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Public Sector Informant : PSI - September
NEW ANZSOG Executive Workshops It will be valuable to people in a policy role but also managers in an operational or service delivery role. Governments now require greater scrutiny and assessment of public sector programs to determine whether these programs are 'working'. Evaluation is now seen as an integral part of decision-making, rather than an afterthought. The course, lead by Dr George Argyrous (UNSW), Prof Patricia Rogers (RMIT) and Assoc Prof Jo Baulderstone (Flinders University), will cover the conceptual and practical issues involved in evaluating public-sector policies and programs. The course focuses on the following key issues: the role of evaluation in decision-making the application of program logic the methods of gathering evidence in an evaluation and assessing their validity working with consultants, and managing an evaluation. Who should attend? Public sector managers and program coordinators who: need to assess the quality of evaluation reports need to be involved in the planning and conduct of an evaluation study need to manage consultants contracted to do an evaluation study. Lead by Prof Paul 't Hart (ANU & Adjunct Professor, ANZSOG), this intensive workshop is designed to strengthen senior executives' capacity to deal strategically with a wide range of possible crises their organisations face. Drawing upon a world-wide, cross-sectoral research base covering natural disasters, industrial accidents, economic breakdowns, political scandals, escalated social conflicts, terrorist events and major policy fiascoes, the workshop encourages active learning through a combination of case study exercises, role-playing, peer feedback and encounters with expert witnesses from both the public and private sectors. This workshop will be valuable to all senior executives in the public sector. Any SES-level manager who needs to play a leadership role during a crisis -- no matter what form it takes - will find the workshop useful. For further information about these and other Executive Workshops, please contact Executive Workshop Coordinator Lechée De Chavez on (03) 9285 9116 or firstname.lastname@example.org Evaluation for Public Sector Managers 7-8 October 2010, Sydney REGISTER NOW Leadership in Times of Crisis 14-15 October 2010, Sydney REGISTER NOW Jo Baulderstone Patricia Rogers George Argyrous www.anzsog.edu.au facebook.com/ANZSOG twitter.com/ANZSOG [SEPTEMBER 2010] 14 THE PUBLIC SECTOR INFORMANT [ECONOMICS:ROSS BUCKLEY] Taming the markets that feed on our Financial taxes For the sake of the market itself, Australia must back advocate a bank levy and a transactions tax If our government is arguing against the bank levy, it is wrong to do so. It indicates the influence of the big four banks rather than good policy. In classic European fashion, the French and German governments agree, but what they agree about is not abso- lutely clear. It seems French President Nicolas Sarkozy and Ger- man Chancellor Angela Merkel want the G20 to introduce a levy on all assets of banks and to tax financial transactions at a very modest rate. But it appears they will settle for the bank levy because they know that a tax on wholesale financial transac- tions is more ambitious and difficult to achieve. This is a pity, for the world needs both. And if only one is available, we need a financial transactions tax more. Puzzlingly, the Australian gov- ernment seems to want neither. One of the challenges of discussing these options is that different people mean different things when they call for a ''levy'' on banks. In essence, this is a very low tax, probably imposed on all financial institutions -- not just on banks -- and calculated according to the assets of individual institutions. The International Monet- ary Fund is calling for two levies of this type: a financial stability contri- bution, which would be levied on assets and put aside to fund future bail-outs; and a financial activities tax, to be levied on financial institu- tions' profits and staff remuneration. The IMF suggests that countries set the rate for the second of these, which has the delightful acronym FAT, so that it raises between 0.2 per cent and 0.4 per cent of gross domestic prod- uct a year. A financial transactions tax, on the other hand, is a tiny tax on all wholesale financial transactions, set at perhaps 0.05 per cent, or one-20th of 1 per cent. Levied on transactions entered into for the medium to long term, it would be an insignificant amount, but on transactions entered into for seconds or minutes it would be more onerous. The French and German govern- ments put the bank assets levy, and perhaps the transactions tax, on the agenda of the G20 leaders meeting in Toronto last month. The need for both a levy and a tax is made clear by the balance sheets of most rich nations, which are in tatters. Accord- ing to the IMF, the G7 nations alone owe $US30 trillion in debt. The levy is needed to build up reserves so that if banks require rescuing again, as they most certainly will at some point, the next bail-out will be funded by the financial sector, not taxpayers. As the IMF has put it, ''Expecting taxpayers to support the sector during bad times while allowing owners, managers and/or creditors of financi- al institutions to enjoy the gains of good times misallocates resources and undermines long-term growth.'' And the managers of financial institu- tions are indeed enjoying the gains again. In the year to April 30, 2010, The New York Times reports, the United States' 25 top hedge fund managers ''earned'' $US25 billion. At the rates being discussed, the levies are sufficient to fund future bail-outs but are inadequate to plug the massive holes in national balance sheets, holes created by the need to bail out banks while stimulating national economies to counter the damage done by the financial crisis. This is one reason why we need a financial transactions tax: it would raise many times more than a levy, and the funds would be used to repair national balance sheets and address the massive remaining problems of global poverty and climate change adaptation in poor countries. But there is another, even more pressing, reason for a transactions tax. It may seem like a paradox, but we need the tax because we need efficient markets. Markets determine prices and allocate resources far better than any other mechanism. Capitalism relies on markets work- ing. As the global financial crisis has proven dramatically, global financial markets are less regulated, and work less well, than in decades past. They also work much more quickly. Many French hedge funds recently moved their trading com- puters to London because the time it took electronic messages to travel from Paris was placing them at a disadvantage. Across the Atlantic, Goldman Sachs has moved its com- puters right beside those of NASDAQ, the online exchange, and each millisecond gained, by Gold- man's own admission, is worth at least $US100 million. Assets are often bought, held and sold in under a second. No human mind is brought to bear on these individual trades and the economic fundamentals, includ- ing the value of the asset, are not factored into the algorithms that direct the computers. The head of Britain's Financial Services Agency, Lord Jonathan Turner, has described this type of trading as ''socially useless'', but it's worse than that. Super-brief trades move prices a little. Momentum programs then come into play and trade on these micro-movements, reading them as the beginning of a trend. The net result is that for long periods prices can deviate substan- tially from what they would be if based on economic fundamentals. This is a major source of inefficiency; and it isn't the only one. Hedge funds pay very little tax and investment banks pay less than their
PSI - October