Private equity bids in Australia : an exploratory study

In this study, we provide an insight into how private equity players choose their targets and the bid arrangements they prefer. We test our expectations of the unique features of private equity targets using a sample of 23 listed private equity target firms during 2001–2007. We find, relative to a benchmark sample of 81 corporate targets matched by year and industry, the private equity target firms to be larger, more profitable, use their assets more efficiently, more highly levered and have greater cash flow. Multivariate testing indicates that private equity targets have relatively greater financial slack, greater financial stability, greater free cash flow and lower measurable growth prospects. All conclusions are found to be robust to a control sample of 502 takeover bids during 2001–2007.

Termination fees in a ‘bright line’ jurisdiction

We seek to statistically inform the debate regarding the Australian Takeovers Panel’s ‘bright line’ policy towards break fees. Based on 313 takeovers from 2002 to 2006, 85 involving break fees, we find post-bid competition to be unrelated to break fee usage and inversely related to bid success. We also find that break fee usage has a detrimental effect on shareholder wealth as measured by both the final bid premium and abnormal returns. Therefore, although break fees appear to be neither anticompetitive nor coercive within the Australian context, they do appear to have had a deleterious effect on shareholder wealth.

Disclosure of proxy voting information by Australian managed investment schemes

The US Securities and Exchange Comission requires registered management investment companies to disclose how they vote proxies relating to portfolio securities they hold. The primary purpose of this rule is to enable fund investors to monitor the role of institutional shareholders in the corporate governance practices of public companies. In Australia, despite reform proposals, there are no regulations requiring institutional investors to report proxy voting procedures and practises. There is little evidence of voluntary disclosure of proxy voting by Australian managed investment schemes in equities, indicating that there are costs involved in such disclosure.

Impact of the Corporate Law Economic Reform Program Act 1999 on initial public offering prospectus earnings forecasts

Commencing 13 March 2000, the Corporate Law Economic Reform Program Act 1999 (Cth) introduced changes to the regulation of corporate fundraising in Australia. In particular, it effected a reduction in the litigation risk associated with initial public offering prospectus disclosure.We find that the change is associated with a reduction in forecast frequency and an increase in forecast value relevance, but not with forecast error or bias. These results confirm previous findings that changes in litigation risk affect the level but not the quality of disclosure. They also suggest that the reforms’ objectives of reducing fundraising costs while improving investor protection, have been achieved.

Exploring the contested role of mandatory reporting laws in the identification of severe child abuse and neglect

Significant numbers of children are severely abused and neglected by parents and caregivers. Infants and very young children are the most vulnerable and are unable to seek help. To identify these situations and enable child protection and the provision of appropriate assistance, many jurisdictions have enacted ‘mandatory reporting laws’ requiring designated professionals such as doctors, nurses, police and teachers to report suspected cases of severe child abuse and neglect. Other jurisdictions have not adopted this legislative approach, at least partly motivated by a concern that the laws produce dramatic increases in unwarranted reports, which, it is argued, lead to investigations which infringe on people’s privacy, cause trauma to innocent parents and families, and divert scarce government resources from deserving cases. The primary purpose of this paper is to explore the extent to which opposition to mandatory reporting laws is valid based on the claim that the laws produce ‘overreporting’. The first part of this paper revisits the original mandatory reporting laws, discusses their development into various current forms, explains their relationship with policy and common law reporting obligations, and situates them in the context of their place in modern child protection systems. This part of the paper shows that in general, contemporary reporting laws have expanded far beyond their original conceptualisation, but that there is also now a deeper understanding of the nature, incidence, timing and effects of different types of severe maltreatment, an awareness that the real incidence of maltreatment is far higher than that officially recorded, and that there is strong evidence showing the majority of identified cases of severe maltreatment are the result of reports by mandated reporters. The second part of this paper discusses the apparent effect of mandatory reporting laws on ‘overreporting’ by referring to Australian government data about reporting patterns and outcomes, with a particular focus on New South Wales. It will be seen that raw descriptive data about report numbers and outcomes appear to show that reporting laws produce both desirable consequences (identification of severe cases) and problematic consequences (increased numbers of unsubstantiated reports). Yet, to explore the extent to which the data supports the overreporting claim, and because numbers of unsubstantiated reports alone cannot demonstrate overreporting, this part of the paper asks further questions of the data. Who makes reports, about which maltreatment types, and what are the outcomes of those reports? What is the nature of these reports; for example, to what extent are multiple numbers of reports made about the same child? What meaning can be attached to an ‘unsubstantiated’ report, and can such reports be used to show flaws in reporting effectiveness and problems in reporting laws? It will be suggested that available evidence from Australia is not sufficiently detailed or strong to demonstrate the overreporting claim. However, it is also apparent that, whether adopting an approach based on public health and or other principles, much better evidence about reporting needs to be collected and analyzed. As well, more nuanced research needs to be conducted to identify what can reasonably be said to constitute ‘overreports’, and efforts must be made to minimize unsatisfactory reporting practice, informed by the relevant jurisdiction’s context and aims. It is also concluded that, depending on the jurisdiction, the available data may provide useful indicators of positive, negative and unanticipated effects of specific components of the laws, and of the strengths, weaknesses and needs of the child protection system.

