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This article focuses on a hitherto underexplored but increasingly important area of public expenditure: act of grace payments. Act of grace payments are voluntary, highly discretionary gifts of money made by the executive in the absence of any legal duty to do so. The expenditure on such payments in Australia has been significant, and a lack of transparency creates serious risks to integrity. Further, the cases of Pape v Federal Commissioner of Taxation, Williams v Commonwealth and Williams v Commonwealth [No 2] have transformed the constitutional framework for public expenditure. Accordingly, this article conducts a fine-grained analysis of the constitutional legality of act of grace payments at the Commonwealth, state and territory levels. The authors argue that there are significant constitutional issues with act of grace payments at the Commonwealth level, and that many state-based act of grace payments are likely to be illegal. To address these issues, and to reduce the risk that payments will be made illegally, the authors recommend several legislative and soft law changes. [ABSTRACT FROM AUTHOR]

Purpose: The International Integrated Reporting Council (IIRC) has promulgated the production of integrated reports to enhance transparency and encourage improved stakeholder relationships. The purpose of this study/paper is to explore how managers prioritize the needs of stakeholders and to what extent integrated reporting is associated with those stakeholder relationships. Design/methodology/approach: The paper uses a case study/interpretative approach to compare the underlying motivation for the preparation of an integrated report across three case study sites from three different industry groups. Face-to-face and telephone semi-structured interviews, email correspondence and a review of the integrated reports form the basis for the data collection and analysis. Findings: The case studies investigated for this project provide evidence that integrated reporting did motivate further stakeholder engagement to increase the organizations' legitimacy and transparency. Overall, the authors found that the three case study organizations used the production of an integrated report to cement their place as a "leader" in their respective industry group. Moreover, managers regarded the current statutory accounts as inadequate in communicating and engaging with a broad range of stakeholders. There were elements of enhancing, defending and repairing legitimacy and managers tended to equate legitimacy with transparency. Research limitations/implications: Three case study sites were selected on the basis of producing exemplary integrated reports, and senior executives provided their views on stakeholder engagement. For the scope of this study, the stakeholders themselves were not involved in this investigation which can be viewed as a limitation. Practical implications: The international IIRC Framework is built upon the notion that stakeholders are integral to assisting the organization in creating value. The outcomes of this investigation suggest that for preparers, the incumbent organization is reliant on the leadership of senior managers (inclusive of the chief executive officer) and directors to actually instigate the process. In Australia and New Zealand, given that integrated reporting is not mandatory, regulators have no influence over the scope, content and veracity of integrated reports. It seems likely that further stakeholder engagement will become intrinsic to the business model of organizations as a means to quell any notion that it is engaging in greenwashing. Originality/value: The value of this paper is to contrast how three quite distinct organizations are using their integrated reports to communicate their approach to stakeholder engagement. Stakeholder salience dimensions are used to explore the importance attributed by senior managers. [ABSTRACT FROM AUTHOR]

The economic imbalances that characterize the world economy have unequally distributed costs and benefits. That raises the question of how countries could run long-term external surpluses and deficits without significant opposition against the policies that generate them. We show that political discourse helps to secure public support for these policies and the resulting economic outcomes. First, a content analysis of 32 000 newspaper articles finds that the dominant interpretations of current account balances in Australia and Germany concur with very distinct perspectives: external surpluses are seen as evidence of competitiveness in Germany, while external deficits are interpreted as evidence of attractiveness for investments in Australia. Second, survey experiments in both countries suggest that exposure to these diverging interpretations has a causal effect on citizens' support for their country's economic strategy. Political discourse, thus, is crucial to provide the societal foundation of national growth strategies. [ABSTRACT FROM AUTHOR]

The balance of payments in an open economy plays an important role in determining changes in the stock of domestic money. International reserve inflows, for example, will increase the domestic stock of money if they are added directly to the money balances of residents, or if they are exchanged for domestic currency at the central bank. In Australia, reserve flows are an important factor, and occasionally a dominant one, in determining changes in the domestic stock of money. This observation raises the question, what are the major determinants of Australian reserve flows and what role, if any, do policy actions play in affecting reserve flows? In this paper the latter, and simpler, approach is taken. Reserve flows are related to factors determining growth in demand for money, and to policy and other domestically determined factors that contribute to growth in the stock of money. This money-market approach to the balance of payments is a slightly modified version of a model developed by H. G. Johnson (1972). [ABSTRACT FROM AUTHOR]

