Academic literature on the topic 'Financial risk – Australia'
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Journal articles on the topic "Financial risk – Australia"
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Kesavayuth, Dusanee, Kaung Myat Ko, and Vasileios Zikos. "Financial risk attitudes and aging in Australia." Australian Economic Papers 59, no. 1 (January 13, 2020): 43–54. http://dx.doi.org/10.1111/1467-8454.12169.
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Guesmi, Khaled, Frederic Teulon, and Amine Lahiani. "Australias Integration Into The ASEAN-5 Region." Journal of Applied Business Research (JABR) 29, no. 6 (October 29, 2013): 1607. http://dx.doi.org/10.19030/jabr.v29i6.8198.
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This paper attempts to evaluate the time-varying integration of Australian stock market in ASEAN-5 region (ASEAN + Australia, Korea, China, India and Japan) by using a conditional version of the international capital asset pricing model (ICAPM) allowing for dynamic changes in the degree of market integration, regional market risk price, currency risk price and domestic market risk price. Main findings are as follows: i) the prices of risk in Australia are extremely sensitive to major international economic and political events such as the different monetary and financial crises in international financial market; ii) the level of market openness and development of the stock market satisfactorily explain the time-varying degree of Australian stock integration.
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Hill, Jennifer G. "Regulatory Cooperation in Securities Market Regulation: Perspectives from Australia." European Company and Financial Law Review 17, no. 1 (March 5, 2020): 11–34. http://dx.doi.org/10.1515/ecfr-2020-0003.
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The global financial crisis highlighted the interconnectedness of international financial markets and the risk of contagion it posed. The crisis also emphasized the importance of supranational regulation and regulatory cooperation to address that risk. Yet, although capital flows are global, securities regulation is not. As a 2019 report by IOSCO notes, the regulatory challenges revealed during the global financial crisis have by no means dissipated over the last decade. Lack of international standards, or differences in the way jurisdictions implement such standards, can often result in regulatory-driven market fragmentation. This article considers a range of cooperative techniques designed to achieve international regulatory harmonization and effective financial market supervision. It includes discussion of a high profile cross-border supervisory experiment, the 2008 US-Australian Mutual Recognition Agreement, which was the first agreement of its kind for the SEC. The article also examines some key regulatory developments in Australia and Asia since the time of the US-Australian Mutual Recognition Agreement.
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Nguyen, Justin Hung. "Carbon risk and firm performance: Evidence from a quasi-natural experiment." Australian Journal of Management 43, no. 1 (July 21, 2017): 65–90. http://dx.doi.org/10.1177/0312896217709328.
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This article examines the effect of carbon risk on firm performance, exploiting the Australia ratification of Kyoto Protocol in December 2007 as an exogenous shock. The article finds that polluters, firms in highest-emitting industries, experience a reduction in financial performance relative to controlling non-polluters subsequent to the ratification, and the effect is more pronounced among financially constrained firms. The results are robust to various definitions of polluters, measures of financial constraints, falsification tests on the timing of the Kyoto adoption and the impact of the Global Financial Crisis. The evidence suggests a negative association between carbon risk and firm performance.
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Thai, Kevin Huu Phat, and Jacqueline Birt. "Do Risk Disclosures Relating to the Use of Financial Instruments Matter? Evidence from the Australian Metals and Mining Sector." International Journal of Accounting 54, no. 04 (December 2019): 1950017. http://dx.doi.org/10.1142/s1094406019500173.
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This paper investigates the value relevance of risk disclosures relating to the use of financial instruments in the Australian metals and mining sector. The metals and mining sector is the largest sector in Australia by the number of companies and includes several of the world’s largest diversified resource producers. Using a manually constructed disclosure index based on AASB 7 Financial Instruments: Disclosures, we find that financial instrument-related risk disclosures provide useful information to equity investors. In terms of individual risk category, liquidity risk is shown to be the most informative risk disclosure. We contribute to a stream of the literature examining the informativeness of risk disclosures. The results of this study have implications for several stakeholders regarding the quality assessment of risk reporting. In addition, the findings are of interest to standard setters since further regulatory changes are under consideration to improve the presentation and disclosure of financial instruments.
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Thomson, Dianne, and Ameeta Jain. "Corporate Governance Failure And Its Impact On National Australia Banks Performance." Journal of Business Case Studies (JBCS) 2, no. 1 (January 1, 2006): 41–56. http://dx.doi.org/10.19030/jbcs.v2i1.4879.
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The National Australia Bank (NAB) is the largest financial services institution listed on the Australian stock exchange and is within the 30 most profitable financial services organisation in the world. In January 2004, the bank disclosed to the public that it had identified losses relating to unauthorised trading in foreign currency options amounting to AUD360 million. This foreign exchange debacle was classified as operational risk, the risk of loss resulting from inadequate or failed processes, people, or systems and reiterated the importance of corporate governance for banks. Concurrent issues of National Australia Banks AUD4.1 billion loss on US HomeSide loans in 2001, the degree of strength of their risk management practices and lack of auditor independence, were raised by the US Securities and Exchange Commission in 2004, reinforcing the view that corporate governance had not been given the priority it deserved over a number of years. This paper will assess and critically analyse the impact of corporate governance failure by management and Board of Directors on NABs performance over the years 2001-2005.
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Castellas, Erin I.-Ping, Jarrod Ormiston, and Suzanne Findlay. "Financing social entrepreneurship." Social Enterprise Journal 14, no. 2 (May 8, 2018): 130–55. http://dx.doi.org/10.1108/sej-02-2017-0006.
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Purpose This paper aims to explore the emergence and nature of impact investment in Australia and how it is shaping the development of the social enterprise sector. Design/methodology/approach Impact investment is an emerging approach to financing social enterprises that aims to achieve blended value by delivering both impact and financial returns. In seeking to deliver blended value, impact investment combines potentially conflicted logics from investment, philanthropy and government spending. This paper utilizes institutional theory as a lens to understand the nature of these competing logics in impact investment. The paper adopts a sequential exploratory mixed methods approach to study the emergence of impact investment in Australia. The mixed methods include 18 qualitative interviews with impact investors in the Australian market and a subsequent online questionnaire on characteristics of impact investment products, activity and performance. Findings The findings provide empirical evidence of the rapid growth in impact investment in Australia. The analysis reveals the nature of institutional complexity in impact investment and highlights the risk that the impact logic may become overshadowed by the investment logic if the difference in rigor around financial performance measurement and impact performance measurement is maintained. The paper discusses the implications of these findings for the development of the Australian social enterprise sector. Originality/value This paper provides empirical evidence on the emergence of impact investment in Australia and contributes to a growing global body of evidence about the nature, size and characteristics of impact investment.
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Bergami, Roberto. "International Delivery Risks: The Case of Delivered Duty Paid in Australia." Acta Universitatis Bohemiae Meridionalis 19, no. 1 (June 1, 2016): 1–9. http://dx.doi.org/10.1515/acta-2016-0005.
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Abstract The choice of delivery terms in international contracts has significant impact on both physical and financial risks for importers and exporters. This paper considers implications resulting from a recent Australian tribunal case involving transactions based on Delivered Duty Paid (DDP) terms (Incoterms). This case highlights how importers may become exposed to unexpected financial penalties caused by incorrect processes from foreign suppliers that result in duty and taxation payment shortfalls. The discussion focuses on the risk elements related to DDP for importers and the interpretation of legislation and policy documents. A chronological timeline of events is provided to explain the changes in policies and interpretation related to ownership as defined by Australian customs legislation. The conclusion is that, due to customs considerations and the decision of the tribunal in this case, DDP may no longer be a viable option for international trade transactions, not only in Australia, but also in other nations.
