Global Connectedness and Bilateral Economic Linkages - Which Countries?

Access to off-shore markets, technology, and ideas are important to greater productivity and higher living standards in New Zealand. Global connectedness requires deep and rich links with other countries. However, as a small country, we only have the resources to focus on a handful of countries. Are there a key set of countries with which New Zealand should be seeking to form deeper bilateral economic relationships? This paper reviews the benefits from deeper external bilateral economic engagements using the insights from the new literature on economic growth, which place great importance on trade; international integration, human capital, and local and cross-border knowledge spillovers from research and development (R&D) and foreign direct investment (FDI). This paper will then use insights from the new literature on economic growth to develop criteria for selecting countries as partners for deeper bilateral economic linkages across six global connectedness dimensions: FDI, R&D links, trade in goods, inbound tourism, education exports, and people linkages. To account for the growing role of a number of economies in global trade, the partner selection criteria will identify two groupings of target countries. The first grouping is focus countries: those countries that are of immediate interest for deeper bilateral linkages. The second country grouping is horizon countries: countries that are likely to grow in their importance to New Zealand over the next 10 to 20 years. The key message of this paper is a greater bilateral economic focus by New Zealand on the major economies along the Asia-Pacific Rim (and the UK). When external initiatives come before decision-makers, they should be seen through a lens that places greater confidence in proposals for deeper relationships with the Asia-Pacific Rim countries (or the UK), and greater scrutiny of proposals that emphasise other regions and countries.economic growth; trade; economic integration; migration; technology diffusion; New Zealand

The Risks and Opportunities from Globalisation

Globalisation, being the trend towards increasing global economic integration, is one of the largest forces, if not the largest force, affecting world economies at present. The current period of global economic integration is unprecedented and the pace and extent of globalisation will continue to have major ramifications for the world, regional and New Zealand economy. It is highly unlikely that the process of increasing global economic integration will reverse. Globalisation offers both risks and opportunities. New Zealand can achieve significant benefits from future globalisation. The challenge will be to ensure that we are one of the adaptive economies that can successfully adopt policies that maximise the benefits and minimise the risks. In responding to globalisation it is necessary to consider policies that promote a globally competitive environment for New Zealand businesses. Further consideration of how domestic policy settings look when viewed through an international competitiveness lens is imperative. This report offers preliminary views on what some of these policies should be. It does not answer fully the question of how New Zealand should respond to the challenges and opportunities of globalisation but it outlines initial views in order to stimulate debate on this topic.

The Disability Tax Credit: Why it Fails and How to Fix It

When the government establishes a social program whose primary purpose is to help provide support to low-income people with disabilities, its success should be measured on how well it achieves that purpose. Unfortunately, there are reasons to seriously question the usefulness of Canada’s disability tax credit since it is helping so very few of the people it is intended to support. In fact, the credit is helping only a small number of Canadians with disability who qualify for it, and least of all those in the poorest families who receive an average of only $29 annually. The reason is not hard to see: Designing the support as a tax credit means that only those Canadians with disability who earn enough income to have them owing taxes can take advantage of it. Yet it is an unfortunate reality that people with disability are often at low incomes precisely because their disability leaves them unable to work in full-time, wellpaid jobs. Thus, the very people who need this support most are the ones least able to take advantage of it. In other words, the neediest disabled Canadians are receiving the least benefit. Far from being a successful policy, the results of the disability tax credit can only be described as disappointing. There is an uncomplicated way to begin rectifying this: By making the disability tax credit refundable. Along the same lines as a guaranteed minimum income, or negative income tax, those low-income Canadians with disabilities who qualify for the credit but lack sufficient income to benefit from the credit could simply be made eligible for a refund of the amount they cannot claim. Simply doing that, turning this non-refundable credit into a refundable credit, would increase the average benefit for Canada’s poorest families with a disabled person from$29 to $511, increasing their total income by a meaningful 4.1 per cent. Just as importantly, where a meagre 0.2 per cent of these families now get any benefit at all from the credit, a refundable credit would now see a majority, 56.4 per cent, receiving benefits. We estimate that this would mean added costs to the federal program of a modest$72 million, or a 17 per cent increase. A similar reform at the provincial level would cost an additional $31 million. An even more effective option for ensuring better outcomes for this policy, however, would be to both make the tax credit refundable and enhance it to triple its value. This would ensure that virtually every family with a disabled person below the low income cut-off, would benefit from the credit and this enhancement would raise their incomes a far more consequential 27 per cent. The costs of this enhanced refundable disability tax credit would be, of course, notably higher, estimated at$516 million federally and $240 million provincially, but it would actually achieve the outcomes that this policy ostensibly intends. The current program may be cheaper, but the value it delivers is trifling and the money, therefore, is arguably heavily wasted. For years there have been calls to make this tax credit work better through refundability. We now have evidence that an enhanced refundable disability tax credit would make the significant difference in the lives of lowincome Canadians with disabilities that the policy was designed to do, but has so far largely failed to do

