Dissected debt : developing a better legislative response to FCT v Myer Emporium Ltd

After many decades of actual and proposed reform, Australia's rules for the taxation of debt arrangements remain deeply flawed. A notable problem is the absence of appropriate rules for dissected debt arrangements, where a creditor dissects a debt into interest and principal
repayment components and disposes of one or both of these separately, as occurred in the leading case ofFCT v Myer Emporium Ltd. The knee-jerk reaction to Myer by the High Court and the legislature is a model of bad tax policy and bad tax law. The approach adopted overseas, using the United States as the clearest example, is a logical one for Australia to follow.

Tourism, taxes and immiserization: A trade theoretic analysis

Many countries promote tourism as a device for earning foreign exchange and promoting domestic welfare and growth. In all these countries the non-traded goods (internationally not traded) are consumed by both domestic residents and tourists. It is well known that the relative price of non-traded goods and services is determined in the local market – hence the tourist demand results in monopoly power in trade for the host country. We use a very simple two-country model to demonstrate the specific nature of the offer curve and the trade equilibrium and the difficulties of taxation.

Characterising derivative-based loan arrangements

The income tax and GST laws contain an array of rules that apply to debt and gains in the nature of interest. The definitions of 'debt' or 'loan' and amounts in the nature of 'interest' vary across the provisions and tax officials, taxpayers and courts must decide whether the terms should be read as applying to debt, loans or interest in a narrow legal sense or should be read more broadly to catch multi-element arrangements that give effect to a debt or loan relationship in an economic or commercial sense but not in conventional single document form. This article reviews the UK, US and Australian approaches to interpreting multi-element transactions and considers whether four tax provisions dealing with debt should be interpreted to apply to multi-element, derivative-based loan arrangements.

Capital gains tax in South Africa : lessons from Australia?

In the budget review of23 February 2000, the South African Minister of Finance announced that a capital gains tax ('CGT') would be introduced into South Africa, the anticipated start date at that point being 1 April 2001. Pursuant to Taxation Laws Amendment Act 5 of 2001, a CGT of general operation was introduced into the South African Income Tax Act 58 of 1962 (the 'ITA 1962') through the insertion of the Eighth Schedule¹, read together with s 26A of the Act. Section 26A is the charging provision that states that a person's taxable income included their 'taxable capital gain'. As discussed below, the start date was revised to 1 October 2001.

Isolated transactions: current income tax implications

Profits from isolated transactions will often be potentially caught by the capital gains tax provisions of the income tax legislation. Because the provisions usually tax gains at concessional rates but only apply to gains that are not otherwise taxable, it is important to determine when gains from isolated transactions constitute ordinary income. This article discusses when isolated transactions generate ordinary income, as well as briefly mentioning what statutory provisions they might be assessable under. Isolated transactions will generate ordinary income when the transaction has the sufficient indicia of a business, or when it comes under one of the strands of Commissioner of Taxation (Cth) v Myer Emporium Ltd (1987) 163 CLR 199. However, the law in this area is complex and unclear in parts. The relevant tax ruling, TR 92/3, is incomplete and at times inaccurate and so is of very limited assistance.

The hazards of starting and quitting smoking: some Australian evidence

The empirical analysis employs individual level data from the Australian Health Survey combined with retrospective data on tobacco price matched to the age at which the individual started and quit smoking. Split-population hazard models are estimated for both starting and quitting smoking. The analysis suggests price plays a significant role in the decision to start smoking but not in the decision to quit. Further sensitivity analysis of different age groups and an alternative data source, questions the robustness of the significant role of price in the smoking initiation decision. From a policy perspective, the results indicate that increases in tobacco taxation can be an important instrument in reducing the incidence of smoking, but should be combined with other mechanisms such as mandating smoke-free environments and antismoking education. Our results strongly support the targeting of antismoking campaigns towards teenagers.