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Black, Warren, Geoffrey Cann, and Darren Gerber. "Nine principles for establishing a risk-intelligent major capital project." APPEA Journal 53, no. 2 (2013): 495. http://dx.doi.org/10.1071/aj12106.
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The reality of major capital projects With almost $1 trillion of investor capital being committed to major capital projects across Australia, the competition to secure adequate skills, machinery, materials, operating licenses, contractor support, and associated infrastructure has increased significantly, putting pressure on supply and yielding unique delivery risks. Furthermore, the sheer magnitude and complexity of these projects, combined with market conditions and the high value of the Australian dollar, has increased risk profiles to the point where such projects may threaten the financial security of owners and investors. The reality is that major capital projects can significantly enhance or erode shareholder value, depending on how well they are executed. Considering their high-impact nature, levels of governance, risk management, and assurance need to be strengthened. Risk intelligence in major capital projects As part of Deloitte's ongoing relationship with some of the most prominent major capital project entities in Australia, the authors have assessed a number of mega projects to determine what commonalities exist in light of risk management better practice. The authors have consolidated their observations into their latest contribution to Australian industry: Nine Principles to Establishing a Risk Intelligent, Major Capital Project. This extended abstract outlines what the authors believe the top Australian major capital projects are doing to control risk, while pursuing their delivery objectives. How are project officers securing clear accountability in complex stakeholder environments? How are they keeping owners and investors assured? How are they de-mystifying emerging risk scenarios?
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Inamura, Tomohiko, Francis Lobo, Rie Hirose, and Hajime Sano. "Natural catastrophe risk modelling for northwest Australia offshore installations." APPEA Journal 57, no. 2 (2017): 473. http://dx.doi.org/10.1071/aj16100.
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Offshore installations are exposed to several natural hazards. The greatest is severe weather caused by hurricanes and cyclones. Such storms can be devastating, causing widespread damage and financial loss. Insurance companies offer a range of products that insure against potential losses, including physical damage, control of well, sue and labour, removal of wreck, business interruption and liability. This paper describes the development of the first stochastic natural catastrophe model for the northwest Australian coastal region. It is based on Monte Carlo simulations and uses scientific and engineering knowledge alongside actual insurance claims data to evaluate aggregate storm exposures for the offshore industry in this region. The model enables quantitative assessment of cyclone risk by developing an improved database through the compilation of available meteorological data. Its development is designed to allow the sustainable and reasonably priced supply of insurance, which is essential to the further extension of exploration and production activities and investment in Australia.
Dissertations / Theses on the topic "Financial risk – Australia"
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Probohudono, Agung Nur. "A comparative analysis of voluntary risk disclosures." Thesis, Curtin University, 2012. http://hdl.handle.net/20.500.11937/2132.
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This thesis examines voluntary risk disclosures from 600 firm year annual reports in four countries’ (Australia, Indonesia, Malaysia, and Singapore) manufacturing listed companies for the 2007-2009 financial years. This is an important time span to investigate risk disclosures as it encompasses those years most directly impacted by the Global Financial Crisis (GFC). Longitudinal and cross country analyses test the veracity of agency theory to predict the level of firms’ risk disclosures. A comprehensive risk disclosure index (RDI) checklist is created and tested to explain the extent of such communication over time. T-tests, ANOVA, correlations and regression analysis are used for the statistical testing.The findings show that overall RDI scores over the economically-challenging GFC time period is relative low averaging 33.73%. The RDI rises every year ranging from 31.46% in 2007, 34.20% in 2008, and 35.54% in 2009. There is a vast disparity of communication across the various risk elements. The RDI item “Identifying, evaluating and managing significant risks” has the highest level of communication (91.17%), while “Effects of inflation on assets quantitative’’ is the lowest RDI item with no disclosure (0 %). The highest major sub-category for RDI is business risk (46.55%) while the strategy risk category (17.21%) is the lowest communicated.Multiple regression analysis provides evidence that size, managerial ownership, board independence, and profitability are positively associated with the extent of voluntary risk disclosure. There are also clear country differences, for instance, Indonesian companies have statistically lower levels of risk disclosure compared with Malaysia. These findings are useful for self-evaluation and benchmarking of risk communication by other corporations across the global landscape. The need for mandatory regulation regarding key risks elements is advanced. Overall, varying levels of risk disclosure over time and across countries are influenced by key firm characteristics and economic drivers consistent with agency theory tenets.
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Oliver, Barry Ross. "Issues in financial risk management in Australia." Phd thesis, 2001. http://hdl.handle.net/1885/12472.
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This thesis involves a theoretical and empirical examination of issues in financial risk management with a focus on the Australian environment. The primary aim of the thesis is to contribute to the understanding of the use and impact of derivative financial instruments for financial risk management. The majority of published work in this area is from the U.S.A. Therefore, the analysis and results contained in this thesis are of interest to an international audience. The results provide new evidence, in addition to
confirmatory evidence, in relation to a number of issues. The thesis is divided into three sections with the conclusions provided in chapter eleven. The thesis is divided into three sections with the conclusions provided in chapter eleven. Following the introduction in chapter one, the first section (chapters two to five)examines issues associated with risk management. Chapter two considers some of the professional standards for the management of risk that have been issued by various
professional and regulatory bodies. Chapter three examines different types of derivative
contracts and how derivatives may be used. Measuring risk is an essential part of
managing it. Financial risk is often difficult to identify from outside the organisation because organisations may hedge any portion of the exposure. Furthermore, financial risk may arise and then cease to exist as contracts are settled in such short periods that there is little evidence outside the firm to allow identification of them. However, there have been attempts to measure exposure to financial risk and these are covered in chapter four. Chapter five examines the theoretical issues associated with hedging financial risk and the potential benefits obtained from hedging.
Section two (chapters six and seven) considers the use of derivatives in Australian Commonwealth public sector organisations. Risk management has traditionally been seen within the context of private sector organisations. However, the issue is becoming increasingly relevant and important to public sector entities as governments around the world implement policies that involve corporatisation, devolution of financial responsibility and impose competitive neutrality on their departments and bodies. Australia is no different and in some circles is seen as a world leader in the evolution of a business-orientated public sector. However, the strict translation of private sector theories and practices to the public sector, in which there are fundamental differences, may not be feasible nor desirable. Further, risk management in the public sector may require different practices and methods to achieve the desired outcomes. Chapter six introduces the empirical aspects of the thesis by considering the legal power of Commonwealth organisations in Australia to enter into derivative contracts. Public sector organisations, in particular Commonwealth statutory authorities, do not always have the powers 'of a natural person' afforded to companies governed under Australian corporations law. Such inconsistency is the base for uncertainty and possible additional costs for parties
contracting with these organisations. Chapter six concludes with possible solutions to remove the uncertainty with respect to the legal power of Commonwealth organisations to enter derivative contracts. Chapter seven examines the use of derivative contracts in Commonwealth organisations through financial statement analysis and a questionnaire survey. This chapter represents the first public study of derivative use in Commonwealth organisations in Australia. Section three (chapters eight, nine and ten) considers important issues in the efficiency of derivatives markets. Three issues are considered. Chapter eight considers the price and volatility effects surrounding expirations of 90-day Bank Accepted Bill futures contracts. The evidence as presented in chapter eight for the Australian 90-day Bank Accepted Bills
market is not sufficient to conclude that there are abnormal price or volatility effects surrounding the expiration of equivalent futures contracts. Hedgers therefore are unlikely to experience higher volatility if contracts are closed out or rolled over on maturity day. Another potential problem when hedging is pricing derivative contracts, such as options.
