Earnings management in response to the introduction of the Australian gold tax

Earnings from gold mining in Australia remained tax-exempt for almost seven decades until January 1, 1991. In the early 1980s, rapid economic prosperity induced by escalated gold prices brought the Australian gold-mining industry under intense political scrutiny. Using a variant of the modified Jones model, this paper provides evidence of significant downward earnings management by Australian gold-mining firms, which is consistent with their attempts to mitigate political costs during the period from June 1985 to May 1988. In contrast, test of earnings management over a similar period in a control sample of Canadian gold-mining firms produced insignificant results. Further, empirical results are robust to several sensitivity tests performed. During the period from June 1988 to December 1990, the Australian firms were found to have engaged in economic earnings management. This is consistent with the sample firms' incentive of maximizing economic earnings immediately prior to the introduction of income tax on gold mining. The findings of this study help to understand the impact of earnings management on the efficient resource allocation in an economy. They also contribute toward understanding the linkage between regulation of accounting for special purposes and general-purpose financial. reporting.

Rising longevity, education, savings, and growth

This paper examines the impact of declines in adult mortality on growth in an overlapping generations model. With public education and imperfect annuity markets, a decline in mortality affects growth through three channels. First, it raises the saving rate and thereby increases the rate of physical capital accumulation. Second, it reduces accidental bequests, lowers investment, and thereby lowers the rate of physical capital accumulation. Third, it may lead the median voter to increase the tax rate for public education initially but lower the tax rate in a later stage. Starting from a high mortality rate as found in many Third World populations, the net effect of a decline in mortality is to raise the growth rate. However, starting from a low mortality rate such as is found in most industrial populations, the net effect of a further decline in mortality is to reduce the growth rate. The findings appear consistent with recent empirical evidence. (C) 2002 Elsevier Science B.V All rights reserved.

Assessing cost-effectiveness in mental health: vocational rehabilitation for schizophrenia and related conditions

Objective: Existing evidence suggests that vocational rehabilitation services, in particular individual placement and support (IPS), are effective in assisting people with schizophrenia and related conditions gain open employment. Despite this, such services are not available to all unemployed people with schizophrenia who wish to work. Existing evidence suggests that while IPS confers no clinical advantages over routine care, it does improve the proportion of people returning to employment. The objective of the current study is to investigate the net benefit of introducing IPS services into current mental health services in Australia. Method: The net benefit of IPS is assessed from a health sector perspective using cost-benefit analysis. A two-stage approach is taken to the assessment of benefit. The first stage involves a quantitative analysis of the net benefit, defined as the benefits of IPS (comprising transfer payments averted, income tax accrued and individual income earned) minus the costs. The second stage involves application of 'second-filter' criteria (including equity, strength of evidence, feasibility and acceptability to stakeholders) to results. The robustness of results is tested using the multivariate probabilistic sensitivity analysis. Results: The costs of IPS are $A10.3M (95% uncertainty interval $A7.4M-$A13.6M), the benefits are $A4.7M ($A3.1M-$A6.5M), resulting in a negative net benefit of $A5.6M ($A8.4M-$A3.4M). Conclusions: The current analysis suggests that IPS costs are greater than the monetary benefits. However, the evidence-base of the current analysis is weak. Structural conditions surrounding welfare payments in Australia create disincentives to full-time employment for people with disabilities.

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.

A unique behavior of sub-critical hydrocarbon permeability in activated carbon at low pressures

In our study on sub-critical hydrocarbon permeation in activated carbon, a minimum in the total permeability (B-T) at low pressure has been observed for only long-chain hydrocarbons such as n-hexane and n-heptane. Such an observation suggests that the minimum appearance depends on the properties of permeating vapors as well as the porous medium. In this paper a permeation model is presented to explain the minimum behavior with the allowance of the collision-reflection factor in the Knudsen diffusivity to be a function of surface loading. Surface diffusion was found to be very significant compared to other transport mechanisms such as Knudsen diffusion and gaseous viscous flow at low pressures. Since the gaseous viscous flow contributes negligibly to the B, at low pressures, the minimum appearance in the B, is mainly attributed to the interplay between Knudsen diffusion and surface diffusion. Also, the molecular structure of adsorbates plays an important role in the minimum appearance.

