is broadly reflected in the current Australian arrangements. However, further reform is planned in Australia. The 1995–96 Federal Budget announced a proposal to introduce compulsory minimum employee contributions of 3 per cent of earnings, together with a matching income‐tested government contribution. The proposal for government contributions is analysed in this article and an alternative approach is proposed. The important related issues of the taxation of superannuation and the integration between superannuation and the government‐funded age pension are also reviewed. As a result, recommendations for change are made to encourage a stable long‐term structure that provides retirement incomes in a simple, affordable and fair manner.
Grey Horizons: Who Pays for Old Age in the 21st Century?
Authors: Johnson Paul
Published: January 2008

This article challenges pessimistic interpretations of the economic impact of population ageing that have been advanced by the World Bank and others. Common perceptions of an ‘old age crisis’ are shown to result from a narrow reading of demographic data. Future changes in the age structure of the population will be no greater than those already experienced and accommodated in the last fifty years, and estimates of demographic dependency ratios provide an unreliable basis for future economic projections. Although population ageing will require a larger proportion of income to be transferred from years of work to years of retirement, this cost cannot be significantly reduced by shifting from public to private pension systems. Moreover, the cost is one that we should welcome; it is the price we have to pay for longer life.
The Real Structural Imbalance and Fiscal Stance in Australia during the Postwar Era
Authors: Abbott Malcolm J.
Published: January 2008

By using the concept of the constant employment budget balance and changes in real public debt it is possible to determine the size of Australian Government's real structural budget imbalances during the postwar era. In doing so it is possible to partially explain the short run fluctuations in economic activity and comment on the ability of the Federal Government to influence the level of economic activity.