When derivatives, in particular option contracts, are used in risk management the price of the contract must be ascertained. The Black-Scholes option pricing model is commonly used to price options. If the model incorrectly prices options then risk management strategies will be less effective. One bias, which has been identified in studies using overseas data, is the volatility 'smile'. Risk management strategies using options should take account of the effect of this bias. Chapter nine documents the volatility smile in the
Australian stock options market. Chapter ten extends chapter nine by considering time
varying volatility in option prices. Obtaining estimates of the volatility of the underlying asset price that provide more accurate Black-Scholes option prices is important. Generally, for options already trading, the implied volatility of previous day option prices is found to produce lower pricing errors over a range of different volatility estimates, including those obtained from a Generalised AutoRegressive Conditional Heteroscedastic (GARCH) model. However, if the option is not traded, GARCH estimates provide a better alternative than historical estimates.
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Aba, Bulgu Mohammed. "Financial crisis management: application to SMEs in Australia." Thesis, 2005. https://vuir.vu.edu.au/15553/.
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The small and medium sized business sector plays a significant economic and social role in Australia. A large number of these businesses suffer from abrupt financial crises resulting from manmade or natural disasters such as fire, flood, storm, etc, which affect all business sectors in the Australian economy. There are numerous theoretical and empirical models that have been applied in relation
to corporate crisis management. The approach employed in this thesis is developed using a new theoretical framework
based on the elements of (i) financial management theories and policies such as risk management, financial engineering, portfolio theory, CAPM, capital budgeting and
optimal capital structure; (ii) accounting theories and practices including corporate financial distress and financial ratio analyses; and (iii) corporate management theories and principles with major emphasis on corporate governance, marketing management, business ethics and stakeholders analysis.
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Ford, Guy 1961, University of Western Sydney, College of Law and Business, and School of Economics and Finance. "Achieving risk congruence in a banking firm." 2005. http://handle.uws.edu.au:8081/1959.7/12022.
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One of the reasons for firms decentralising aspects of their operations is to enable managers to gain specialised knowledge of local conditions. For credit managers in a banking firm, this may take the form of knowledge of investment opportunities and the risk profiles of each of these opportunities. In light of principal-agent problems that arise when information is asymmetrical, the focal point of this dissertation is the development of incentive-compatible mechanisms that facilitate the free and accurate disclosure of the private information of managers on the risk profile of investments to the centre of the bank at the time investment decisions are being implemented. These mechanisms are required because managers may have strong incentives to misrepresent their private information when doing so has the potential to favourably impact on the size of their remuneration. This, in turn, has a direct impact on the ability of the centre to optimally allocate the capital of the bank and effectively price risk into bank investments. The dissertation commences by examining which internal risk measures act to align the investment decisions of managers in a bank with the risk/return goals of the centre of the bank. This requires knowledge of the bank risk preference function. It is initially assumed that managers have developed specialised knowledge of the opportunity set of available investments, and have no reason to misrepresent this information to the centre. This assumption is later removed and the implications assessed. In order to ensure incentive-compatibility between the centre and managers, a truth-revealing mechanism is employed in the capital allocation process and tied to the compensation payment function of the bank. This mechanism acts to ensure managers disclose their private information on the expected risks and returns in the investments under their control, and facilitates the efficient investment of capital within the bank.Doctor of Philosophy (PhD)
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Adhariani, Desi. "Financial Management, Corporate Governance and Risk Management: A Feminist Perspective Using an Optimisation Approach." Thesis, 2015. https://vuir.vu.edu.au/34682/.
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In recent years, the issue of effective corporate governance has attracted much attention, especially to promote an ethical business environment to ensure corporate accountability and integrity. In the academic sphere, the mainstream research on corporate governance and ethics has been performed using various ethics theories based on the premise of conflict of interest. This thesis uses a feminist perspective to analyse the corporate governance practices at BHP Billiton using the lens of the feminist ethics of care, as well as projecting the financial condition of the company using the same principles.
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Gonzalez, Victoria Elizabeth. "The Implementation of Basel III in an Australian Bank: Some Corporate Governance Implications." Thesis, 2016. https://vuir.vu.edu.au/32220/.
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The uncertainty in financial markets due to the global financial crisis highlights the
importance of proper prudential and regulatory practices in commercial banks, and the
economic and social costs that can be incurred if risk is not adequately identified and
managed. To manage risk, the global community is adopting the third generation of
liquidity and capital requirements developed by the Basel Committee on Banking (the
Basel III standards). There is no published study focusing on the implementation of
Basel III in the Australian banking system. To fill this gap, this study develops a bank
asset and liability management model using goal programming for one large Australian
bank, to examine the implications of a progressive move to Basel III on key financial
variables – net interest income (NII), return on equity (ROE) and return on assets
(ROA) – to undertake a preliminary stress testing analysis of the bank after Basel III
and to consider some of the governance and policy response issues involved. The
`modelling is used to investigate the impact of progressively moving to Basel III from a
Basel II base case, assuming that the bank maintains current balance sheet trends,
practices and corporate governance settings out to 2019.
The bank asset and liability goal programming model was also used to examine the
implications of two stress scenarios: the first involves an increase of 5% in net cash
outflow (NCO) and a decrease in interest income of 5%, and the second involves an
increase of 10% in net cash outflow and a decrease in interest income of 10%. Finally,
this thesis examines possible policy responses available to the banks, guided by
corporate governance, to offset some of the effects of implementing the Basel III
requirements.
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Akhtaruzzaman, Md. "Interest rate risk of Australian financial firms." Thesis, 2013. http://hdl.handle.net/1959.13/1037246.
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Research Doctorate - Doctor of Philosophy (PhD)The Australian financial system has undergone major regulatory changes during the 1970s and 1980s. The most notable deregulatory measures include the removal of interest rate ceilings on bank deposits and loans, the liberalization of foreign bank entry restrictions, and the introduction of a floating exchange rate system, among others. These deregulatory measures have increased competitive pressure on financial firms from both home and abroad and reduced net interest margin, making financial firms more vulnerable to interest rate changes. The main purpose of this thesis is to examine the exposure of Australian financial firms to domestic and foreign interest rate risk during the post-deregulation period from 1993 to 2011. The exposure of financial firms to interest rate risk is of crucial importance to practitioners, academics, and regulators, as changes in interest rates may adversely affect the value of a firm as well as the stability of the financial system. The thesis contains three inter related empirical studies on the interest rate risk exposure of Australia financial firms. The first empirical study develops a novel interest rate term structure model for Australia in terms of three underlying factors: level, slope, and curvature and evaluates Australian financial firms’ exposure to these factors in a GARCH-M framework. The value of financial firms are found to be negatively affected by the change in interest rate level factor, while the value of non-financial firms are positively affected by the change in interest rate level factor. Small banks and insurance companies demonstrate positive exposure to the change in the slope factor. Real estate firms exhibit negative sensitivity to the change in the curvature factor. Though the interest rate level is found to be the most important factor, ignoring the slope and curvature factors could lead to an underestimation of the interest rate risk exposure of financial firms. These findings are robust to controlling for the orthogonalised market return, time-varying equity risk premium and financial crises. The second study is the first attempt to examine whether interest rate factors are priced in financial stock returns in an augmented Fama-French (1993) model. This study examines the pricing of Australian financial firm stocks using five common risk factors: the market risk, firm size, book-to-market ratio, long-term interest rate and term premium. The latter two factors have not been previously considered for pricing Australian stocks within the Fama-French framework. The market risk and term premium are priced in equity returns of financial firms, but the size and book-to-market factors are not priced in their equity returns. The third study provides new evidence for the transmission of global interest rate and return shocks to Australian financial stock returns using a Dynamic Conditional Correlation (DCC) GARCH model. Australian banks exhibit negative exposure to changes in both domestic and US interest rates, while US banks have only negative exposure to domestic interest rates. In addition, US interest rate volatility is found to be an important predictor of Australian bank stock return volatility. The time-varying conditional correlation between Australian and US financial stock returns is explained in terms of economic fundamentals and international financial crises. The results suggest that conditional return correlation increases during financial crises. The conditional correlation increases during the contractionary periods of the US economic cycle. Further, the net capital flow between Australia and the US is found to have a positive influence on the conditional correlation. This thesis extends the literature through an in-depth analysis of the domestic and foreign interest rate risk exposure of Australian financial firms. This research is important for the managers of financial firms and investors in order to design interest rate risk management strategies to cope with domestic and foreign interest rate movements. The findings of this thesis are also relevant to regulators for assessing the vulnerability of the Australian financial sector to global financial shocks.
