Australian tort law reform: statutory principles of causation and the common law

By mid-2004, Parliaments in each Australian jurisdiction will either complete or will be in the process of partial codification of the law of torts. The reforms, including those to the law of negligence, are extensive. This article focuses on codification of the law of causation as an element of the cause of action in negligence. It examines the background to "tort reform", as the process has been labelled, and discusses the common law paradigm of negligence and various approaches to causation. It then analyses and compares the causation provisions in each jurisdiction.

The trouble with income trusts

This paper sketches broadly the efficiency and equity effects of income trusts that make their use as a substitute for the direct holding of shares of a corporation problematic for tax policy purposes. The paper also considers the potential effectiveness of an equity recharacterization rule applicable to the high-yield junk debt that is the common feature of the basic income trust structure. The author suggests that this type of narrowly focused rule would be more target-efficient than other possible responses to income trusts, such as fundamental reform of the corporate income tax or the restrictions on the holding of trust units proposed in the 2004 budget. However, a principal difficulty in designing an equity recharacterization rule is ensuring that it applies equally to structures that realize the same effect as the basic income trust structure but do not use high-yield junk debt.
The author argues that income trusts are examples of tax-driven financial innovation in the sense that they replicate an existing set of securities and therefore have no nontax rationale. These securities are essentially redundant, and the innovative process of which they are a product does not constitute “genuine” financial innovation. This essential characteristic of income trusts distinguishes them from real estate investment trusts, which arguably do not present a tax policy problem (or at least not the same one). More particularly, income trust transactions are redundant in the sense that they do not complete capital markets by providing investors with a risk and return payoff profile that is otherwise unavailable. In the absence of any efficiency gains or desirable distributional effects associated with income trusts, the available tax benefit is the subject of a defensible government response intended to eliminate it. But without any clear evidence that income trusts are substituted generally for the corporate form, any response can defensibly be limited to a narrowly targeted one that introduces a “taxlaw friction” by shifting the debt-equity boundary that is the focus of the basic income trust structure. Because the precise dividing points along this boundary lack any obvious normative content, the suggested policy focus should be the development of a legislative response that redraws the debt-equity boundary in a manner that minimizes perceived efficiency losses otherwise associated with the use of income trusts.

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.

Ambiguities and inconsistencies in relation to the obligations of proxies under corporations law: a model for reform

This article reconsiders the important question which came to light as a result of the controversial 2002 Coles Myer annual general meeting: do directors that are appointed as proxy have an obligation to vote as directed (and indeed should they)? A recent decision of the New South Wales Supreme Court, which was subsequently approved on appeal, stands for the proposition that proxy holders are agents of the shareholders that appointed them. However, currently the Corporations Act only requires a Chairman appointed as proxy to vote as directed — not an ordinary director. This article briefly explains the present state of the law in Australia on this issue, and then explores some interesting recent judicial remarks which may suggest that ordinary directors appointed as proxy must vote as directed in order to satisfy their director’s duties (both common law and statutory) to the company. We finally outline a proposed statutory reform initiative which seeks to remove the present uncertainty in the law by introducing a blanket requirement that all proxy holders must vote as directed.

Moving personal tax online: the Australian Taxation Office's E-Tax initiative

In exploiting the capabilities of online technologies, governments have developed policies and launched projects to conduct transactions and deliver their services through the Internet. The motivations for this include cost cutting, efficiency improvements, service enhancements, and leadership in business transformation. However, these diverse goals are not necessarily consistent, especially in the early stages of implementation. The e-government initiative discussed in this case study (E-Tax) provided an additional service to individual Australian taxpayers by enabling them to file their tax returns online. This case study provides an analysis of the E-Tax implementation in the first three years of its operation. Data on E-Tax use compared to other filing methods show that the package worked well technically, was favorably received by users, and was consistent with policy on e-government. However, adoption levels in the early stages did not meet government targets. The analysis suggests that impediments to a greater level of E-Tax use included entrenched patterns of filing, the nature of the taxation system, and political sensitivities. The E-Tax case demonstrates how complex e-government projects can be and the need to take contextual factors into account in planning and evaluating e-government implementation.

Directors' duties to stakeholders : a reform proposal based on three false assumptions

The Corporations and Markets Advisory Committee has been asked to consider whether the duties of directors under the Corporations Act 2001 (Cth) should be broadened to require directors to take into account the interests of stakeholder groups other than shareholders when making corporate decisions. In this article, the author argues that the existing statutory duties of directors in Australia should remain unchanged. The existing duties of directors, in particular the overriding duty of directors to act in the best interests of the company, already accommodates consideration of stakeholder interests by directors if the decision is justifiable as being in the company's best interests. Furthermore, corporate culture and norms are moving towards embracing stakeholder engagement, again with the implicit recognition that integrating stakeholder considerations within the decision-making processes of companies is integral to achieving long-term sustainable growth.

