Revitalising the Australian Shipping Industry through Tax Reform: Alchemy or Piracy?

The Australian Federal Government has recently passed reforms to the shipping industry. These reforms are aimed at removing barriers to investment in Australian shipping, fostering global competitiveness and securing a stable maritime skills base. The shipping reform package adopts a two pronged approach designed to achieve its stated goals by providing both a ‘stick’ and ‘carrot’ to industry participants. First, the ‘stick’ is delivered via the provision of tighter regulation of coastal trading operations through a new licencing system, along with the introduction of a civil penalty regime and an increase in existing penalties. Second, the ‘carrot’ is delivered via taxation incentives available to vessels registered in Australia where the registrant meets certain specified criteria. These incentives, introduced through amendments to the Income Tax Assessment Act 1997 and the Income Tax Assessment Act 1936 and contained in the Tax Laws Amendment (Shipping Reform) Act 2012, provide five key tax incentives to the shipping industry. From 1 July 2012, amendments give effect to an income tax exemption for qualifying ship operators, accelerated depreciation of vessels, roll-over relief from income tax on the sale of a vessel, an employer refundable tax offset, and an exemption from royalty withholding tax for payments made for the lease of certain shipping vessels.

Small business entity tax concessions : through the eyes of the practitioner

Australia’s small business sector has pursued often-competing imperatives of simplicity, equity and efficiency in the income tax regime (particularly focusing on the notion of simplicity) over the last decade. In 2001, there was an attempt to provide such simplification and reduce the compliance burden faced by Australian small businesses through the ‘simplified tax system’ (‘STS’). However, despite amendments over the years, the regime is much criticised. This article explores how the STS (now known as the ‘small business entity’ regime or ‘SBE’) is utilised from the perspective of tax practitioners, by analysing their recommendations to small business clients in respect of the regime. The results indicate that practitioners believe the regime did nothing to simplify the tax system for small businesses or reduce tax compliance costs. Indeed, the practitioners believed that the introduction of small business concessions had actually achieved the opposite result — it had increased tax compliance costs for their small business clients. However, tax practitioners still recommend the regime highly because it minimises their client’s tax liability.

Investing and reinvesting in social capital : the spill-over effects of social capital in self help groups

Part studies on the impact of microfinance through self help groups (HGs) and other collective poverty alleviation initiatives have predominantly focused on the financial benefits to the individual or the group (Hermes and Lensink 2011; Hulme and Mosley 1996). Such benefits are typically attributed to the financial capital made available to SHGs (Swain and Varghese 2009) and the social capital which accrues through networking mechanisms within SHG processes (Tesoriero 2005). Few studies however, have examined the benefits of SHGs beyond group members. Accordingly, research was conducted to look beyond the immediate group processes and outcomes, and examine the impact of SHGs in the wider (local) community.

Tax Expenditure Management : A Critical Assessment

A tax expenditure is a 'tax break' allowed to a taxpayer or group of taxpayers, for example, by way of concession, deduction, deferral or exemption. The tax expenditure concept, as it was first identified, was designed to demonstrate the similarity between direct government spending on the one hand and spending through the tax system on the other. The identification of benefits provided through the tax system as tax expenditures allows analysts to consider the fiscal significant of those parts of the tax system which do not contribute to the primary purpose of raising revenue. Although a seemingly simple concept, it has generated a range of complex definitional and practical issues, and this book identifies and critical assesses the controversial aspects of tax expenditure and tax expenditure management.

Is CEO human capital related to firm performance?

The global economy experienced continuous growth from 2002 to 2007 until the U.S. subprime mortgage crisis caused instability in worldwide stock markets. Simultaneously, global CEO turnover continued to fall to 13.8 percent in 2007. In contrast, the CEO turnover rate in Australia increased to 18 percent in 2007. The purpose of this paper is to determine under what conditions a change in a CEO is associated with firm performance. Succinctly, does the firm’s decision to replace the CEO depend on the CEO’s human capital or firm performance? The empirical study of Australian listed firms (2005 – 2008) shows that firm performance is not a determinant of CEO turnover, rather a CEO with less valuable human capital is more likely to be replaced. The study also finds that merely changing the CEO is not associated firm performance. Rather, there is a positive association between firm performance and the successor’s general human capital for firms that replace the CEO. Specifically, it is the internal successor’s general human capital that is an important determinant of increasing firm performance. These results are important because they imply that CEO turnover is a result of a more active market for CEOs and contributes to explaining why firms retain CEOs despite poor firm performance.