The use of dashboards in performance management : evidence from sales managers

The purpose of this paper is to identify and empirically examine the key features, purposes, uses, and benefits of performance dashboards. We find that only about a quarter of the sales managers surveyed1 in Finland used a dashboard, which was lower than previously reported. Dashboards were used for four distinct purposes: (i) monitoring, (ii) problem solving, (iii) rationalizing, and (iv) communication and consistency. There was a high correlation between the different uses of dashboards and user productivity indicating that dashboards were perceived as effective tools in performance management, not just for monitoring one‟s own performance but for other purposes including communication. The quality of the data in dashboards did not seem to be a concern (except for completeness) but it was a critical driver regarding its use. This is the first empirical study on performance dashboards in terms of adoption rates, key features, and benefits. The study highlights the research potential and benefits of dashboards, which could be valuable for future researchers and practitioners.

Property, planning and purpose : legal concerns facing broadband rollout in Australia

The Australian government, and opposition, are committed to facilitating high-speed broadband provision. In April 2009 the (then) Labor government announced a proposal to facilitate provision by mandating “…the use of fibre optic infrastructure … in greenfield estates ….” Separately, the installation of (usually overhead) cables commenced in select brownfield areas throughout Australia. In the lead up to the 2010 federal election, the broadband policy focus of the (then) federal opposition was to enabling private investment rather than direct investment by government itself. High-speed broadband is essential for Australia’s economic future. Whether implementation is undertaken by government, government owned corporations or private investors, will impact on the processes to be followed. Who does what, also will determine the rights available to land owners. The next stage, of necessity, will involve the establishment of procedures to require the retrofitting of existing urban environments. This clearly will have major property, property rights and valuation impacts. As Horan (2000) observed “…preserving... unique characteristics … of…regions requires a compromise between economic ambitions and social, cultural, and environmental values”. The uncertainty following the federal election, and the influence of independants with individual agendas; presents unique challenges for broadband implementation. This paper seeks to identify the processes to be followed by various potential broadband investors as they work to establish a ubiquitous network. It overviews current legislative regimes and examines concerns raised by stakeholders in various government reviews. It concludes by plotting a clear way forward to the future, with particular regard to property rights and usage.

Evaluation of the Airdrie Sheriff Youth Court Pilot

A pilot Youth Court was introduced at Airdrie Sheriff Court in June 2004. Its objectives were to: • reduce the frequency and seriousness of re-offending by 16 and 17 year old offenders, particularly persistent offenders (and some 15 year olds who are referred to the court); • promote the social inclusion, citizenship and personal responsibility of these young offenders while maximising their potential; • establish fast track procedures for those young persons appearing before the Youth Court; • enhance community safety, by reducing the harm caused to individual victims of crime and providing respite to those communities which are experiencing high levels of crime; and • test the viability and usefulness of a Youth Court using existing legislation and to demonstrate whether legislative and practical improvements might be appropriate. An evaluation of the pilot commissioned by the Scottish Executive found that it appeared in many respects to be working well. It was a tightly run court that dealt with a heavy volume of business. With its fast track procedures and additional resources it was regarded as a model to be aspired to in all summary court business. Whether a dedicated Youth Court was required or whether procedural improvements would have been possible in the absence of dedicated resources and personnel was, however, more difficult to assess. Two issues in particular required further attention. First, consideration needed to be given to whether the Youth Court should be more explicitly youth focused and what this might entail. Second, greater clarity was required regarding for whom the Youth Court was intended to avoid the risk of net-widening and its consequences for young people.