ABSTRACT This article examines the impact of inward and outward aspects of internationalization. The effect of the inward process on outward moves has been the subject of limited research, although some evidence from studies of licensing and franchising in Australia suggests inward steps can sometimes play an important preparatory role in the outward process. Governments have for some time used inward international flows to force a reverse process--through strict countertrade policies, for example, or, as in the Australian case through its 'partnership scheme.' An important public policy question is how to regard international steps in any outward promotional scheme. For example, among individual firms there is a need to use inward moves in a more productive way to promote outward internationalization, perhaps by selecting foreign suppliers in part on the basis of their ability to contribute to an outward strategy. [ABSTRACT FROM AUTHOR]

This article applies an unrestricted two-regime threshold autoregressive (TAR) model with an autoregressive unit root to examine the sustainability of the balancing item of the balance of payments for Australia from the first quarter 1960 to the second quarter 2006. The main finding is that the balancing item of the balance of payments in Australia is characterised by a non-linear, but stationary, series meaning that the balancing item is sustainable. This result implies that short-run volatility in the balancing item has no effect on the reliability of reporting of the balancing item in the long-run. [ABSTRACT FROM AUTHOR]

The article explains current account deficits and the causes of external debt in Australia. The author defines current account deficits as the foreign-funded gap between an economy's national income and expenditure. He argues that it is misleading to regard current account deficit as a symptom of trade competitiveness problem. According to him, current account deficits and capital account surpluses are the best measure of the extent to which foreign investors express their confidence in the Australian economy.

This article presents a basic version of the inter temporal model and examines its ability to explain fluctuations in Australia's current account. The empirical results presented in this article suggest that the present value model is able to explain annual fluctuations in Australia's current account deficit since the beginning of the 1980s. This provides some support for the position that the current account deficit is appropriately viewed as the outcome of forward looking inter temporal saving and investment choices by Australians. The year-to-year fluctuations in the current account are the outcome of actions by Australians to smooth their consumption paths. The present value model in equation implies a simple relationship between the means of the current account and the change in national cash flow. Present value model tested in this article is derived from a quite restrictive inter temporal model. Although the ability of the current account to forecast changes in national cash flows is consistent with the present value model, it does not provide a full test of all of the restrictions imposed on the data by the model.

Recently, Fausten and Brooks offered (what they refer to as) an 'impressionistic view' of the temporal evolution of Australia's balancing item, which is a measure of the accuracy of the balance of payments accounts. They claim that the balancing item 'has been increasing in magnitude and volatility, violating with increasing frequency internationally agreed acceptability criteria for smallness'. In the present paper it is shown that Fausten and Brooks' results derive from data that incorporates excessively a dynamically asymmetric concentration of revisions and is therefore unsuitable for statistical analysis. This paper develops, and empirically evaluates, a model of the process of revisions of balance of payments data. This model illustrates that dynamically inconsistent time series of the balancing item, such as that employed by Fausten and Brooks, are bound to generate an artificial impression that it follows an 'explosive' time trend. Subsequently, it is illustrated that when alternative, dynamically consistent editions of the balancing item data for the same period as that examined by Fausten and Brooks are employed, their results are reversed. Indeed, the findings here contradict diametrically the conclusions of these authors by suggesting that the decline in the frequency of balancing item 'violations' observed in the latter portion of the relevant time period is unparalleled in the history of the balance of payments accounts. [ABSTRACT FROM AUTHOR]

The article presents a review of Australia's current account and debt during 1988-1989, and proposes an alternative approach which could provide justifications to it. Accordingly, it has already been a practice to put the guilt on macro intervention every time there exists a higher than normal deficit in current account balance. However, to the author, it must instead be allegedly known that the deficit is the sum of the public or fiscal deficit and the private deficit. Therefore, he claims that the practice of some firms which do bigger private investment over private saving is one reason behind the said deficit.