Genetic assignment methods for the direct, real-time estimation of migration rate: a simulation-based exploration of accuracy and power

Genetic assignment methods use genotype likelihoods to draw inference about where individuals were or were not born, potentially allowing direct, real-time estimates of dispersal. We used simulated data sets to test the power and accuracy of Monte Carlo resampling methods in generating statistical thresholds for identifying F-0 immigrants in populations with ongoing gene flow, and hence for providing direct, real-time estimates of migration rates. The identification of accurate critical values required that resampling methods preserved the linkage disequilibrium deriving from recent generations of immigrants and reflected the sampling variance present in the data set being analysed. A novel Monte Carlo resampling method taking into account these aspects was proposed and its efficiency was evaluated. Power and error were relatively insensitive to the frequency assumed for missing alleles. Power to identify F-0 immigrants was improved by using large sample size (up to about 50 individuals) and by sampling all populations from which migrants may have originated. A combination of plotting genotype likelihoods and calculating mean genotype likelihood ratios (D-LR) appeared to be an effective way to predict whether F-0 immigrants could be identified for a particular pair of populations using a given set of markers.

The value of dividend imputation tax credits in Australia

A dividend imputation tax system provides shareholders with a credit (for corporate tax paid) that can be used to offset personal tax on dividend income. This paper shows how to infer the value of imputation tax credits from the prices of derivative securities that are unique to Australian retail markets. We also test whether a tax law amendment that was designed to prevent the trading of imputation credits affected their economic value. Before the amendment, tax credits were worth up to 50% of face value in large, high-yielding companies, but Subsequently it is difficult to detect any value at all. (C) 2003 Elsevier B.V. All rights reserved.

Optimisation of strain rate imaging for application to stress echocardiography

We sought to improve the feasibility of strain rate imaging (SRI) during dobutamine stress echocardiography (DSE) in 56 subjects at low risk of coronary disease. The impact of several SRI changes during acquisition were studied, including: (1) changing from fundamental to harmonic imaging; (2) parallel beam-forming; (3) alteration of spatial resolution and (4) narrow sector acquisition. We assessed SR signal quality, a quantitative measure of signal noise and measurements of SRI. Of 1462 segments evaluated, 6% were uninterpretable at rest and 8% at peak stress. Signal quality was optimised by increasing temporal (p = 0.01) and spatial resolution (p<0.0001 vs. baseline imaging) at rest and peak. Increasing spatial resolution also minimised signal noise (p<0.0001). Inter-observer variability of time to peak SR and peak SR were less with high temporal and spatial resolution. SRI quality can be improved with harmonic imaging and higher temporal resolution but optimisation of spatial resolution is critical. (C) 2004 World Federation for Ultrasound in Medicine Biology.

Critical relationship between sodium valproate dose and human teratogenicity: results of the Australian register of anti-epileptic drugs in pregnancy

To compare the incidence of foetal malformations (FMs) in pregnant women with epilepsy treated with different anti-epileptic drugs (AED) and doses, and the influence of seizures, family and personal history, and environmental factors. A prospective, observational, community-based cohort study. Methods. A voluntary, Australia-wide, telephone-interview-based register prospectively enrolling three groups of pregnant women: taking AEDs for epilepsy; with epilepsy not taking AEDs; taking AEDs for a non-epileptic indication. Four hundred and fifty eligible women were enrolled over 40 months. Three hundred and ninety six pregnancies had been completed, with 7 sets of twins, for a total of 403 pregnancy outcomes. Results. 354 (87.8%) pregnancy outcomes resulted in a healthy live birth, 26 (6.5%) had a FM, 4 (1%) a death in utero, 1 (0.2%) a premature labour with stillbirth, 14 (3.5%) a spontaneous abortion and 4 lost to follow-up. The FM rate was greater in pregnancies exposed to sodium valproate (VPA) in the first trimester (116.0%) compared with those exposed to all other AEDs (16.0% vs. 2.4%, P < 0.01) or no AEDs (16.0% vs. 3.1 %, P < 0.01). The mean daily dose of VPA taken in pregnancy with FMs was significantly greater than in those without (11975 vs: 1128 mg, P < 0.01). The incidence of FM with VPA doses greater than or equal to 1100 mg was 30.2% vs. 3.2% with doses < 1100 mg (P < 0.01). Conclusions. There is a dose-effect relationship for FM and exposure to VPA during the first trimester of pregnancy, with higher doses of VPA associated with a significantly greater risk than with lower doses or with other AEDs. These results highlight the need to limit, where possible, the dose of VPA in pregnancy. (C) 2004 Elsevier Ltd. All rights reserved.

