The forgotten CGT events: Are asset revaluation reserve distributions by trustees of discretionary trusts capital gains?

It is the present practice that asset revaluation reserve distributions by trustees of discretionary trusts are not taxed in Australia. Are such distributions not meant to be taxed, or have relevant sections in the Income Tax Assessment Acts been overlooked? This article will review how trustees of discretionary trusts perform asset revaluation reserve distributions. It then challenges the current accepted view that they can be distributed tax-free to discretionary beneficiaries by analysing relevant CGT events, which the authors regard as forgotten events. It will be submitted that a discretionary beneficiary in receipt of an asset revaluation reserve distribution may have a capital gain which is required to be included in its assessable income. This liability for tax is regardless of the government's recent introduction of s 109XA to address the practice of asset revaluation reserve distributions bypassing the operation of Div 7A of the ITAA 1936 with such distributions.

Family average income and body mass index above the healthy weight range among urban and rural residents in regional Mainland China

Objective: To explore the relationship between family average income (FAI; an index of socio-economic status) and body mass index (BMI; a widely used, inexpensive indicator of weight status) above the healthy weight range in a region of Mainland China. Design: Population-based cross-sectional study, conducted between October 1999 and March 2000 on a sample of regular local residents aged 35 years or older who were selected by random cluster sampling. Setting: Forty-five administrative villages selected from three urban districts and two rural counties of Nanjing municipality, Mainland China, with a regional population of 5.6 million. Subjects: In total, 29 340 subjects participated; 67.7% from urban and 32.3% from rural areas; 49.8% male and 50.2% female. The response rate among eligible participants was 90.1%. Results: The proportion of participants classified as overweight was 30.5%, while 7.8% were identified as obese. After adjusting for possible confounding variables (age, gender, area of residence, educational level, occupational and leisure-time physical activity, daily vegetable consumption and frequency of red meat intake), urban participants were more likely to be overweight or obese relative to their rural counterparts, more women than men were obese, and participants in the lowest FAI tertile were the least likely to be above the healthy weight range. Conclusions: The proportion of adults with BMI above the healthy weight range was positively related to having a higher socio-economic status (indexed by FAI) in a regional Chinese population.

Evaluation of NHMRC funded research completed in 1992, 1997 and 2003: gains in knowledge, health and wealth

Objective: To report on strategies for, and outcomes of, evaluation of knowledge (publications), health and wealth (commercial) gains from medical research funded by the Australian Government through the National Health and Medical Research Council (NHMRC). Design and methods: End-of-grant reports submitted by researchers within 6 months of completion of NHMRC funded project grants which terminated in 2003 were used to capture self-reported publication number, health and wealth gains. Self-reported gains were also examined in retrospective surveys of grants completed in 1992 and 1997 and awards primarily supporting people (“people awards”) held between 1992 and 2002. Results: The response rate for the 1992 sample was too low for meaningful analysis. The mean number of publications per grant in the basic biomedical, clinical and health services research areas was very similar in 1997 and 2003. The publication output for population health was somewhat higher in the 2003 than in the 1997 analysis. For grants completed in 1997, 24% (31/131) affected clinical practice; 14% (18/131) public health practice; 9% (12/131) health policy; and 41% (54/131) had commercial potential with 20% (26/131) resulting in patents. Most respondents (89%) agreed that NHMRC people awards improved their career prospects. Interpretation is limited by the relatively low response rates (50% or less). Conclusions: A mechanism has been developed for ongoing assessment of NHMRC funded research. This process will improve accountability to the community and to government, and refine current funding mechanisms to most efficiently deliver health and economic returns for Australia.

Public investment and the risk premium for equity

Analysis of the equity premium puzzle has focused on private-sector capital markets. However, the existence of an anomalous equity premium raises important issues in the evaluation of public-sector investment projects. These issues are explored below. We begin by formalizing the argument that an equity premium may arise from uninsurable systematic risk in labour income, and show that, other things being equal, increases in public ownership of equity will improve welfare, up to the point where the equity premium is eliminated. Finally, we consider policy implications and the optimal extent of public ownership.