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Song, Xiaoyang. "Gender diversity on Australian company boards." Thesis, 2015. http://hdl.handle.net/1959.13/1296522.
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Research Doctorate - Doctor of Philosophy (PhD)The primary objective of this thesis is to provide empirical evidence of the contribution of female directors on corporate financial performance and company risk management practices in an Australian context. This thesis is based on three separate but implicitly related research studies. Study One provides a descriptive analysis of the gender compositions on Australian company boards and the changing female director representation during the years from 2001 to 2010. Study Two investigates the association between female director representation and corporate financial performance. Finally, Study Three examines the association between female directors and company risk management practices. The results of Study One provide general information on female director representation on Australian company boards and a detailed description of female directors from a general, industry, corporate and individual perspective. Both Study Two and Study Three provide strong statistical evidence of female directors’ contributions to the corporate financial performance and company risk management practices of Australian companies. Based on the results of the association between female directors and corporate financial performance, it is found that a gender diverse board can be associated with enhanced corporate financial performance and simultaneously, that companies with better market-based financial performance are more likely to have higher female director representation. In terms of the association between female directors and company risk management practices, it can be concluded that companies with higher female director representation are more likely to have better risk management practices. The thesis contributes to the research literature and theory in the area of female directors’ contributions in company decision-making processes. The findings of this thesis also provide empirical evidence and valuable insights for practice and policy. The findings are supportive of corporate governance proposals advocating greater gender diversity on company boards. Consequently the thesis is relevant to both company boards and corporate policy regulators as they shed further light on the benefits associated with increasing female director representation.
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Al-Shboul, Mohammad. "An investigation into the effects of the use of financial and operational hedges on Australian corporate foreign currency risk exposure." Thesis, 2008. https://researchonline.jcu.edu.au/2044/1/01front.pdf.
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The purpose of this thesis is to investigate the effects of the use of financial and operational hedging on foreign exchange rate exposure among Australian multinational corporations. Since the flotation of the Australian dollar at the end of 1983, Australian firms have become increasingly exposed to foreign exchange rate risk. To eliminate this risk, Australian firms have undertaken substantial corporate hedging programs, which are both financial and operational in nature. It is notable that there has been an increase in financial hedging techniques such as derivatives and foreign-currency denominated debt, and operational hedging such as diversifying and spreading subsidiaries across foreign countries. Despite the substantial involvement in corporate hedging strategies, there is a paucity of Australian research studies examining the relationship between the use of financial and operational hedging by firms and their levels of foreign exchange rate exposure.
A two-stage market model was used to investigate the main research problem using a sample of 62 Australian multinational corporations. The first-stage model - Jorion’s (1991) model – was adopted, to test the first hypothesis of whether there exists a relationship between stock returns and changes in exchange rates, by estimating the exposure coefficients to foreign currency risk during the period from January 2000 to December 2004.
Next, the second-stage model utilised cross-sectional regression models to examine the effects of the use of financial hedging, separately and/or in combination with, operational hedging on foreign exchange risk exposure. This second-stage model was estimated for the 2004 financial year data to test seven hypotheses. These seven hypotheses were related to whether the use of financial separately, or in combination with, operational hedging effectively reduced exposure.
Therefore, eight main research hypotheses were tested in the study.
Findings of the study were that there is only weak evidence to support the hypothesis that stock returns were sensitive to changes in value of the Australian dollar. It was found that the use of foreign currency derivatives was significantly related to exposure reduction. The use of foreign debt was also found to be significantly related to exposure reduction, indicating that foreign debt is used for hedging purposes.
Furthermore, the combined use of these two financial hedging strategies was found to be significantly associated with the exposure reduction. By the same token, these two financial hedging strategies were found to be substitutive to each other in reducing exposure. Operational hedging proxies were also significantly associated with the exposure reduction. This latter finding indicates that, for the purposes of hedging, firms diversify and disperse foreign operations and subsidiaries across countries and geographical regions. In addition, the combined use of financial and operational hedging was found to be negatively associated with exposure. Finally, the use of financial hedging was found to complement operational hedging in reducing exposure.
The models used in this study could be applied to further research into the relationship between the use of financial and operational hedging and exposure. This could be achieved by using different time spans, different markets (countries) data, and larger samples, together with other measures. As Australian firms are greatly exposed to foreign exchange rate risk and consequently are heavily involved with financial and operational hedging activities, the results of this study could be beneficial to corporate managers, individual and corporate investors, researchers, derivatives designers and regulators.
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Bergami, Roberto. "Risk management in Australian manufacturing exports : the case of letters of credit to ASEAN." Thesis, 2011. https://vuir.vu.edu.au/16043/.
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One of the fundamental considerations for exporters in international trade transactions is the aspect of payment. In the context of financial risk management, Letters of Credit enable the exporter to substitute the credit risk of the buyer with that of his bank. The Letter of Credit is a conditional payment guarantee, relying on one hundred per cent documentary accuracy to trigger the payment. Less than one hundred per cent compliance means the loss of the payment guarantee. Non-compliance is a significant problem as, according to the International Chamber of Commerce, worldwide documentary discrepancy rates against Letter of Credit transactions have been estimated to be between sixty to seventy per cent. The mechanics of Letter of Credit
transactions comprise a complex web of interactions between banks, traders and their service providers, providing a fertile ground for discrepancies and existing literature
acknowledges this world-wide problem. In the UK, in 2000, losses were estimated to be AUD 305 million (£ 113) through non-compliant documents being presented under Letters of Credit – this amount did not include lost opportunities and cash flow problems. In the same year, a separate USA study of Letter of Credit transactions confirmed the high discrepancy rate, but also claimed that as long as buyers want the goods discrepancies did not translate into financial losses. The findings were refuted by others.
It is the potential loss of revenue caused by the mismanagement of risk that is foremost in this research. It is estimated that the annual value of Letter of Credit
business for manufacturing exports to ASEAN is approximately AUD 3.5 billion, with losses estimated to be upwards of AUD 920 million. This research aims to assist in
greater understanding of the usage of Letters of Credit and the dynamics that underpin these transactions leading to a greater understanding of the interactions between
Australian exporters and ASEAN importers.
Books on the topic "Financial risk – Australia"
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Mercereau, Benoît. Financial integration in Asia: Estimating the risk-sharing gains for Australia and other nations. [Washington, D.C.]: International Monetary Fund, Asian and Pacific Dept., 2006.
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Au-Yeung, Wilson. Australian government balance sheet management. Cambridge, Mass: National Bureau of Economic Research, 2006.
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3
Bricknell, Samantha. Money laundering and terrorism financing risks to Australian non-profit organisations. Canberra: Australian Institute of Criminology, 2011.
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Financial Institutions Management. McGraw-Hill Education / Australia, 2015.
