Download OUTLINE

First ERSA Public Economics
Workshop
12 August 2009
OUTLINE
1.
EQUITY & EFFICIENCY ISSUES (e.g. Progressivity; Regressivity; Fiscal
Incidence)
2. TAX ISSUES (e.g. Simulations; Regional Integration)
3. EXPENDITURE ISSUES (e.g. Service Delivery; Infrastructure)
4. HUMAN CAPITAL ISSUES (e.g. Funding; Retention & Acquisition of Skills)
5. STRUCTURAL BUDGET BALANCE & FISCAL TARGETING (e.g. Potential
GDP; Flexible Targets)
6. SOE’S (e.g. SAA; Privatisation)
7. POLLUTION / GLOBAL WARMING (e.g. Emission Fees; Tradeable Permits)
EQUITY & EFFICIENCY ISSUES
1.1 PYT – Decline in Progressivity ( Nyamonga & Schoeman, SAJE, 2007)
Possible Extensions:
• Applying one or both measures of progressivity over a longer time period;
disaggregating income into more cohorts (e.g. quintiles)
•
Impact on efficiency – work effort / labour force participation, saving
1.2 Indirect Taxes
e.g. VAT – Exemptions & Zero-rating (Katz Commission, 1995)
•
Has the Katz finding changed? New zero-rated goods & services?
•
Time series analysis of VATp / Yd p and VATr / Yd r (see below); or
•
Stoltz & Jansen: (VATi p / VATi ) / ( Yp / Yt ) with i = 1, 2, ....
Excise & other Indirect Taxes – Tobacco & Alcohol Taxes (Stats SA; Black &
Mohamed, SAJE, 2006; World Bank.1999; Black, SAJE, 2008)
•
Intra-household distributional effects
•
Health effects
•
Tobacco smuggling: lower tax?
•
Alcohol & drunk driving: higher penalty & better law enforcement +
lower tax
EQUITY & EFFICIENCY ISSUES
1.3 Fiscal Incidence
•
i.e Net effect of T Burden and G Benefits (Leistner; McGrath; Janish; Van der Berg)
•
Re “secondary” & “primary” income: % of disposable income (Yt – Td )p spent on
indirect taxes, i.e. [ Ti / (Yt - Td ]p over time?
•
Revisiting assignable (vs non-assignable) G – e.g. social transfers, education,
health, housing
Use of quality indices – e.g. for education and health
•
Re social transfers: intra-household distributional effects
•
Efficiency effects: disincentive to labour force participation; saving
TAX ISSUES
2.1 CGE-based Simulations (McDonald & Punt, SAJE, 2004; McDonald,
Reynolds & van Schoor, SAJE, 2006)
•
Using CGE models to simulate impact of tax changes on GDP, sectors /
industries, employment and distribution – e.g. raising VAT (and lowering
direct taxes); introducing multiple VAT; provincial surcharges; etc.
2.2 Regional integration – tax harmonisation (e.g. Steenekamp, SAJE,
2007 on VAT in SACU). Need for empirical analysis of various options, i.e.
VAT adjustments
•
Ditto excise and direct taxes
EXPENDITURE ISSUES
3.1 Service Delivery (Beier & Visser, SAJE, 2006; Booysen, SAJE, 2007)
•
Bureaucratic red tape – different levels of government and financial
responsibilities
•
Tendering system
•
Incompetence, procrastination, slackness – e.g. lack of monitoring
•
Corruption
Is non- payment a disincentive?
•
Community participation
EXPENDITURE ISSUES
3.2 Infrastructure (Fourie, SAJE, 2006; Bogetic & Fedderke, SAJE, 2006;
Jansen & Schulz, SAJE, 2006)
•
Comparative analyses of impact of different types of infrastructure on
GDP, employment and distribution – given budget constraint and need to
prioritise
•
Forecasting investment needs: extend Bogetic & Fedderke to include
transport infrastructure using different growth and equity scenarios
•
Social infrastructure, e.g. education and health: coordination of gross
capital and operational components of budgets, i.e. schools & teachers;
clinics & health workers; management systems
•
Simplify and streamline financial structures, e.g. transport
HUMAN CAPITAL ISSUES
4.1 Re NGT: Tertiary Education, HSRC, CSIR, Mintek
•
Funding: Borrowing as in case of physical capital?
Retention of skills, e.g. quid pro quo arrangements: minimum periods of
work; exit taxes
•
Acquisition of skills from abroad
5. STRUCTURAL BUDGET BALANCE & FISCAL
TARGETS
(Siebrits & Calitz, SAJE, 2004; Burger & Jimmy, SAJE, 2006)
•
Expenditure, deficit, debt rules in other countries: why do they (not) work?
•
“Potential” GDP (or “full employment” / “natural” GDP): should it be
measured by using an HP filter to generate “the trend GDP” (re Burger &
Jimmy)? Should “potential” GDP be defined in terms of available (local
and imported) capital and labour resources, inter alia? During global
upswings or downswings? Etc.
•
Flexible target where deficit adjusts to ensure previous year’s or targeted
debt / GDP ratio is reached (Burger & Jimmy). But what should be SA’s
targeted debt / GDP ratio?
•
With discretionary policy still relevant, how long are the lags?
6.
SOE’s
•
SAA: reasons for failure; PPE to help turn it around?
•
(Partial) privatisation
distribution
7.
candidates:
ACSA,
ports,
gas
&
electricity
POLLUTION / GLOBAL WARMING
(Hahn, QJE, 1984; Gayer & Horowitz, 2006)
•
Emission fees; tradable pollution permits (“cap-and-trade”)
•
Congestion fees (“pricing”): e.g. Singapore’s electronic tolls; Norway and
London’s access charges + video cameras
TRANSPORT INFRASTRUCTURE : CURRENT FINANCING NETWORK
National Treasury
Dept of Public
Enterprises
National Department of Transport
SAA
SARCC
SANRAL
ACSA
Transnet
Spoornet
+ Own Income
NPA &
SAPO
Provincial
Govs
+ Own Tax & Other Income
Municipalities