Improving our superannuation regime : a post-Henry review look at superannuation taxation, raising superannuation balances and longevity insurance

This paper examines what, if any changes should be made regarding certain aspects of the superannuation system. Specifically, it looks at possible changes to the superannuation tax regime, measures intended at increasing superannuation balances, as well as policies aimed at improving the price and availability of retirement income streams. The recommendations of the final report of the Henry Review on these issues are also critically evaluated. The paper finds that a greater targeting of superannuation tax concessions towards middle and lower income earners would make the system more equitable and achieve other desirable goals such as increasing voluntary savings. Furthermore, the available evidence suggests that the current mandatory contributions rate of 9% is adequate, and a higher contributions rate is likely to have more costs than benefits. On the issue of superannuation income streams, the article finds that whilst taxpayers should continue to be allowed to take their superannuation as a lump sum, policies should be implemented to make lifetime annuities more readily available and better value for money. The Henry Review's recommendations on these issues, with some exceptions, are for the most part sound and based on logic.

A comparative analysis of decision trees vis-à-vis other computational data mining techniques in automotive insurance fraud detection

The development and application of computational data mining techniques in financial fraud detection and business failure prediction has become a popular cross-disciplinary research area in recent times involving financial economists, forensic accountants and computational modellers. Some of the computational techniques popularly used in the context of - financial fraud detection and business failure prediction can also be effectively applied in the detection of fraudulent insurance claims and therefore, can be of immense practical value to the insurance industry. We provide a comparative analysis of prediction performance of a battery of data mining techniques using real-life automotive insurance fraud data. While the data we have used in our paper is US-based, the computational techniques we have tested can be adapted and generally applied to detect similar insurance frauds in other countries as well where an organized automotive insurance industry exists.

Insuring for a crisis: deposit insurance and the GFC, the Australian and New Zealand experience

Deposit insurance schemes were an important element in policy responses to the global financial crisis (GFC). There has been considerable debate about the nature and efficacy of such policy measures in alleviating the fallout from financial crises. The GFC highlighted problems associated with deposit insurance schemes including moral hazard, coverage limits, co-insurance, cross border issues and market distortions. Despite these shortcomings, deposit insurance schemes were able to ameliorate the financial panic experienced and reduce contagion. This paper evaluates the Australian and New Zealand experience with deposit insurance introduced in response to the GFC, and compares this to the OECD experience. It reflects on the performance of deposit insurance schemes considered against the attributes of good policy design, and evaluates the specific problems and strengths encountered during the GFC.

Private Health Insurance Status and Utilisation of Dental Services in Australia

This article focuses on the relationship between private insurance status and dental service utilisation in Australia using data between 1995 and 2001. This article employs joint maximum likelihood to estimate models of time since last dental visit treating private ancillary health insurance (PAHI) as endogenous. The sensitivity of results to the choice between two different but related types of instrumental variables is examined. We find robust evidence in both 1995 and 2001 that individuals with a PAHI policy make significantly more frequent dental consultations relative to those without such coverage. A comparison of the 1995 and 2001 results, however, suggests that there has been an increasing role of PAHI in terms of the frequency of dental consultations over time. This seems intuitive given the trends in the price of unsubsidised private dental consultations. In terms of policy, our results suggest that while government measures to increase private health insurance coverage in Australia have been successful to a significant degree, that success may have come at some cost in terms of socio-economic inequality as the privately insured are provided much better access to care and financial protection.