Evaluation of the Hamilton Youth Court Pilot 2003-2005

Pilot Youth Courts were introduced at Hamilton Sheriff Court in June 2003 and at Airdrie Sheriff Court in June 2004. Although introduced as one of a number of measures aimed at responding more effectively to youth crime (including young people dealt with through the Children’s Hearings System), the Youth Courts were intended for young people who would otherwise have been dealt with in the adult Sheriff Summary Court. The objectives of the pilot Youth Courts were to: • reduce the frequency and seriousness of re-offending by 16 and 17 year old offenders, particularly persistent offenders (and some 15 year olds who are referred to the court); • promote the social inclusion, citizenship and personal responsibility of these young offenders while maximising their potential; • establish fast track procedures for those young persons appearing before the Youth Court; • enhance community safety, by reducing the harm caused to individual victims of crime and providing respite to those communities which are experiencing high levels of crime; and • test the viability and usefulness of a Youth Court using existing legislation and to demonstrate whether legislative and practical improvements might be appropriate. Evaluation of the Hamilton and Airdrie Sheriff Youth Court pilots suggested that they had been successful in meeting the objectives set for them by the Youth Court Feasibility Group. Both were tightly run courts that dealt with a heavy volume of business. The particular strengths of the Youth Court model over previous arrangements included the fast-tracking of young people to and through the court, the reduction in trials, the availability of a wider range of resources and services for young people and ongoing judicial review. The successful operation of the pilot Youth Courts was dependent upon effective teamwork among the relevant agencies and professionals concerned. Good information sharing, liaison and communication appeared to exist across agencies and the procedures that were in place to facilitate the sharing of information seemed to be working well. This was also facilitated by the presence of dedicated staff within agencies, resulting in clear channels of communication, and in the opportunity provided by the multi-agency Implementation Groups to identify and address operational issues on an ongoing basis. However, whether Youth Courts are required in Scotland or whether procedural improvement were possible in the absence of dedicated resources and personnel was more difficult to assess. Two issues in particular required further attention. First, consideration needed to be given to whether the Youth Courts should be more explicitly youth focused and what this might entail. Second, greater clarity was required regarding for whom the Youth Courts were intended. This suggested the need for further discussion of Youth Court targeting and its potential consequences among the various agencies concerned.

Legal liability for carbon capture and storage in Australia : where should the losses fall?

This article presents a critical analysis of the current and proposed CCS legal frameworks across a number of jurisdictions in Australia in order to examine the legal treatment of the risks of carbon leakage from CCS operations. It does so through an analysis of the statutory obligations and liability rules established under the offshore Commonwealth and Victorian regimes, and onshore Queensland and Victorian legislative frameworks. Exposure draft legislation for CCS laws in Western Australia is also examined. In considering where the losses will fall in the event of leakage, the potential tortious and statutory liabilities of private operators and the State are addressed alongside the operation of statutory protections from liability. The current legal treatment of CCS under the new Australian Carbon Pricing Mechanism is also critiqued.

Antecedents of sustainable management support for IT-related initiatives

Having IT-related capabilities is not enough to secure value from the IT resources and survive in today’s competitive environment. IT resources evolve dynamically and organisations must sustain their existing capabilities to continue to leverage value from their IT resources. Organisations’ IT-related management capabilities are an important source of their competitive advantage. We suggest that organisations can sustain these capabilities through appropriate considerations of resources at the technology-use level. This study suggests that an appropriate organisational design relating to decision rights and work environment, and a congruent reward system can create a dynamic IT-usage environment. This environment will be a vital source of knowledge that could help organisations to sustain their IT-related management capabilities. Analysis of data collected from a field survey demonstrates that this dynamic IT-usage environment, a result of the synergy between complementary factors, helps organisations to sustain their IT-related management capabilities. This study adds an important dimension to understanding why some organisations continue to perform better with their IT resources than others. For practice, this study suggests that organisations need to consider a comprehensive approach to what constitutes their valuable resources.