Selection, exclusion and assimilation: the project lambert of 1931 on the reform of French immigration policy

The unemployment crisis of 1926-7 focused attention onto the question of immigration. Historians of this period have generally focused on the crisis of public policy and popular antipathies towards foreigners; more recently historians have become attuned to voices of racism. Less attention has been paid to attempts to redress the policy weaknesses through a new legislative regime on immigration. This paper reviews one such proposal, made by Charles Lambert, a deputy from the Rhone, in 1931. Instrumental in a revision of the naturalization law in 1927 to encourage the assimilation of foreigners through the acquisition of French citizenship, Lambert proposed a comprehensive statute on immigration to select “desirable” foreigners and exclude the “undesirables” to promote the assimilation of the “better” elements. The paper argues that his rationale betrays a profound fear of mounting French weakness in the face of economic and demographic decline, and grave anxieties for the future health of the French nation.

"To GAAR or not to GAAR-that is the question:" Canadian and Australian attempts to combat tax avoidance

In both Canada and Australia the relevant governments found their initial legislative attempts to combat tax avoidance to be ineffective. In time in each country it was concluded that the respective general avoidance provisions were of limited application and avoidance provisions were of limited application and ineffective to combat the sophisticated tax avoidance schemes promoted by tax advisers. In Canada it was determined that Income Tax Act, R.S.C 1985, s. 245(1) would be repealed and replaced with a general anti-avoidance rule ('GAAR') contained in a new s. 245 ITA. The Australian government similarly decided to replace Income Tax Assessment Act, Cth. 1936, s. 260 with a new general anti-avoidance measure, Part IVA ITAA. This article compares and contrasts the Canadian and Australian GAARs. Through the evaluation of each regime the article seeks to identify which model is most effective. It will be sen which model is most effective. It will be seen that both regimes have some features that are preferable to the other and thus both GAARs might be improved by incorporating aspects of the other anti-avoidance model.

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 Chinese state enterprise sector: labour market reform and the impact on male-female wage structure

The paper examines the wage structure in the Chinese state enterprise sector between 1981 and 1987. This period is of particular interest given the introduction of major labour market reforms in China during the early 1980s. In essence the reforms represented a movement away from administratively determined prices towards a market–oriented system combined with a relatively flexible system of labour allocation. The Juhn, Murphy and Pierce (1991) decomposition is employed to shed light on the role of changing labour market institutions over the period.

A legitimate paradox : neo-liberal reform and the return of the state in Korea

This article examines the neo-liberal reforms that the Kim government implemented in post-crisis Korea. It argues that by embracing the reforms, the state, paradoxically, re-legitimised itself in the national political economy. The process of enacting the reforms completed the power shift from a collusive state-chaebol alliance towards a new alliance based on a more populist social contract - but one that nonetheless generally conformed to the tenets of neo-liberalism. Kim and his closest associates identified the malpractices of the chaebols as the main cause of the crisis, so reforming the chaebols would be the key to economic recovery. Combining populism and neo-liberalism, they drew on support from both domestic and international sources to rein in, rather than nurture, the chaebols.

Market virtues and public failures : antecedents to public sector reform in the contract state

This paper considers the historical factors that have contributed to the pressures for reform in the Australian State of Victoria which proved to be more radical than paths taken by the Commonwealth Government and any other Australian states. As public management in Victoria made tentative steps towards market orientated practices, the inexperienced public officials, together with a mixture of political, economic, administrative and social factors made the government more vulnerable to a perceived need for reform. Australia, like the United Kingdom and New Zealand with which it shares similarities of government structure, commenced the path of reform in a tentative manner with major reforms being implemented by powerful leaders. Powerful reformers were Margaret Thatcher in the United Kingdom, a group of like minded politicians from Treasury in New Zealand and in the Australian State of Victoria, Jeff Kennett. Each capitalised on a sense of crises to move their reform agenda forward at a rapid pace. Victoria is offered as an illustration of how the past provides a means of understanding why Premier Jeff Kennett was able during the 1990's, to implement public sector reform into Victoria in such a dramatic way.

Transacting with citizens: Australian government policy, strategy and implementation of online tax lodgement

Many governments have shown leadership in encouraging their citizenry to conduct transactions on-line. The policies that underpin these initiatives refer to a blend of civic benefits and efficiency goals. They combine the rhetoric of customer service with social shaping through ‘government as model user’ and procedures that require online activities. Many initiatives are described as ‘electronic service delivery’, terms that indicate an intention to provide much more than an additional channel for government interaction with citizens. Australia, as an innovator in eGovernment is a good example of this approach and its national government has specified policy goals for its online strategy. In this paper we examine the case of one Australian online delivery initiative, electronic tax lodgement (e-tax) and consider how well that initiative has met the policy goals of the government. Combining insights from Rogers’ Diffusion of Innovation theory and political analysis, we outline potential difficulties that governments face in implementing ESD initiatives. Our conclusion from this case study is that the provision of good technology is only a small part of the ESD challenge. It shows how success of an ESD implementation may yield contradictory outcomes in terms of overall eGovernment strategies. This case highlights the need for long-term
implementation plans and integration of initiatives with broader government strategy.