Relationship between franking credits and the market risk premium

In a dividend imputation tax system, equity investors have three potential sources of return: dividends, capital gains and franking (tax) credits. However, the standard procedures for estimating the market risk premium (MRP) for use in the capital asset pricing model, ignore the value of franking credits. Officer (1994) notes that if franking credits do affect the corporate cost of capital, their value must be added to the standard estimates of MRP. In the present paper, we explicitly derive the relationship between the value of franking credits (gamma) and the MRP. We show that the standard parameter estimates that have been adopted in practice (especially by Australian regulators) violate this deterministic mathematical relationship. We also show how information on dividend yields and effective tax rates bounds the values that can be reasonably used for gamma and the MRP. We make recommendations for how estimates of the MRP should be adjusted to reflect the value of franking credits in an internally consistent manner.

Property crime and income generation by heroin users

This paper provides a detailed analysis of patterns of income generation among 202 active heroin users in South West Sydney. We explore both sources of income and the relative contribution of different types of income generating activities, including drug sales and related activities, property crime, prostitution, legitimate income and avoided expenditures. Despite claims that heroin use leads inevitably to property crime, drug market activities accounted for a greater proportion of drug user income in this sample. Results indicate that law enforcement crackdowns that reduce opportunities for generating income from the drug market may increase property crime by heroin users.

Estimating Income Inequality in China Using Grouped Data and the Generalized Beta Distribution

There are two main types of data sources of income distributions in China: household survey data and grouped data. Household survey data are typically available for isolated years and individual provinces. In comparison, aggregate or grouped data are typically available more frequently and usually have national coverage. In principle, grouped data allow investigation of the change of inequality over longer, continuous periods of time, and the identification of patterns of inequality across broader regions. Nevertheless, a major limitation of grouped data is that only mean (average) income and income shares of quintile or decile groups of the population are reported. Directly using grouped data reported in this format is equivalent to assuming that all individuals in a quintile or decile group have the same income. This potentially distorts the estimate of inequality within each region. The aim of this paper is to apply an improved econometric method designed to use grouped data to study income inequality in China. A generalized beta distribution is employed to model income inequality in China at various levels and periods of time. The generalized beta distribution is more general and flexible than the lognormal distribution that has been used in past research, and also relaxes the assumption of a uniform distribution of income within quintile and decile groups of populations. The paper studies the nature and extent of inequality in rural and urban China over the period 1978 to 2002. Income inequality in the whole of China is then modeled using a mixture of province-specific distributions. The estimated results are used to study the trends in national inequality, and to discuss the empirical findings in the light of economic reforms, regional policies, and globalization of the Chinese economy.

Nature-based tourism and the valuation of its environmental resources: Economic and other aspects

Nature-based tourism has grown in importance in recent decades, and strong links have been established between it and ecotourism. This reflects rising incomes, greater levels of educational attainment and changing values, especially in the Western world. Nature-based tourism is quite varied. Different types of such tourism are identified and their consequences for sustainability of their resource-base are briefly considered. The development and management of nature-based tourism involves many economic aspects, several of which are discussed. For example, one must consider the economics of reserving or protecting land for this type of tourism. What economic factors should be taken into account? Economists stress the importance of taking into account the opportunity costs involved in such a decision. This concept is explained. However, determining the net economic value of an area used for tourism is not straightforward. Techniques for doing this, such as the travel cost method and stated value methods, are introduced. Natural areas reserved for tourism may have economic value not only for tourism but also jointly for other purposes, such as conserving wildlife, maintaining hydrological cycles and so on. These other purposes, should be taken into account when considering the use of land for nature-based tourism. According to one economic point of view, land should be used in a way that maximises its total economic value. While this approach has its merits, it does not take into account the distribution of benefits from land use and its local impacts on income and employment. These can be quite important politically and for nature conservation, and are discussed. Finally, there is some discussion of whether fees charged to tourists for access to environmental resources should discriminate between domestic tourists and foreigners.

