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.

Natural disaster risk-informed for a better public infrastructure asset planning in Indonesian Central Government

The natural disasters incident that frequently hit Indonesia are floods, severe droughts, tsunamis, earth-quakes, volcano, eruptions, landslides, windstorm and forest fires. The impact of those natural disasters are significantly severe and affecting the quality of life of the community due to the breakdown of the public as-sets as one source to deliver public services. This paper is aimed to emphasis the importance of natural disaster risk-informed in relation to public asset management in Indonesian Central Government, particularly in asset planning stage where asset decision is made as the gate into the whole public asset management processes. A Case study in the Ministry of Finance Indonesia as the central government public asset manager and in 5 (five) line ministries/governmental agencies as public asset users was used as the approach to achieved the research objective. The case study devoured three data collection techniques i.e. interviews, observations and document archival which will be analysed by a content analysis approach. The result of the study indicates that Indonesian geographical position exposing many of public infra-structure assets as a high vulnerability to natural disasters. Information on natural-disaster trends and predictions to identify and measure the risks are available, however, such information are not utilise and integrated to the process of public infrastructure asset planning as the gate to the whole public asset management processes. Therefore, in order to accommodate and incorporate this natural disaster risk-information into public asset management processes, particularly in public asset planning, a public asset performance measurements framework should be adopted and applied in the process as one sources in making decision for infrastructure asset planning. Findings from this study provide useful input for the Ministry of Finance as public asset manager, scholars and private asset management practitioners in Indonesia to establish natural disaster risks awareness in public infrastructure asset management processes.

Public Economics and the Assessment of Tourism Developments and Policies

Public economics covers both topics in welfare economic of social (as opposed to private) interest and aspects of public finance. This chapter considers the application of two methods of social economic evaluation of tourist developments, namely, social cost-benefit analysis and economic impact analysis. The role of social cost-benefit analysis in the assessment of tourism is illustrated by its application to the evaluation of inbound tourism. This is followed by a discussion of taxes on tourism and subsidies to promote it. The principle focus is on hotel room taxes. The analysis of taxes on tourism involves both public finance and welfare economics issues. The scope for and desirability of applying the user-pays principle to tourism is then examined.

Public preferences for biodiversity conservation and climate-change mitigation: A choice experiment using ecosystem services indicators

Potential conflicts exist between biodiversity conservation and climate-change mitigation as trade-offs in multiple-use land management. This study aims to evaluate public preferences for biodiversity conservation and climate-change mitigation policy considering respondents’ uncertainty on their choice. We conducted a choice experiment using land-use scenarios in the rural Kushiro watershed in northern Japan. The results showed that the public strongly wish to avoid the extinction of endangered species in preference to climate-change mitigation in the form of carbon sequestration by increasing the area of managed forest. Knowledge of the site and the respondents’ awareness of the personal benefits associated with supporting and regulating services had a positive effect on their preference for conservation plans. Thus, decision-makers should be careful about how they provide ecological information for informed choices concerning ecosystem services tradeoffs. Suggesting targets with explicit indicators will affect public preferences, as well as the willingness of the public to pay for such measures. Furthermore, the elicited-choice probabilities approach is useful for revealing the distribution of relative preferences for incomplete scenarios, thus verifying the effectiveness of indicators introduced in the experiment.

A public perspective on the adoption of microgeneration technologies in New Zealand: A multivariate probit approach

The growing demand for electricity in New Zealand has led to the construction of new hydro-dams or power stations that have had environmental, social and cultural effects. These effects may drive increases in electricity prices, as such prices reflect the cost of running existing power stations as well as building new ones. This study uses Canterbury and Central Otago as case studies because both regions face similar issues in building new hydro-dams and ever-increasing electricity prices that will eventually prompt households to buy power at higher prices. One way for households to respond to these price changes is to generate their own electricity through microgeneration technologies (MGT). The objective of this study is to investigate public perception and preferences regarding MGT and to analyze the factors that influence people's decision to adopt such new technologies in New Zealand. The study uses a multivariate probit approach to examine households' willingness to adopt any one MGT system or a combination of the MGT systems. Our findings provide valuable information for policy makers and marketers who wish to promote effective microgeneration technologies.

Public and private mitigation for natural disasters in Japan

An increasing number of studies analyze the relationship between natural disaster damage and income levels, but they do not consider the distinction between public and private disaster mitigation. This paper empirically distinguishes these two types of mitigation using Japanese prefectural panel data from 1975 to 2007. Our results show that public mitigation rather than private mitigation has contributed to mitigating the total damage resulting from natural disasters. Our estimation of cost-benefit ratios for each prefecture confirms that the mitigation efforts of urban prefectures are less effective than those of rural prefectures in focusing on both large and frequent/small disasters. Hence, urban prefectures need to reassess their public mitigation measures. Furthermore, to lessen the damage resulting from extreme catastrophes, policy makers are required to invest in improved mitigation infrastructures when faced with a high probability of disasters.