Australian Tax Analysis [8th Edition]

Now in its eighth edition, Australian Tax Analysis: Cases, Commentary, Commercial Applications and Questions has a proven track record as a high level work for students of taxation law written by a team of authors with many years of experience. Taking into account the fact that the volume of material needed to be processed by today’s taxation student can be overwhelming, the well-chosen extracts and thought-provoking commentary in Australian Tax Analysis, 8th edition, provide readers with the depth of knowledge, and reasoning and analytical skills that will be required of them as practitioners. As well as the carefully selected case extracts and the helpful commentary, each chapter is supplemented by engaging practice questions, involving problem-solving, commercial decision-making, legal analysis and quantitative application. All these elements combined make Australian Tax Analysis an invaluable aid to the understanding of a subject that can be both technical and complex.

Good and bad Sharia : Australia's mixed response to Islamic law

Reflecting on the legal consequences of globalisation in the 21st century, Twining predicted that societies in the West would have to 'wrestle with the extent to which the state should recognise, make concessions to, or even enforce norms and values embedded in different religions, cultures or traditions'. This is borne out as the direction across the common law world moves towards entrenching legal pluralism. The concessions each nation has made to minorities with different religions, cultures and traditions have varied. The special character of Islam, as a comprehensive blueprint for life in which law and religion unite, has meant that the negotiations for a special place for Muslims within each common law jurisdiction has been at the forefront of new legal ordering possibilities. This is the crux of the pluralism debate. Cautiously, Australians have watched the, at times histrionic, discourse in Canada and Great Britain on official recognition for Islamic law.

Incentivising private health insurance through the income tax regime : Capitalising on behavioural models

The Australian income tax regime is generally regarded as a mechanism by which the Federal Government raises revenue, with much of the revenue raised used to support public spending programs. A prime example of this type of spending program is health care. However, a government may also decide that the private sector should provide a greater share of the nation's health care. To achieve such a policy it can bring about change through positive regulation, or it can use the taxation regime, via tax expenditures, not to raise revenue but to steer or influence individuals in its desired direction. When used for this purpose, tax expenditures steer taxpayers towards or away from certain behaviour by either imposing costs on, or providing benefits to them. Within the context of the health sector, the Australian Federal Government deploys social steering via the tax system, with the Medicare Levy Surcharge and the 30 percent Private Health Insurance Rebate intended to steer taxpayer behaviour towards the Government’s policy goal of increasing the amount of health provision through the private sector. These steering mechanisms are complemented by the ‘Lifetime Health Cover Initiative’. This article, through the lens of behavioural economics, considers the ways in which these assorted mechanisms might have been expected to operate and whether they encourage individuals to purchase private health insurance.

Taxation of multinational banks : using formulary apportionment to reflect economic reality (Part 1)

Formulary apportionment does not attempt to undertake a transactional division of a highly integrated multinational entity. Rather, it allocates income to the jurisdictions based on an economically justifiable formula. Opposition to formulary apportionment is generally based on the argument that it is not a theoretically superior (or optimal) model because of the implementation difficulties. The conclusion that the unitary taxation model may be theoretically superior to the current arm's-length model that applies to multinational banks, despite significant implementation, compliance, and enforcement issues, is based on the unitary taxation model providing greater alignment with the unique features of these banks. The formulary apportionment model looks to the economic substance of the multinational entity and, in this sense, adopts a substance-over- form approach. Formulary apportionment further recognizes the impossibility of using arm's-length pricing for economically interdependent multinational entities. A final advantage to formulary apportionment, which is also a consequence of this model achieving greater inter-nation equity, is the elimination of double taxation.