In what follows, I make no effort to add to, or even to faithfully represent, the recent debate on the theory of balance of payments—except to make the point that the alternative theories are not competitive, but focus on different aspects of trading relationships. The three analytical models to be discussed are: (1) the exportable/importable goods model; (2) the traded/non-traded goods model; and (3) the real balance/composite good model. The exportable/importable goods model is the key analytical device of most trade textbooks (see, for example, Caves and Jones, [5]). The traded/non-traded goods model is typically associated with the names of Swan [20], Salter [19] and Pearce [18]; and the real balance/composite good model, or "monetary" approach to balance of payments theory, can readily be expounded in terms of the Archibald/Lipsey analysis (written originally as a critique of Patinkin's classic volume), although until recently this was not explicit. Recent proponents of the monetary view are Harry Johnson [14], Rudiger Dornbusch [1975, 1976], Michael Mussa [16], Jacob Frenkel and Harry Johnson [10] and the particular application of the Archibald/Lipsey diagram may be found in Jonson and Kierzkowski [15] and Johnson [17]. The issues to be analysed in terms of these simple analytical structures are: (1) implications of the expansion of the mineral sector; (2) the shift from surplus to deficit in balance of payments, 1970-75; (3) joint implications of varying tariffs and exchange rates; and (4) increased variability of exchange rates. [ABSTRACT FROM AUTHOR]

The critical question, that is central to this paper, is how to determine the extent of the effective revaluation or devaluation arising from such multiple realignments. The extent of the changes in the price of the Australian dollar in terms of individual currencies is known, in some cases it has increased, in others it has decreased. The problem is how to weight these individual changes in order to determine the effective revaluation or devaluation, and the impact on the overall balance of payments. The problem is a universal one, not one confined to Australia. [ABSTRACT FROM AUTHOR]

Explores the issue of external solvency in the small open economy of Australia. Use of cointegration and multicointegration analysis; Fixed exchange-rate era export and imports; Effects of low saving and investment rates on the country's ability to sustain persistent external imbalances.

In this paper, the responses of 90-day Bank Accepted Bill futures prices to the unexpected components in the announcements of money supply, inflation rate and balance of payments are examined Expectations of these variables are generated using VAR and ARIMA models. The unexpected components were extracted by deducting the expected changes from the announced changes. The results show that the efficient market hypothesis cannot be rejected Summary In this paper, the responses of interest rate futures prices to the unexpected components in the announcement of money supply, inflation rate and balance of payments respectively are examined. Expectations on these economic variables are generated using BVAR, UVAR or ARIMA time-series econometric models. Empirical results are obtained by regressing the changes in futures price on the unexpected and the expected changes in the economic variables concerned with a constant term using ordinary least squares method. There are a few points worth mentioning here. First, futures prices did not respond to the expected changes in all the three economic variables announced. This complies to the EMH since all known information has already been incorporated into the price prior to the announcements. Any change in the price immediately after the announcement is due to the new information contained in the unexpected component of the announcement. Second, futures prices did not respond to the unexpected changes in all the three economic variables either. This seems to reject the hypothesis that interest rate futures market is efficient. However, after careful analysis, it is deemed that the EMH cannot be rejected based on the empirical results obtained from the price data which are at least a few hours after the announcements. It is also possible that the new information contained in the announcements is not an important determinant of the futures prices in Australia. The market may simply ignore this information unless it is of significant importance to the future course of the economy. Therefore, the EMH in this case cannot be rejected. [ABSTRACT FROM AUTHOR]

Examines the effect of fiscal restraint on the economy of Australia. Influence of Federal government on the account of the balance of payments; Comparison between macroeconomic models of Murphy model and McKibbin-Sachs Global Model; Assessment on the responses of the models on the shock.

Recent economic developments provide the backdrop against which Australia's economic prospects in 1984 are examined. Factors which will contribute to a mild recovery are identified. It is argued that the fiscal stimulus of the 1983 budget could, via the discretionary component, have been even larger without causing a serious monetary or balance of payments problem. This view partly rests on the maintenance of the prices and incomes Accord which, it is suggested, will need to be reinforced by changes to taxation scales in 1984. However, even if employment grows strongly, unemployment will remain at high levels in 1984. Judged by the conventional labour market indicators of employment and unemployment, in the early months of 1983 the Australian economy continued to slide into the worst recession since before World War I. [ABSTRACT FROM AUTHOR]

The objective of the paper is to analyze the importance of institutional changes in the financial system for the efficacy of monetary policy and in particular for the connection between the balance of payments (capital account) and monetary policy. Particular institutional developments studied include the emergence of certificates of deposit and the removal of interest rate ceilings in 1973. The result established, using a general equilibrium model, is that the degree to which transactions in the capital account of the balance of payments offset a domestic monetary expansion is greater in a regime of market-determined interest rates than in a regime of administered rates. [ABSTRACT FROM AUTHOR]

Examines the non-traded goods and balance of payments in Australia. Role of non-traded goods on the theory of exchange-rate adjustments; Terms of trade between export and import prices; Effects of import capital on prices.