Socratic teaching, the law and professional identity

This paper uses critical discourse analysis of interactions between law students and their lecturer to show how ‘Socratic’ teaching is used as a powerful technique to shape student identities. Data from a moot or simulated court in taxation law is analysed to show how students position themselves and are positioned as legal professionals. The paper argues that one student’s poor performance in the moot can be interpreted as resistance to attempts to influence her to adopt an uncongenial speaking position. This example supports the view that the difficulty law students have in learning to ‘think like a lawyer’ results not from a failure of skill but from the problems they have in assuming the speaking position of a legal professional. It is suggested that educators should consider helping students come to terms with the fragmented and contradictory subject positions associated with professionalisation.

Stakeholder and gender characteristics of mining and energy IPO boards of directors

The mining and energy sectors are particularly publicly sensitive sectors and subject to a high degree of public scrutiny. Evan and Freeman (1993) suggest that such public scrutiny needs may be better met by having direct public stakeholder representation on the board of directors. Similarly, Bilimoria (2000) argues a strong commercial case for engaging women on boards. This paper investigates the number and proportion of non equity holding public stakeholder directors and the number and proportion of women directors on the boards of Australian mining and energy company initial public offerings (IPOs) and reports a paucity of public stakeholder directors and also a low proportional female representation on such IPO boards.

Public finance and income redistribution in interwar Australia: towards a class analysis

In this paper I focus on a neglected aspect of Australian political history, the extent to which Australian governments actually redistributed income. The German sociologist Rudolf Goldscheid argued that 'the budget is the skeleton of the state stripped of all misleading ideologies'. In Australia a party that claimed to represent lower income earners, the Labor Party, was a major political force, but did Labor actually make a difference to the distribution of income across social classes, or did Labor's rhetoric of equity merely serve to incorporate workers into the capitalist system? A quantitative approach to the political history of labour may enable us to escape both nostalgia for old labourism (which the Howard years have encouraged) and a simple and undifferentiated rejection of labourism as a reformist agent of social integration.

This paper incorporates some material from a 2005 paper that examined overall expenditure patterns and taxation patterns across the states and Commonwealth from 1910 to 1940 but it goes beyond the aggregate approach of this paper to consider the extent which the varying patterns of taxation and public expenditure across Australia impacted on different social classes during the 1930s. It is very much a preliminary analysis based on existing compilations of taxation statistics. It is a static analysis and does not consider if nominally redistributive taxation and expenditure patterns might be rendered ineffective by consequent interstate migration.

Global eT@axation : competing visions

The Organization for Economic Cooperation and Development (OECD) places the issue of taxation of cross-border e-commerce transaction as one of its top four projects for investigation. In January 2001, some member countries agreed to a series of guidelines on how to apply existing tax treaties to Web transactions. After discussing potential threats and challenges facing etax administrators and possible solutions, the researchers report on the global momentum towards Extranets for collaborative knowledge management. Previous research indicated a need for a global etaxation Extranet for knowledge management based on the principles of the Cochrane Collaboration in the health sciences. These preliminary findings have been strengthened by parallel moves by the International Organization for Standardization (ISO) in setting up a global Extranet. The global imperative for harmonization of Internet commerce tax initiatives is reflected in contemporary interest in Europe in the redefinition of business requirements and processes related to corporate tax obligations.

A model for the implementation of strategic human resource management

This paper has been developed out of an action research project involving the Australian Taxation Office (ATO). One of the outcomes of this project was the development of a model for the implementation of Strategic Human Resource Management (SHRM) for the purpose of cultural change and/or alignment to business strategy.

The paper brings together many of the theories that have arisen in SHRM in the last decade or so, including theories around human capital, the resource-based view, HR configuration, HR architecture, vertical and horizontal fit, HR systems and HR roles.

Income tax test, materials & essential cases

A comprehensive cases and materials book intended for commerce or law students undertaking semester-length courses in Australian income tax law.

Concise income tax

This is a thorough yet concise examination of the most significant areas of taxation law. Cassidy identifies the key elements underlying the statutory provisions, uses a plain English writing style, and a simple, clear format. The text discusses the relevant provisions of the Income Tax Assessment Act 1997.