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International Monetary Fund. Monetary and Capital Markets Department. Australia: Financial Sector Assessment Program-Technical Note-Systemic Risk Oversight and Macroprudential Policy. International Monetary Fund, 2019.
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International Monetary Fund. Monetary and Capital Markets Department. Australia: Financial Sector Assessment Program-Technical Note-Systemic Risk Oversight and Macroprudential Policy. International Monetary Fund, 2019.
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Mercereau, Benot. Financial Integration in Asia: Estimating the Risk-Sharing Gains for Australia and Other Nations. International Monetary Fund, 2006.
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Mercereau, Benot. Financial Integration in Asia: Estimating the Risk-Sharing Gains for Australia and Other Nations. International Monetary Fund, 2006.
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Mercereau, Benot. Financial Integration in Asia: Estimating the Risk-Sharing Gains for Australia and Other Nations. International Monetary Fund, 2006.
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Ian, Paterson. 3 Australia. Oxford University Press, 2018. http://dx.doi.org/10.1093/law/9780198808589.003.0003.
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This chapter discusses the law of set-off and netting in Australia as well as the key restrictions on the availability of set-off under Australian law. In Australia, set-off and netting arrangements are often used as a means of reducing operational and credit risk. In the context of reducing credit risk involving financial rights and obligations (for example, deposits and loans), set-off and netting arrangements depend on one or more of: contract, section 553C of the Corporations Act 2001, and the Payment Systems and Netting Act 1998 (Netting Act). The chapter first considers set-off between solvent parties and set-off against insolvent parties before explaining set-off under section 553C of the Corporations Act. It also examines issues that may arise in cross-border transactions under Australian law with respect to the availability of set-off in section D of the Corporations Act, with emphasis on the choice of law and set-off in insolvency.
Book chapters on the topic "Financial risk – Australia"
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de Zwart, Francesco. "The BEAR – Bank Executive Accountability Regime – And APRA’S Non-Financial Risk Accountabilities." In The Key Code and Advanced Handbook for the Governance and Supervision of Banks in Australia, 687–712. Singapore: Springer Singapore, 2021. http://dx.doi.org/10.1007/978-981-16-1710-2_20.
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Lynch, Gordon. "‘The Risk Involved is Inappreciable… and the Gain Exceptional’: Child Migration to Australia and Empire Settlement Policy, 1913–1939." In UK Child Migration to Australia, 1945-1970, 23–53. Cham: Springer International Publishing, 2021. http://dx.doi.org/10.1007/978-3-030-69728-0_2.
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AbstractThis chapter examines the development of UK child migration to Australia in the inter-war period. Following the opening of Kingsley Fairbridge’s experimental farm school for child migrants at Pinjarra in 1913, the 1920s and 1930s saw a gradual increase in the number of voluntary societies involved in this work and of residential institutions in Australia receiving child migrants. The growth of these programmes in the wider context of the UK Government’s assisted migration policies is discussed. During the 1930s, the global financial depression weakened governmental support for assisted migration, and greater caution emerged within the UK Government about the value of some planned migration schemes. Nevertheless, by 1939, child migration to Australia was seen by UK policy-makers as a small but important part of the attempt to strengthen ties with Britain’s Dominions and to make more efficient use of their collective human and material resources.
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de Zwart, Francesco. "Introduction to Failings of Risk Management in the Global Financial Crisis and Beyond to the Australian Banking Royal Commission Enquiry into Banking Misconduct." In The Key Code and Advanced Handbook for the Governance and Supervision of Banks in Australia, 1023–44. Singapore: Springer Singapore, 2021. http://dx.doi.org/10.1007/978-981-16-1710-2_38.
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Tomasic, Roman. "Corporate Crime and Corporate Culture in Financial Institutions: An Australian Perspective." In White Collar Crime and Risk, 283–315. London: Palgrave Macmillan UK, 2017. http://dx.doi.org/10.1057/978-1-137-47384-4_11.
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Breslin, John, Les Clewlow, and Chris Strickland. "A Multi-factor Structural Model for Australian Electricity Market Risk." In Nonlinear Economic Dynamics and Financial Modelling, 335–54. Cham: Springer International Publishing, 2014. http://dx.doi.org/10.1007/978-3-319-07470-2_19.
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Allen, David E., and Lurion Demello. "The Consumption-Based Capital Asset-Pricing Model (CCAPM), Habit-Based Consumption and the Equity Premium in an Australian Context." In Financial Econometrics Modeling: Market Microstructure, Factor Models and Financial Risk Measures, 135–53. London: Palgrave Macmillan UK, 2011. http://dx.doi.org/10.1057/9780230298101_5.
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Broadway, Barbara, and Guyonne Kalb. "Labour Market Participation: Family and Work Challenges across the Life Course." In Family Dynamics over the Life Course, 177–200. Cham: Springer International Publishing, 2022. http://dx.doi.org/10.1007/978-3-031-12224-8_9.
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AbstractHaving a job is an important indicator of economic and social wellbeing, and two-earner families are becoming the norm rather than the exception. As a result, many more women, including mothers, are in the labour force now than ever before. Balancing family and work responsibilities therefore becomes ever more important, not just for women but also men who are sharing the caring load with their partners, especially when young pre-school children are present. However, employment is not equally distributed across families, and some families have noone in a job which leads to financial vulnerability. Even one-earner families that depend on a low-skilled, low-wage earner may struggle to get by and provide their children with the opportunities to succeed in life and achieve mental, physical and financial wellbeing. This may lead to the intergenerational transmission of disadvantage and poor outcomes from parents to children. Gender inequality and ongoing inequalities relating to gender divisions in work and family may lead to women being particularly vulnerable in terms of earnings capacity and retirement savings when a relationship ends. One-parent families are specifically at risk as they often have no partner with whom to share the care-taking role, making work-family balance difficult to achieve. In this chapter we review the Australian evidence on these issues and provide policy implications.
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Jeannie Marie, Paterson, and Paterson Ian. "Part IV Common Law Legal Systems, 15 Australia." In Liability of Financial Supervisors and Resolution Authorities. Oxford University Press, 2022. http://dx.doi.org/10.1093/law/9780198868934.003.0015.
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Australia has been spared recent collapses of significant financial institutions. The powers of Australian regulators to resolve a failing institution have not been tested in the courts. The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission are given broad immunities from suit by potential claimants, except in respect of conduct not in good faith. It is likely that this would allow claims for intentional torts, such as the tort of misfeasance in public office. Cases where the elements of that tort could be made out by an affected institution, depositor, or other counterparty to that institution should be rare. In addition, the Commonwealth Constitution provides some protection against regulatory action that might be characterized as an acquisition of property that is not on just terms. An action by APRA that had this character could give rise to a statutory ground for compensation against the Commonwealth.
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Ghoorah, Ushi. "Accountability via Financial Disclosures." In Modernization and Accountability in the Social Economy Sector, 21–42. IGI Global, 2019. http://dx.doi.org/10.4018/978-1-5225-8482-7.ch002.
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Social economy sector (SES) organizations are dependent on their funders and, similar to non-profit organizations, are vulnerable to the risk of mission drift as well as to concerns about the extent to which they are accountable for their fund flows. This chapter explores the general public's perceptions of the relative importance of specific financial disclosures which the public believes SES organizations should publish as part of their provision of accountability. Using a survey questionnaire administered to a sample of 400 Australian individuals, the chapter observes that the public perceives financial disclosures relating to sources of funds, mission-related expenses, and the financial sustainability of SES organizations as important. It is recommended that SES organizations cater to the general public's information needs as a way of improving their accountability, reducing information asymmetry, and eventually increasing general trust and confidence in their operations.