Argues that fiscal activity has contributed to the current account deficit in Australia. Need for the implementation of restrictive macroeconomic policy measures to reduce the level of external debt; Instances where domestic firms have 'over-borrowed' offshore or cases where foreigners have unwisely invested their funds in Australia.

Presents the macroeconomic forecasts for the financial years 1989-90 and 1990-91 in Australia. Expenditure and income sides of the national accounts, the government accounts, the balance of payments and the computation of disposable income; Increase in real gross domestic product; Terms of trade; Rate of growth of employment and labor productivity.

Argues that Australia's savings behavior relative to its investment opportunities ensures a structural current account deficit (CAD) which is fundamentally sustainable. Saving, investment and current account deficit; Australia's saving and investment behavior; Signals to watch in assessing the short-run sustainability of the CAD.

Examines the relevance of the J-curve effect, a situation whereby a currency devaluation initially worsens the balance of payments before it improves it, to the current account deficit in Australia. Circumstances under which a J-curve effect may occur; Influence of cost-based export prices and forward contracts on the likelihood of a J-curve effect; Presentation of the balance of payments in a foreign currency.

This paper documents the response of exchange rates, interest rates and stock prices to monthly announcements of the Australian current account balance. Survey data on market participants' expectations and forecasts generated from ARIMA time series models are used to identify the unexpected component of the announcements. The study also controls for day-of-the-week effects that have been documented in the Australian equity market. The results support the efficient market hypothesis and show a significant depreciation of the Australian dollar in foreign exchange markets and a significant rise in both short- and long-term interest rates to announcements of larger than expected current account deficits. The study was, however, unable to find evidence of a significant stock price response to the current account announcements. [ABSTRACT FROM AUTHOR]

The balancing item in the Australian balance of payments has been increasing in magnitude and volatility, violating with increasing frequency internationally agreed acceptability criteria of smallness. This investigation examines the temporal evolution of the balancing item, identifying structural breaks that are plausible a priori. It also explores alternative data-driven and structural approaches to the diagnosis of the errors and omissions in the statistical record. [ABSTRACT FROM AUTHOR]

This paper presents and analyses data on recent trends in both voluntary and government-mandated countertrade in Australia. The analysis reveals that compensation is the most frequently used form of countertrade. The USSR and the ERG are the major nations involved. The primary category of Australian imports are capital goods. Inputs and capital goods are the major categories of Australian exports. Both Australian imports and exports are primarily finished products. Aerospace products. computer software systems, and hardware components are the major categories of civil offsets. The aerospace and weapons-related industries are the major categories of defence offsets. A familiarity with recent trends in Australian reciprocal trade will enable international marketing managers to identify and take advantage of emerging opportunities in the Australian marketplace. [ABSTRACT FROM AUTHOR]

Documents movements in the Trade Weighted Indexes (TWI) of Australia's nominal and real exchange rates. Volatility of the nominal exchange rate; Decomposition of TWI depreciations into components due to depreciations against the U.S. dollar and other currencies; Extent to which changes can be understood as necessary to correct misalignment in the Australian balance of payments.

Offers an outlook at the balance of payments in Australia from 1983 to 1985. International economy; Volume of non-rural exports; Exports and imports of goods and services; Value of imports; Capital inflow.

Provides an outlook for the monetary conditions of Australia for 1980. Factors contributing to the growth of the volume of money; Improvement in the balance of payments; Budget deficit; Sales of government securities; Reduction in the private foreign exchange transactions; Sources of liquidty; Trends of interest rates.

Focuses on the prospects for the economy of Australia for 1979 to 1980. Key features of macroeconomic developments; Key expenditure and output series; Sources of inflation; Reasons for the increase in unemployment rate; Components of consumer price index increase; Changes in real household income; Investment in export projects and balance of payments.

Presents news and developments relevant to rural economic conditions in Australia and overseas trade compiled as of June 1978. Farm production; Sheep and cattle numbers and meat production; Changes in farm income estimates between June and December 1977; Overview of rural exports; Merchandise exports and imports; Balance of payments; Implications for trade and economic policy.