How collaborative technology supports cognitive processes in collaborative process modeling : a capabilities-gains-outcome model

We examine which capabilities technologies provide to support collaborative process modeling. We develop a model that explains how technology capabilities impact cognitive group processes, and how they lead to improved modeling outcomes and positive technology beliefs. We test this model through a free simulation experiment of collaborative process modelers structured around a set of modeling tasks. With our study, we provide an understanding of the process of collaborative process modeling, and detail implications for research and guidelines for the practical design of collaborative process modeling.

Conservatism, disclosure and the cost of equity capital

This study seeks insights into the economic consequences of accounting conservatism by examining the relation between conservatism and cost of equity capital. Appealing to the analytical and empirical literatures, we posit an inverse relation. Importantly, we also posit that the strength of the relation is conditional on the firm’s information environment, being the strongest for firms with high information asymmetry and the weakest (potentially negligible) for firms with low information asymmetry. Based on a sample of US-listed entities, we find, as predicted, an inverse relation between conservatism and the cost of equity capital, but further, that this relation is diminished for firms with low information asymmetry environments. This evidence indicates that there are economic benefits associated with the adoption of conservative reporting practices and leads us to conclude that conservatism has a positive role in accounting principles and practices, despite its increasing rejection by accounting standard setters.

Beijing : a media capital in the making

In the two decades since 2001, when China joined the World Trade Organization,the commercialization of the Chinese media has become a significant force. With the increasing demand for original content and a possible “cultural trade deficit” in media content, there has been much discussion about agglomeration and clustering. Beijing, as the national media centre of China, has witnessed the process of media agglomeration while facing the problem of cultural export during the commercialization of the media. Michael Curtin’s idea of media capital, which sees it as absorbing media resources and personnel and exporting media products transnationally, provides a dynamic perspective on understanding media agglomeration and dispersion under different political social and cultural circumstances. Hence, the question of whether Beijing will transform into a transnational media capital is worth studying in order to observe and comprehend China’s media industry in transition. Drawing on Michael Curtin’s three media capital trajectories, this paper interprets tensions and challenges generated in the process of media industry agglomeration and growth in Beijing. Emphasis is placed on the third trajectory, socio-cultural variation.

The role of human capital in economic growth revisited

Benhabib and Spiegel (1994) examine the role of human capital in the development process empirically using a theory-driven specification rather than the standard production function approach. While they find evidence of a positive impact of human capital on income growth, their result is not robust to the inclusion of inequality as an additional covariate. Using an alternate dataset and different measures of inequality, we find robust support for the hypothesis that human capital matters even when we account for the adverse effect of income inequality on growth.

Integration-segregation decisions under general value functions: "create your own bundle - choose 1, 2, or all 3!",

Whether to keep products segregated (e.g., unbundled) or integrate some or all of them (e.g., bundle) has been a problem of profound interest in areas such as portfolio theory in finance, risk capital allocations in insurance and marketing of consumer products. Such decisions are inherently complex and depend on factors such as the underlying product values and consumer preferences, the latter being frequently described using value functions, also known as utility functions in economics. In this paper, we develop decision rules for multiple products, which we generally call ‘exposure units’ to naturally cover manifold scenarios spanning well beyond ‘products’. Our findings show, e.g. that the celebrated Thaler's principles of mental accounting hold as originally postulated when the values of all exposure units are positive (i.e. all are gains) or all negative (i.e. all are losses). In the case of exposure units with mixed-sign values, decision rules are much more complex and rely on cataloging the Bell number of cases that grow very fast depending on the number of exposure units. Consequently, in the present paper, we provide detailed rules for the integration and segregation decisions in the case up to three exposure units, and partial rules for the arbitrary number of units.

An examination of tax-deductible donations made by individual Australian taxpayers in 2010-11

Each year, The Australian Centre for Philanthropy and Nonprofit Studies (CPNS) at Queensland University of Technology (QUT) collects and analyses statistics on the amount and extent of tax-deductible donations made and claimed by Australians in their individual income tax returns to deductible gift recipients (DGRs). The information presented below is based on the amount and type of tax-deductible donations made and claimed by Australian individual taxpayers to DGRs for the period 1 July 2010 to 30 June 2011. This information has been extracted mainly from the Australian Taxation Office's (ATO) publication Taxation Statistics 2010-11. The 2010-11 report is the latest report that has been made publicly available. It represents information in tax returns for the 2010-11 year processed by the ATO as at 31 October 2012.