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Sakri, Sapiah, Jaizah Othman, and Noreha Halid. "Hybridisation of Feature Selection and Classification Techniques in Credit Risk Assessment Modelling." In Knowledge Innovation Through Intelligent Software Methodologies, Tools and Techniques. IOS Press, 2020. http://dx.doi.org/10.3233/faia200581.
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In recent years, the use of artificial intelligence techniques to manage credit risk has represented an improvement over conventional methods. Furthermore, small improvements to credit scoring systems and default forecasting can support huge profits. Accordingly, banks and financial institutions have a high interest in any changes. The literature shows that the use of feature selection techniques can reduce the dimensionality problems in most credit risk datasets, and, thus, improve the performance of the credit risk model. Many other works also indicated that various classification approaches would also affect the performance of the credit risk assessment modelling. In this research, based on the new proposed framework, we investigated the effect of various filter-based feature selection techniques with various classification approaches, namely, single and ensemble classifiers, on three credit datasets (German, Australian, and Japanese credit risk datasets) with the aim of improving the performance of the credit risk model. All single and ensemble classifier-based models were evaluated using four of the most used performance metrics for assessing financial stress models. From the comparison analysis between, with, and without applying the feature selection and across the three credit datasets, the Random-Forest + Information-Gain model achieved a better trade-off in improving the model’s accuracy rate with the value of 96% for the Australian credit dataset. This model also obtained the lowest Type I error with the value of 4% for the German credit dataset, the lowest Type II error with the value of 2% for the German credit dataset and the highest value of G-mean of 95% for the Australian credit dataset. The results clearly indicate that the Random-Forest + Information-Gain model is an excellent predictor for the credit risk cases.
Conference papers on the topic "Financial risk – Australia"
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Kyng, Timothy, Ling Li, and Ayse Bilgin. "Risk, uncertainty & decisions about australian retirement village residency for seniors." In Decision Making Based on Data. International Association for Statistical Education, 2019. http://dx.doi.org/10.52041/srap.19305.
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“Retirement Villages” (RVs) are a common form of housing for older people in Australia. RV contracts are very complex. RV residency terminates on death or ill health. At Macquarie we developed a free online RV financial calculator. This is designed to help consumers with understanding the contracts, comparison shopping, and avoiding costly mistakes. It takes account of longevity / health and financial risks. It converts the complex fee structure to a comparison rent payable monthly over the consumers expected healthy lifespan. RVs are much costlier than most consumers expect. The cost varies by gender and increases with age. This tool uses actuarial modelling utilising publicly available data on mortality and disability. The contracts have much in common with insurance policies. This is the first RV calculator available in Australia. The underlying actuarial model is very original and the calculator can handle the vast majority of contract designs.
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McDermott, Vanessa, and Jan Hayes. "‘We’re Still Hitting Things’: The Effectiveness of Third Party Processes for Pipeline Strike Prevention." In 2016 11th International Pipeline Conference. American Society of Mechanical Engineers, 2016. http://dx.doi.org/10.1115/ipc2016-64070.
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High-pressure gas pipelines are vulnerable to damage in the course of building or maintaining other infrastructure, such as roads, water pipelines, electricity or telecommunications cabling. Unlike other countries, there has never been a death or serious injury from a high-pressure gas pipeline strike in Australia and yet external interference continues to be the most common cause of pipeline damage despite a range of technical and legislative measures in place. This research project aims to enhance the safety strategies regarding third party pipeline strikes by giving the pipeline sector a greater understanding of the motivations and priorities of those who work around pipeline assets and so how to work with them to achieve better outcomes. Using data gathered from more than 70 in-depth interviews, we explore empirically alternate understandings of risk amongst a range of stakeholders and individuals that are responsible in some way for work near or around high-pressure gas transmission pipelines in Australia. Outside the pipeline sector, much of the work around pipelines is conducted by those at the bottom of long chains of contractors and sub-contractors. We discuss perceptions of risk held by a range of third party actors whose activities have the potential to threaten gas pipeline integrity. We compare these views with gas pipeline industry perceptions of risk, couched in terms of asset management, public safety, legal and insurance obligations, and reputation management. This paper focuses on how financial risk and so also management of the potential for pipeline strikes is shifted down the third party contractor chain. Added to this, incentives for timely project completion can unintentionally lead to situations where the potential for third party contractors to strike pipelines increases. The data shows that third party contractors feel the time and cost impact of design or project changes most immediately. Consequently, strikes or near misses may result as sub-contractors seek to avoid perceived ‘unnecessary’ time delays along with the associated financial impact. We argue that efforts to reduce the potential for pipeline strike need to be targeted at structural changes, rather than simply aimed at worker risk perception and enforcement of safety compliance strategies.
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Hayes, Jan, Lynne Chester, and Dolruedee Kramnaimuang King. "Is Public Safety Impacted by the Multiple Regulatory Regimes for Gas Pipelines and Networks?" In 2018 12th International Pipeline Conference. American Society of Mechanical Engineers, 2018. http://dx.doi.org/10.1115/ipc2018-78160.
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Gas pipelines and networks are subject to multiple regulatory governance arrangements. One regime is economic regulation which is designed to ensure fair access to gas markets and emulate the price pressures of competition in a sector dominated by a few companies. Another regime is technical regulation which is designed to ensure pipeline system integrity is sufficient for the purposes of public safety, environmental protection and physical security of supply. As was highlighted in analysis of the San Bruno pipeline failure, these two regulatory regimes have substantially different orientations towards expenditure on things such as maintenance and inspection which ultimately impact public safety. Drawing on more than 50 interviews, document review and case studies of specific price determinations, we have investigated the extent to which these two regulatory regimes as enacted in Australia may conflict, and particularly whether economic regulation influences long-term public safety outcomes. We also draw on a comparison with how similar regulatory requirements are enacted in the United Kingdom (UK). Analysis shows that the overall orientation towards risk varies between the two regimes. The technical regulatory regime is a typical goal-setting style of risk governance with an overarching requirement that ‘reasonably practicable’ measures are put in place to minimize risk to the public. In contrast, the incentive-based economic regulatory regime requires that expenditure should be ‘efficient’ to warrant inclusion in the determination of acceptable charges to customers. How safety is considered within this remains an open question. Best practice in performance-based safety regimes such as those used in the UK and Australia require that regulators adopt an attitude towards companies based on the principle of ‘trust but verify’ as, generally speaking, all parties aim for the common goal of no accidents. Equally, in jurisdictions that favor prescriptive safety requirements such as the United States (US) the common goal remains. In contrast, stakeholders in the economic regulatory regime have significantly diverse interests; companies seek to maximize their individual financial returns and regulators seek to exert downward price pressures. We argue that these differences in the two regulatory regimes are significant for the management of public safety risk and conclude that minimizing risk to the public from a major pipeline failure would be better served by the economic regulatory regime’s separate consideration of safety-related from other expenditure and informed by the technical regulator’s view of safety.
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Zhao, Luyang. "Risks Faced by Bank of Australia and How to Deal with It." In 5th International Conference on Financial Innovation and Economic Development (ICFIED 2020). Paris, France: Atlantis Press, 2020. http://dx.doi.org/10.2991/aebmr.k.200306.060.
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Viney, Christopher. "Informing IT Managers - Why the Bank for International Settlements is Establishing a Capital Charge Guideline for Operational Risk: the Australian Evidence." In 2002 Informing Science + IT Education Conference. Informing Science Institute, 2002. http://dx.doi.org/10.28945/2585.