The case for unitary taxation with formulary apportionment in the finance sector and the effect on developing nations

In 2013 the OECD released its 15 point Action plan to deal with base erosion and profit shifting (BEPS). In that plan it was recognised that BEPS has a significant effect on developing countries. This is because the lack of tax revenue can lead to a critical underfunding of public investment that would help promote economic growth. To this end, the BEPS project is aimed at ensuring an inclusive approach to take into account not only views of the G20 and OECD countries but also the perspective of developing nations. With this focus in mind and in the context of developing nations, the purpose of this article is to consider a possible solution to profit shifting which occurs under the current transfer pricing regime, with that solution being unitary taxation with formulary apportionment. It does so using the finance sector as a specific case for application. Multinational financial institutions (MNFIs) play a significant role in financing activities of their clients in developing nations. Consistent with the ‘follow-the-client’ phenomenon which explains financial institution expansion, these entities are increasingly profiting from activities associated with this growing market. Further, not only are MNFIs persistent users of tax havens but also, more than other industries, have opportunities to reduce tax through transfer pricing measures. This article establishes a case for an industry specific adoption of unitary taxation with formulary apportionment as a viable alternative to the current regime. It argues that such a model would benefit not only developed nations but also developing nations which are currently suffering the effects of BEPS. In doing so, it considers the practicalities of such an implementation by examining both definitional issues and a possible formula for MNFIs. This article argues that, while there would be implementation difficulties to overcome, the current domestic models of formulary apportionment provide important guidance as to how the unitary business and business activities of MNFIs should be defined as well as factors that should be included in an allocation formula, along with the appropriate weighting. While it would be difficult for developing nations to adopt such a regime, it is argued that it would be no more difficult than addressing issues they face with the current transfer pricing regime. As such, this article concludes that unitary taxation with formulary apportionment is a viable industry specific alternative for MNFIs which would assist developing nations and aid independent fiscal soundness.

The dilemma of international capital tax competition in the presence of public capital and endogenous growth

Using an OLG-model with endogenous growth and public capital we show, that an international capital tax competition leads to inefficiently low tax rates, and as a consequence to lower welfare levels and growth rates. Each national government has an incentive to reduce the capital income tax rates in its effort to ensure that this policy measure increases the domestic private capital stock, domestic income and domestic economic growth. This effort is justified as long as only one country applies this policy. However, if all countries follow this path then all of them will be made worse off in the long run.

Public good provision and the welfare effects of indirect tax harmonisation

The paper considers the welfare effect of the harmonisation of indirect taxes in two open economies. The revenue from taxation is used for the production of a non-tradeable public good. The welfare levels are affected via two channels: (i) changes in the levels of public good provision, and (ii) changes in deadweight loss associated with the taxes. We develop a number of rules of harmonisation and derive conditions under which they lead to potential Pareto improvement.

The tithe: Public research university STEM faculty perspectives on sponsored research indirect costs

This study sought to understand the phenomenon of faculty involvement in indirect cost under-recovery. The focus of the study was on public research university STEM (science, technology, engineering and mathematics) faculty, and their perspectives on, and behavior towards, a higher education fiscal policy. The explanatory scheme was derived from anthropological theory, and incorporated organizational culture, faculty socialization, and political bargaining models in the conceptual framework. This study drew on two key assumptions. The first assumption was that faculty understanding of, and behavior toward, indirect cost recovery represents values, beliefs, and choices drawn from the distinct professional socialization and distinct culture of faculty. The second assumption was that when faculty and institutional administrators are in conflict over indirect cost recovery, the resultant formal administrative decision comes about through political bargaining over critical resources. The research design was a single site, qualitative case study with a focus on learning the meaning of the phenomenon as understood by the informants. In this study the informants were tenured and tenure track research university faculty in the STEM fields who were highly successful at obtaining Federal sponsored research funds, with individual sponsored research portfolios of at least one million dollars. The data consisted of 11 informant interviews, bolstered by documentary evidence. The findings indicated that faculty socialization and organizational culture were the most dominant themes, while political bargaining emerged as significantly less prominent. Public research university STEM faculty are most concerned about the survival of their research programs and the discovery facilitated by their research programs. They resort to conjecture when confronted by the issue of indirect cost recovery. The findings direct institutional administrators to consider less emphasis on compliance and hierarchy when working with expert professionals such as science faculty. Instead a more effective focus might be on communication and clarity in budget processes and organizational decision-making, and a concentration on critical administrative support that can relieve faculty administrative burdens. For higher education researchers, the findings suggest that we need to create more sophisticated models to help us understand organizations dependent on expert professionals.

A crisis for public-private partnerships (PPPs)?

The credit squeeze and recession are combining to make PPPs almost impossible to finance, anywhere in the world. Traditional government borrowing and procurement can still be used to implement infrastructure programmes.