Area-level unemployment and perceived job insecurity: evidence from a longitudinal survey conducted in the Australian working-age population

Research significance: Job insecurity, the subjective individual anticipation of involuntary job loss, negatively affects employees’ health and their engagement. Although the relationship between job insecurity and health has been extensively studied, job insecurity as an ‘exposure’ has received far less attention, with little known about the upstream determinants of job insecurity in particular. This research sought to identify the relationship between self-rated job insecurity and area-level unemployment using a longitudinal, nationally representative study of Australian households. Methods: Mixed-effect multi-level regression models were used to assess the relationship between area-based unemployment rates and self-reported job insecurity using data from a longitudinal, nationally representative survey running since 2001. Interaction terms were included to test the hypotheses that the relationship between area-level unemployment and job insecurity differed between occupational skill-level groups and by employment arrangement. Marginal effects were computed to visually depict differences in job insecurity across areas with different levels of unemployment. Results: Results indicated that areas with the lowest unemployment rates had significantly lower job insecurity (predicted value 2.74; 95% confidence interval (CI) 2.71–2.78, P < 0.001) than areas with higher unemployment (predicted value 2.81; 95% CI 2.79–2.84, P < 0.001). There was a stronger relationship between area-level unemployment and job insecurity among precariously and fixed-term employed workers than permanent workers. Conclusion: These findings demonstrate the independent influences of prevailing economic conditions, individual- and job-level factors on job insecurity. Persons working on a casual basis or on a fixed-term contract in areas with higher levels of unemployment are more susceptible to feelings of job insecurity than those working permanently.

Cause and effect in studies on unemployment, mental health and suicide: a meta-analytic and conceptual review

Background There are ongoing questions about whether unemployment has causal effects on suicide as this relationship may be confounded by past experiences of mental illness. The present review quantified the effects of adjustment for mental health on the relationship between unemployment and suicide. Findings were used to develop and interpret likely causal models of unemployment, mental health and suicide. Method A random-effects meta-analysis was conducted on five population-based cohort studies where temporal relationships could be clearly ascertained. Results Results of the meta-analysis showed that unemployment was associated with a significantly higher relative risk (RR) of suicide before adjustment for prior mental health [RR 1.58, 95% confidence interval (CI) 1.33–1.83]. After controlling for mental health, the RR of suicide following unemployment was reduced by approximately 37% (RR 1.15, 95% CI 1.00–1.30). Greater exposure to unemployment was associated with higher RR of suicide, and the pooled RR was higher for males than for females. Conclusions Plausible interpretations of likely pathways between unemployment and suicide are complex and difficult to validate given the poor delineation of associations over time and analytic rationale for confounder adjustment evident in the revised literature. Future research would be strengthened by explicit articulation of temporal relationships and causal assumptions. This would be complemented by longitudinal study designs suitable to assess potential confounders, mediators and effect modifiers influencing the relationship between unemployment and suicide.

Duration of unemployment and suicide in Australia over the period 1985–2006: an ecological investigation by sex and age during rising versus declining national unemployment rates

Background The relationship between unemployment and suicide may be sensitive to demographic factors, national unemployment rates, and length of time without employment. This study investigated these factors in relation to suicide in Australia for the period 1985–2006, in an ecological study. Methods The outcome variable was annual suicide rate by age group, sex and the eight states and territories over 22 years of observation (total observations=1760). The main predictor variable was the average duration of unemployment in the population, categorised into three time periods (<2 weeks, 2–4 weeks, >4 weeks). Poisson regression models were used to investigate the relationship between duration of unemployment and suicide over the years 1985–2006 in a series of cross-sectional analyses. Interaction analyses indicated significant differences during periods of declining or increasing labour market opportunity and by age group. Results During periods of declining unemployment rates in the country, longer durations of unemployment were associated with higher male suicide rates. During periods of increasing unemployment in the country, longer unemployment duration was associated with lower male suicide rates. Effect modification was also apparent by age-group, with stronger associations between unemployment duration and male suicide evident in those aged 25–34 and 55–64, and weaker associations in those aged 15–24 and 44–54 years. Longer length of unemployment was not associated with an increase in female suicide rates. Conclusions The labour market opportunities in Australia modified the effect of duration of unemployment on suicide, and the effect was more prominent in men and older age groups. This may reflect social norms and acceptability about unemployment, as well as life-stage influences associated with transitions into and out of the labour market.