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IT managers within financial institutions must understand and be able to respond to the operational, financial and regulatory impacts that will result from a loss of critical business functions. The Basel Committee on Banking Supervision, through the Bank for International Settlements (BIS) has circulated a consultative paper which, if eventually adopted by nation-state bank supervisors, will impose an operational risk capital charge on banks as part of the new Capital Accord. Banks will also be required to record and report operational risk occurrences or events. This paper presents data on aspects of the disaster risk management practices of banks operating within the Australian financial system. The data indicate that banks, as a group, do not maintain effective disaster risk management practices and are not adequately prepared to recover a loss of critical business functions. The results clearly support the necessity of the BIS initiatives.
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Kyng, Timothy, Ling Li, and Ayse Bilgin. "Financial and statistical literacy for retirement housing decisions in Australia." In Teaching Statistics in a Data Rich World. International Association for Statistical Education, 2017. http://dx.doi.org/10.52041/srap.17302.
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Many older people in Australia sell their family home to fund a long term residential arrangement with a “retirement village”. The contracts are complex. Consumers usually lack the capacity to compare various retirement village contracts with each other or with other arrangements. We have designed a methodology for comparing such contracts via a comparison rent and other metrics. We are working towards developing a free online publicly available calculator and relevant educational material to facilitate informed decision making by consumers. Our proposed calculator will utilise publicly available data on mortality and disability to model survival of resident status. It will compute various metrics that measure the costs, benefits and risks of these contracts. These metrics vary with age, gender, and health characteristics. These freely (soon) available resources are intended to educate both consumers and their advisors / families in statistical, health, and financial literacy when they need to make an important decision towards the end of their lives.
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Neff, Rob, and Matthew Driscoll. "10 Years Later: A Technical and Financial Review of the United States Navy’s High Pressure Turbine Blade Refurbishment Program." In ASME Turbo Expo 2010: Power for Land, Sea, and Air. ASMEDC, 2010. http://dx.doi.org/10.1115/gt2010-22811.
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In 1999, the United States Navy implemented an LM2500 High Pressure Turbine Blade Refurbishment Program. Traditionally, the US Navy had replaced high pressure turbine components each time an engine was removed from a ship during its depot overhaul visit. Following successful testing of several Rainbow rotors built up with refurbished LM2500 blades, as well as experience gained by the Royal Australian Navy, refurbishment of stage 1 and 2 high pressure turbine blades was adopted vice the replace with new part strategy previously utilized. This paper takes a fresh look at the blade refurbishment effort from two perspectives, first, an updated technical assessment is made of Rainbow rotor components as well as parts which were implemented as part of the refurbishment program to evaluate their current (2009) condition and define service life expectations. Secondly, a financial assessment is made of the program itself, defining the cost avoidance of refurbishing customer owned blades versus the cost to procure new components. The financial analysis will also include commentary on risk mitigation based upon the hundreds of thousands of operating hours on these components have acquired while deployed at sea.
Reports on the topic "Financial risk – Australia"
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Cavaille, Charlotte, Federica Liberini, Michela Redoano, Anandi Mani, Vera E. Troeger, Helen Miller, Ioana Marinescu, et al. Which Way Now? Economic Policy after a Decade of Upheaval: A CAGE Policy Report. Edited by Vera E. Troeger. The Social Market Foundation, February 2019. http://dx.doi.org/10.31273/978-1-910683-41-5.
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Most, if not all advanced economies have suffered gravely from the 2008 global financial crisis. Growth, productivity, real income and consumption have plunged and inequality, and in some cases poverty, spiked. Some countries, like Germany and Australia, were better able to cope with the consequences but austerity has taken its toll even on the strongest economies. The UK is no exception and the more recent period of economic recovery might be halted or even reversed by the political, economic, and policy uncertainty created by the Brexit referendum. This uncertainty related risk to growth could be even greater if the UK leaves the economic and legal framework provided by the EU. This CAGE policy report offers proposals from different perspectives to answer the overarching question: What is the role of a government in a modern economy after the global financial crisis and the Brexit vote? We report on economic and social challenges in the UK and discuss potential policy responses for the government to consider. Foreword by: Lord O’Donnell of Clapham.
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Kahima, Samuel, Solomon Rukundo, and Victor Phillip Makmot. Tax Certainty? The Private Rulings Regime in Uganda in Comparative Perspective. Institute of Development Studies, January 2021. http://dx.doi.org/10.19088/ictd.2021.001.
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Taxpayers sometimes engage in complex transactions with uncertain tax treatment, such as mergers, acquisitions, demergers and spin-offs. With the rise of global value chains and proliferation of multinational corporations, these transactions increasingly involve transnational financial arrangements and cross-border dealings, making tax treatment even more uncertain. If improperly structured, such transactions could have costly tax consequences. One approach to dealing with this uncertainty is to create a private rulings regime, whereby a taxpayer applies for a private ruling by submitting a statement detailing the transaction (proposed or completed) to the tax authority. The tax authority interprets and applies the tax laws to the requesting taxpayer’s specific set of facts in a written private ruling. The private ruling offers taxpayers certainty as to how the tax authority views the transaction, and the tax treatment the taxpayer can expect based on the specific facts presented. Private rulings are a common feature of many tax systems around the world, and their main goal is to promote tax certainty and increase investor confidence in the tax system. This is especially important in a developing country like Uganda, whose tax laws are often amended and may not anticipate emerging transnational tax issues. Private rulings in Uganda may be applied for in writing prior to or after engaging in the transaction. The Tax Procedures Code Act (TPCA), which provides for private rulings, requires applicants to make a full and true disclosure of the transaction before a private ruling may be issued. This paper evaluates the Ugandan private rulings regime, offering a comparative perspective by highlighting similarities and contrasts between the Ugandan regime and that of other jurisdictions, including the United States, Australia, South Africa and Kenya. The Ugandan private rulings regime has a number of strengths. It is not just an administrative measure as in some jurisdictions, but is based on statute. Rulings are issued from a central office – instead of different district offices, which may result in conflicting rulings. Rather than an elaborate appeals process, the private ruling is only binding on the URA and not on the taxpayer, so a dissatisfied taxpayer can simply ignore the ruling. The URA team that handles private rulings has diverse professional backgrounds, which allows for a better understanding of applications. There are, however, a number of limitations of the Ugandan private rulings system. The procedure of revocation of a private ruling is uncertain. Private rulings are not published, which makes them a form of ‘secret law’. There is no fee for private rulings, which contributes to a delay in the process of issuing one. There is understaffing in the unit that handles private rulings. Finally, there remains a very high risk of bias against the taxpayer because the unit is answerable to a Commissioner whose chief mandate is collection of revenue. A reform of the private rulings regime is therefore necessary, and this would include clarifying the circumstances under which revocation may occur, introducing an application fee, increasing the staffing of the unit responsible, and placing the unit under a Commissioner who does not have a collection mandate. While the private rulings regime in Uganda has shortcomings, it remains an essential tool in supporting investor confidence in the tax regime.
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McKenna, Patrick, and Mark Evans. Emergency Relief and complex service delivery: Towards better outcomes. Queensland University of Technology, June 2021. http://dx.doi.org/10.5204/rep.eprints.211133.