Economic, social and cultural influences on the status and wellbeing of Indian rural wives

Examines the status and well being of wives in rural India using results from interviews. Surveys were conducted in three villages in the southwest of West Bengal and in three villages in the west of Orissa. The survey in West Bengal contained a large proportion of Santal tribals and the Oriyan survey was dominated by Kondh tribals. The relationships between variables representing economic, social and cultural factors are compared with ‘dependent’ variables representing the status of wives within their family and their wellbeing. Wellbeing is indicated by whether the basic needs of wives for food and medical care are met. Status of wives is indicated by their ‘control’ over family resources, whether or not they are restricted in joining social groups and in working outside their home, and the extent of their involvement in family decision-making. Cultural factors are found to be the dominant influence on the status of wives. Family income and other economic factors are found to be associated cross sectionally with greater restrictions on wives within their family. Nevertheless, the higher in the economic status of the household, the more likely are the basic needs of wives to be met.

The relationship between commercial agriculture and food availability to Kenyan farm families: A case study

This article examines the effects of agricultural commercialization and other factors on per capita food availability by means of a case study in the Nyeri district in Kenya. It was found that cash cropping has a negative influence on per capita food availability in the male-headed households. This negative influence is not apparent in the female-headed households and in fact, per capita food availability rises with increased agricultural commercialization. Households of married women seem to suffer more in terms of reduced food availability than households headed by females. Husbands have control over cash income and therefore influence food purchases. They are less likely than females to use the cash for food purchases and tend to spend the cash on themselves, thus reducing food availability to family members. This suggests that in some patriarchal societies, caution should be displayed in encouraging cash cropping especially in male-headed households. Cash cropping under such circumstances is unwise from both a food availability and food security point of view because it can result in reduced crop diversification hence increasing the risks of income food deficits for families. Other factors found to have an influence on per capita food availability are employment of the women outside households, educational level of the women and the quality of land.

The Migration of Doctors and Nurses from South Pacific Island Nations

Little is known of the structure of the international migration of skilled health professionals. Accelerated migration of doctors and nurses from the Pacific island states of Fiji, Samoa and Tonga to the Pacific periphery is part of the globalization of health care. The findings from a recent survey of 251 doctors and nurses from the three island countries are reported here. Key determinants of both present migration status and future migration intentions were analyzed using econometric methods. Nurses' and doctors' propensities to migrate are influenced by both income and non-income factors, including ownership of businesses and houses. Migrants also tend to have more close relatives overseas, to have trained there, and so experienced superior working conditions. Migration propensities vary between countries, and between nurses and doctors within countries. Tongan nurses have a higher propensity to migrate, mainly because of greater relative earnings differentials, but are also more likely to return home. The role of kinship ties, relative income differentials and working conditions is evident in other developing country contexts. Remittances and return migration, alongside business investment, bring some benefits to compensate for the skill drain. National development policies should focus on encouraging return migration, alongside retention and recruitment, but are unlikely to prevent out migration. (C) 2003 Elsevier Ltd. All rights reserved.

The generational transmission of socioeconomic inequalities in child cognitive development and emotional health

Socioeconomic inequalities in the health of adults have been largely attributed to lifestyle inequalities. The cognitive development (CD) and emotional health (EH) of the child provides a basis for many of the health-related behaviours which are observed in adulthood. There has been relatively little attention paid to the way CID and EH are transmitted in the foetal and childhood periods, even though these provide a foundation for subsequent socioeconomic inequalities in adult health. The Mater-University of Queensland Study of Pregnancy (MUSP) is a large, prospective, pre-birth cohort study which enrolled 8556 pregnant women at their first clinic visit over the period 1981-1983. These mothers (and their children) have been followed up at intervals until 14 years after the birth. The socioeconomic status of the child was measured using maternal age, family income, and marital status and the grandfathers' occupational status. Measures of child CD and child EH were obtained at 5 and 14 years of age. Child smoking at 14 years of age was also determined. Family income was related to all measures of child CD and EH and smoking, independently of all other indicators of the socioeconomic status of the child. In addition, the grandfathers' occupational status was independently related to child CD (at 5 and 14 years of age). Children from socioeconomically disadvantaged families (previous generations' socioeconomic status as well as current socioeconomic status) begin their lives with a poorer platform of health and a reduced capacity to benefit from the economic and social advances experienced by the rest of society. (C) 2003 Elsevier Ltd. All rights reserved.