Tax Deductible Giving in 2010 - 2011:ACPNS Current Issues Information Sheet 2013/1

Each year The Australian Centre for Philanthropy and Nonprofit Studies (ACPNS) at QUT analyses statistics on tax-deductible donations made by Australians in their individual income tax returns to Deductible Gift Recipients (DGRs). The information presented below is based on the amount and type of tax-deductible donations made by Australian taxpayers to DGRs for the period 1 July 2010 to 30 June 2011 extracted from the Australian Taxation Office's publication Taxation Statistics 2010-2011.1

Tax and equality in 1972: The case of Lodge v FCT

This paper is part of a larger project described at http://www.law.uq.edu.au/australian-feminist-judgments-project as follows: This project draws its inspiration from two significant recent developments in law and feminist scholarship. The first has been the emergence in Canada and the UK of feminist judgment-writing projects, in which feminist academics, lawyers and activists have written alternative judgments in a series of legal cases, imagining the different decision that might have been made by a feminist judge hearing the case. The second has been the incremental shift in recent years in the number of women judges and Magistrates presiding in courts and tribunals throughout Australia. As part of this project, a group of scholars will write alternative feminist judgments. This paper is one of the alternative feminist judgements. The case used for this discussion is Lodge v Federal Commissioner of Tax [1972] HCA 49. In that case, a woman, earning income by way of commission in her occupation as a law costs clerk, which she carried out at her home, claimed to deduct from her assessable income child care fees that enabled her to devote time and attention to her work. The High Court held that no right to a deduction had arisen. It found that, although the purpose of the expenditure was for gaining assessable income, it did not take place in, or in the course of, preparing bills of cost. Further, the expenditure was of a ‘private or domestic’ nature. This seminal taxation decision, which prevents deductions for childcare, has broad financial ramifications for workers in the home and those with childcare responsibilities. It designates childcare duties as ‘private’, notwithstanding the need for these in order, particularly for women, to work in the public sphere.

International tax and the Australian wine industry: Is your client’s product destined to sail the seven seas?

The export market for Australian wine continues to grow at a rapid rate, with imported wines also playing a role in market share in sales in Australia. It is estimated that over 60 per cent of all Australian wine is exported, while 12 per cent of wine consumed in Australia has overseas origins. In addition to understanding the size and direction (import or export) of wines, the foreign locales also play an important role in any tax considerations. While the export market for Australian produced alcohol continues to grow, it is into the Asian market that the most significant inroads are occurring. Sales into China of bottled wine over $7.50 per litre recently overtook the volume sold our traditional partners of the United States and Canada. It is becoming easier for even small to medium sized businesses to export their services or products overseas. However, it is vital for those businesses to understand the tax rules applying to any international transactions. Specifically, one of the first tax regimes that importers and exporters need to understand once they decide to establish a presence overseas is transfer pricing. These are the rules that govern the cross-border prices of goods, services and other transactions entered into between related parties. This paper is Part 2 of the seminar presented on transfer pricing and international tax issues which are particularly relevant to the wine industry. The predominant focus of Part 2 is to discuss four key areas likely to affect international expansion. First, the use of the available transfer pricing methodologies for international related party transactions is discussed. Second, the affects that double tax agreements will have on taking a business offshore are considered. Third, the risks associated with aggressive tax planning through tax information exchange agreements is reviewed. Finally, the paper predicts future ‘trip-wires’ and areas to ‘watch out for’ for practitioners dealing with clients operating in the international arena.

Fundamental Tax Legislation 2013

Fundamental Tax Legislation 2013 contains the essential provisions from the primary legislation that affects Australia’s taxation system. Updated and expanded for 2013, this volume is an indispensable reference for undergraduate and postgraduate students of taxation. New in 2013 is a revised Year in Review section, which summarises the legislative developments in taxation over the previous 12 months, a listing of the passage of tax-related legislation during the last year and the inclusion of reference statistics (such as CPI quarterly figures and individual tax rates for residents and non-residents). Also, new for 2013 is a Tax Rates and Tables section which contains an accessible summary of the main tax rates and tables that students will need to refer to for their tax studies.