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.

Using the tax system to collect fines

In this article we consider the possibility that fines could be collected through the tax and social welfare systems in the same way as higher education contributions and child support payments are currently administered. We argue that the existing system of fine collection and enforcement leads to high default rates and reduces the usefulness of fines as a sanction. We consider a range of models for the implementation of an income-related fine collection system, and discuss their possible implications for issues including judicial independence, the time taken to repay fines and aggregate fine revenue.

The origin of the difference in the superconducting critical temperatures of the beta(H) and beta(L) phases of (BEDT-TTF)(2)I-3

Incommensurate lattice fluctuations are present in the beta(L) phase (T-c similar to 1.5 K) of ET2I3 (where ET is BEDT-TTF - bis(ethylenedithio)tetrathiafulvalene) but are absent in the beta(H) phase (T-c similar to 7 K). We propose that the disorder in the conformational degrees of freedom of the terminal ethylene groups of the ET molecules, which is required to stabilise the lattice fluctuations, increases the quasiparticle scattering rate and that this leads to the observed difference in the Superconducting critical temperatures, T-c, of the two phases. We calculate the dependence of T-c on the interlayer residual resistivity. Our theory has no free parameters. Our predictions are shown to be consistent with experiment. We describe experiments to conclusively test our hypothesis.

Effect of moisture content on the R-70 self-heating rate of Callide coal

Strip samples from the Boundary Hill pit at Callide have been tested in an adiabatic oven to assess the effect of moisture on the R-70 self-heating rate of coal. The two strip samples tested had R-70 self-heating rate values of 10.23 and 8.61 degrees C/h. As the moisture content of the coal was progressively increased, from the dry state of the test, the R-70 value decreased dramatically. At approximately 40-50% of the moisture holding capacity of the coal, the self-heating rate becomes measurable. Above this critical level of moisture content, the heat produced by oxidation is dissipated by moisture evaporation and coal self-heating is significantly delayed. (c) 2005 Elsevier B.V All rights reserved.

Income Ranking and convergence with physical and human capital and income equality

This paper presents an overlapping generations model with physical and human capital and income inequality. It shows that inequality impedes output growth by directly harming capital accumulation and indirectly raising the ratio of physical to human capital. The convergence speed of output growth equals the lower of the convergence speeds of the relative capital ratio and inequality, and varies with initial states. Among economies with the same balanced growth rate but different initial income levels, the ranking of income can switch in favor of those starting from low inequality and a low ratio of physical to human capital, particularly if the growth rate converges slowly. (C) 2004 Elsevier B.V. All rights reserved.

Growth responses of sugarcane to mycorrhizal spore density and phosphorus rate

Arbuscular mycorrhizal (AM) fungi, commonly found in long-term cane-growing fields in northern Queensland, are linked with both negative and positive growth responses by sugarcane ( Saccharum spp.), depending on P supply. A glasshouse trial was established to examine whether AM density might also have an important influence on these growth responses. Mycorrhizal spores ( Glomus clarum), isolated from a long-term cane block in northern Queensland, were introduced into a pasteurised low-P cane soil at 5 densities ( 0, 0.06, 0.25, 1, 4 spores/g soil) and with 4 P treatments ( 0, 8.2, 25, and 47 mg/kg). At 83 days after planting, sugarcane tops responded positively to P fertilizer, although responses attributable to spore density were rarely observed. In one case, addition of 4 spores/g led to a 53% yield response over those without AM at 8 mg P/kg, or a relative benefit of 17 mg P/kg. Root colonisation was reduced for plants with nil or 74 mg P/kg. For those without AM, P concentration in the topmost visible dewlap ( TVD) leaf increased significantly with fertiliser P (0.07 v. 0.15%). However, P concentration increased further with the presence of AM spores. Irrespective of AM, the critical P concentration in the TVD leaf was 0.18%. This study confirms earlier reports that sugarcane is poorly responsive to AM. Spore density, up to 4 spores/g soil, appears unable to influence this responsiveness, either positively or negatively. Attempts to gain P benefits by increasing AM density through rotation seem unlikely to lead to yield increases by sugarcane. Conversely, sugarcane grown in fields with high spore densities and high plant-available P, such as long-termcane-growing soils, is unlikely to suffer a yield reduction from mycorrhizal fungi.