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 VAT p / Y d p and VAT r / Y d r (see below); or Stoltz & Jansen: (VAT i p / VAT i ) / ( Y p / Y t ) 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 (Y t – T d ) p spent on indirect taxes, i.e. [ T i / (Y t - T d ] 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 candidates: ACSA, ports, gas & electricity distribution 7. 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