The Relationship Between Company Size and Effective Tax Rates: A Test of political success - Evidence from Australian Companies
This study investigates whether large Australian companies use their political power to lower their effective tax rates (ETRs) over and above their political costs. It also tests whether there is an industry effect on ETRs for the mining and financial industries in Australia. This study expands the current research into the effect of political power on ETRs by incorporating other tax rate theories. Using 402 mature Australian public companies over a 13-year period the study applies three separate tests to profitable companies.
Firstly, we employ panel data analysis to examine changes in the ETR of 55 profitable companies over the 2000-2012 periods. Secondly, we use cross-sectional analysis to ascertain the relationship that the effect can be seen over a long period by using panel data testing methodology between company size and ETR for profitable companies on a year-by-year basis. Finally, we assess various tax-rate theories by examining the ETR paid by the profitable public companies in 2012.
Out findings from this study provide evidence that there is a consistent negative relationship between company size and ETRs. We suggest, that further research incorporating the use of qualitative data would be needed to counter the effect of political costs on individual companies and industries.
The Empirical Analysis of Council Size, Council Performance and Council Amalgamation in Australian Local Government
Financial viability remains a matter of acute concern for Australian local government. Efforts to improve local government sustainability in Australian local government have focussed principally on structural change - primarily through forced amalgamation – which is directed at generating savings by exploiting economies of scale. However, empirical evidence on the existence of substantial scale economies across the range of municipal functions is mixed and inconclusive. In general, in debates over structural reform in Australian local government, claims by proponents of amalgamation that significant economies of scale will inevitably emerge as a consequence of larger merged councils are typically not accompanied by econometric modelling or indeed any other empirical evidence. This thesis argues that much of the existing empirical literature relating to the optimal size of local government is plagued by methodological flaws. Accordingly, it cannot be used to justify compulsory consolidation programs based on increasing the population size of local government entities. This conclusion is reached after examining the implications of these flaws on the question of optimal size in Australian local government. Recent innovations in the empirical analysis of municipal size and performance are considered. Using these developments, it is argued that future structural reform programs must be assessed by employing a range of techniques that take account of regulatory priorities, citizen preferences and projected outcomes.
Who Benefits and How Much?: An Evaluation of Contract Farming Systems in Indonesia
This study evaluates the benefits to smallholders and agribusiness firms from participating in contracts in the eastern islands of Indonesia, specifically Bali and Lombok. These areas represent a range of farming systems and a diversity in social and institutional support structures. Bali is becoming increasingly dominated by tourism and construction industries, which have forced up labour costs and discouraged private investment in agricultural industries. Lombok is a more traditional rural area with lower labour costs and less opportunity for off-farm work. This has led to greater opportunity for agribusiness in Lombok to build partnerships with smallholders than has occurred in Bali. A total of 300 smallholders were surveyed in Bali, 150 of whom were at the time participating in the production of seed rice under contract to the semi-government firm PT Pertani. The remaining 150 were non-contract farmers who were selected due to their proximity to the contractors and their similar resource endowments. In Lombok there were 200 smallholders interviewed, 80 of whom had contacts with Nusantara Unggasjaya (NUJ) to grow out broilers. The remaining 120 did not have broiler chicken contracts.