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Emergency Relief (ER) is a Department of Social Services (DSS) funded program, delivered by 197 community organisations (ER Providers) across Australia, to assist people facing a financial crisis with financial/material aid and referrals to other support programs. ER has been playing this important role in Australian communities since 1979. Without ER, more people living in Australia who experience a financial crisis might face further harm such as crippling debt or homelessness. The Emergency Relief National Coordination Group (NCG) was established in April 2020 at the start of the COVID-19 pandemic to advise the Minister for Families and Social Services on the implementation of ER. To inform its advice to the Minister, the NCG partnered with the Institute for Governance at the University of Canberra to conduct research to understand the issues and challenges faced by ER Providers and Service Users in local contexts across Australia. The research involved a desktop review of the existing literature on ER service provision, a large survey which all Commonwealth ER Providers were invited to participate in (and 122 responses were received), interviews with a purposive sample of 18 ER Providers, and the development of a program logic and theory of change for the Commonwealth ER program to assess progress. The surveys and interviews focussed on ER Provider perceptions of the strengths, weaknesses, future challenges, and areas of improvement for current ER provision. The trend of increasing case complexity, the effectiveness of ER service delivery models in achieving outcomes for Service Users, and the significance of volunteering in the sector were investigated. Separately, an evaluation of the performance of the NCG was conducted and a summary of the evaluation is provided as an appendix to this report. Several themes emerged from the review of the existing literature such as service delivery shortcomings in dealing with case complexity, the effectiveness of case management, and repeat requests for service. Interviews with ER workers and Service Users found that an uplift in workforce capability was required to deal with increasing case complexity, leading to recommendations for more training and service standards. Several service evaluations found that ER delivered with case management led to high Service User satisfaction, played an integral role in transforming the lives of people with complex needs, and lowered repeat requests for service. A large longitudinal quantitative study revealed that more time spent with participants substantially decreased the number of repeat requests for service; and, given that repeat requests for service can be an indicator of entrenched poverty, not accessing further services is likely to suggest improvement. The interviews identified the main strengths of ER to be the rapid response and flexible use of funds to stabilise crisis situations and connect people to other supports through strong local networks. Service Users trusted the system because of these strengths, and ER was often an access point to holistic support. There were three main weaknesses identified. First, funding contracts were too short and did not cover the full costs of the program—in particular, case management for complex cases. Second, many Service Users were dependent on ER which was inconsistent with the definition and intent of the program. Third, there was inconsistency in the level of service received by Service Users in different geographic locations. These weaknesses can be improved upon with a joined-up approach featuring co-design and collaborative governance, leading to the successful commissioning of social services. The survey confirmed that volunteers were significant for ER, making up 92% of all workers and 51% of all hours worked in respondent ER programs. Of the 122 respondents, volunteers amounted to 554 full-time equivalents, a contribution valued at $39.4 million. In total there were 8,316 volunteers working in the 122 respondent ER programs. The sector can support and upskill these volunteers (and employees in addition) by developing scalable training solutions such as online training modules, updating ER service standards, and engaging in collaborative learning arrangements where large and small ER Providers share resources. More engagement with peak bodies such as Volunteering Australia might also assist the sector to improve the focus on volunteer engagement. Integrated services achieve better outcomes for complex ER cases—97% of survey respondents either agreed or strongly agreed this was the case. The research identified the dimensions of service integration most relevant to ER Providers to be case management, referrals, the breadth of services offered internally, co-location with interrelated service providers, an established network of support, workforce capability, and Service User engagement. Providers can individually focus on increasing the level of service integration for their ER program to improve their ability to deal with complex cases, which are clearly on the rise. At the system level, a more joined-up approach can also improve service integration across Australia. The key dimensions of this finding are discussed next in more detail. Case management is key for achieving Service User outcomes for complex cases—89% of survey respondents either agreed or strongly agreed this was the case. Interviewees most frequently said they would provide more case management if they could change their service model. Case management allows for more time spent with the Service User, follow up with referral partners, and a higher level of expertise in service delivery to support complex cases. Of course, it is a costly model and not currently funded for all Service Users through ER. Where case management is not available as part of ER, it might be available through a related service that is part of a network of support. Where possible, ER Providers should facilitate access to case management for Service Users who would benefit. At a system level, ER models with a greater component of case management could be implemented as test cases. Referral systems are also key for achieving Service User outcomes, which is reflected in the ER Program Logic presented on page 31. The survey and interview data show that referrals within an integrated service (internal) or in a service hub (co-located) are most effective. Where this is not possible, warm referrals within a trusted network of support are more effective than cold referrals leading to higher take-up and beneficial Service User outcomes. However, cold referrals are most common, pointing to a weakness in ER referral systems. This is because ER Providers do not operate or co-locate with interrelated services in many cases, nor do they have the case management capacity to provide warm referrals in many other cases. For mental illness support, which interviewees identified as one of the most difficult issues to deal with, ER Providers offer an integrated service only 23% of the time, warm referrals 34% of the time, and cold referrals 43% of the time. A focus on referral systems at the individual ER Provider level, and system level through a joined-up approach, might lead to better outcomes for Service Users. The program logic and theory of change for ER have been documented with input from the research findings and included in Section 4.3 on page 31. These show that ER helps people facing a financial crisis to meet their immediate needs, avoid further harm, and access a path to recovery. The research demonstrates that ER is fundamental to supporting vulnerable people in Australia and should therefore continue to be funded by government.
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Rukundo, Solomon. Tax Amnesties in Africa: An Analysis of the Voluntary Disclosure Programme in Uganda. Institute of Development Studies (IDS), December 2020. http://dx.doi.org/10.19088/ictd.2020.005.
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Tax amnesties have taken centre stage as a compliance tool in recent years. The OECD estimates that since 2009 tax amnesties in 40 jurisdictions have resulted in the collection of an additional €102 billion in tax revenue. A number of African countries have introduced tax amnesties in the last decade, including Nigeria, Namibia, South Africa and Tanzania. Despite their global popularity, the efficacy of tax amnesties as a tax compliance tool remains in doubt. The revenue is often below expectations, and it probably could have been raised through effective use of regular enforcement measures. It is also argued that tax amnesties might incentivise non-compliance – taxpayers may engage in non-compliance in the hope of benefiting from an amnesty. This paper examines the administration of tax amnesties in various jurisdictions around the world, including the United States, Australia, Canada, Kenya and South Africa. The paper makes a cost-benefit analysis of these and other tax amnesties – and from this analysis develops a model tax amnesty, whose features maximise the benefits of a tax amnesty while minimising the potential costs. The model tax amnesty: (1) is permanent, (2) is available only to taxpayers who make a voluntary disclosure, (3) relieves taxpayers of penalties, interest and the risk of prosecution, but treats intentional and unintentional non-compliance differently, (4) has clear reporting requirements for taxpayers, and (5) is communicated clearly to attract non-compliant taxpayers without appearing unfair to the compliant ones. The paper then focuses on the Ugandan tax amnesty introduced in July 2019 – a Voluntary Disclosure Programme (VDP). As at 7 November 2020, this initiative had raised USh16.8 billion (US$6.2 million) against a projection of USh45 billion (US$16.6 million). The paper examines the legal regime and administration of this VDP, scoring it against the model tax amnesty. It notes that, while the Ugandan VDP partially matches up to the model tax amnesty, because it is permanent, restricted to taxpayers who make voluntary disclosure and relieves penalties and interest only, it still falls short due to a number of limitations. These include: (1) communication of the administration of the VDP through a public notice, instead of a practice note that is binding on the tax authority; (2) uncertainty regarding situations where a VDP application is made while the tax authority has been doing a secret investigation into the taxpayer’s affairs; (3) the absence of differentiated treatment between taxpayers involved in intentional non-compliance, and those whose non-compliance may be unintentional; (4) lack of clarity on how the VDP protects the taxpayer when non-compliance involves the breach of other non-tax statutes, such as those governing financial regulation; (5)absence of clear timelines in the administration of the VDP, which creates uncertainty;(6)failure to cater for voluntary disclosures with minor errors; (7) lack of clarity on VDP applications that result in a refund position for the applicant; and (8) lack of clarity on how often a VDP application can be made. The paper offers recommendations on how the Ugandan VDP can be aligned to match the model tax amnesty, in order to gain the most from this compliance tool.