An Alberta Guaranteed Basic Income: Issues and Options

Poverty remains a persistent problem even in advanced economies, and Alberta is no exception despite robust long-term economic growth.  Serious discussion of poverty reduction through a basic or guaranteed income has reemerged at the federal level and among the provinces, including Québec and Ontario, coinciding with renewed efforts to address child poverty through the Canada Child Benefit and the Alberta Child Benefit.  These relatively new income support programs provide federal and provincial tax credits that are refundable; that is, unlike many current nonrefundable tax credits, they provide a benefit to families that is larger the further their income lies below the level of the credit.  This paper analyzes the prospects for Alberta poverty reduction today through a basic guaranteed income achieved by tax reform that would make most of the current existing nonrefundable tax credits refundable. Our paper demonstrates that a guaranteed basic income achieved by transforming most existing nonrefundable tax credits into a single refundable credit can have substantial impact on poverty in Alberta because it more effectively transfers the income support provided by these credits to lower-income families.  Using version 26.0 of the Social Policy Simulation Database and Model (SPSD/M) from Statistics Canada, we are able to simulate the impact of various options for an Alberta Guaranteed Basic Income (AGBI) that might emerge from this tax change.  Our analysis sets a budget for the AGBI based on current expenditures for the Basic credit and five other nonrefundable tax credits that have a total value of $5.36 billion in Alberta.  For this budget, a wide variety of program options are available based on different combinations of an income guarantee that would be the maximum amount available to a family with no other income and a benefit reduction rate that reduces the income benefit as family income from other sources rises.  We consider the impact of a variety of these program options along multiple dimensions, including the poverty rate based on Statistics Canada’s Low Income Cutoffs poverty line, the depth of poverty calculated as the amount by which family incomes fall below the poverty line, income inequality measured by the Gini coefficient, earnings from the labour market, and the distribution of beneficiaries.   We illustrate our approach by choosing an AGBI with a relatively low benefit reduction rate of 10$6,389 and $9,305 for families with one and two adults, respectively.  While our plan is illustrative, we argue that it is sensible in light of the inevitable trade-offs between changes in the degree of poverty reduction, labour earnings and the proportion of families that benefit from a program of this nature.  The plan provides benefits to 37.3$11.36 billion for Alberta.  We opt for a federal plan with a modest benefit reduction rate of 15% that provides income guarantees of $7,285 and$10,302 for families with one and two parents, respectively.  The combined federal and provincial guaranteed basic income plans provide income guarantees of $13,674 and$19,338 for single and two-parent families with no other income and reduce the income support benefits at a moderate rate.  Disposable income increases by 50.4% for the poorest 10% of families and by 6% for the next poorest 10% of families, and one-third of Albertans received benefits under the combined plan.  As was the case for the provincial AGBI, single parent families and non-elderly and elderly single adults experience an overall increase in their disposable income but the poorest families receive significant benefits on average for all family types.  The rate of poverty among all Albertans drops by 44% and is completely eliminated for single parents and non-elderly and elderly couples.  While poverty remains for two-parent families and the non-elderly single person, its rate declines substantially and its depth is cut by more than half.  The non-elderly single person, the family group that exhibits by far the most poverty, receives the most benefit from the combined plan, as the families with bottom 40% of incomes show gains on average in this group.  Overall inequality, measured by the Gini coefficient, falls by 2.2% compared to 1.6% for the provincial AGBI alone.            Our plan relies on the filing of an income tax return to obtain benefits.  In this regard, it is worth noting that the rate of tax filing in Canada is very high, as about 95 per cent of persons 15 and over file a return.  Those who don’t file a return and those whose incomes fluctuate can rely on social assistance as a source of income, as our plan would supplement that existing basic support program.  In this regard, the provincial social assistance program could be used in concert with the AGBI to reach those who don’t file a tax return and those who require emergency funding within the taxation year because of a sharp decline in income.              Our analysis has attempted to illustrate the impact that a straightforward tax policy change toward refundable tax credits can have on poverty in Alberta, particularly with federal participation in a comparable plan.  As concerns about technological displacement of workers and rising inequality grow, discussion of the need for a guaranteed basic income is unlikely to abate, and we believe that tax reform to make existing tax credits refundable can be effective in delivering what amounts to a guaranteed basic income for families without serious economic disruption.  Most Canadians now file taxes, making such a guaranteed basic income plan a sensible consideration for the future

The Impact of Converting Federal Non-Refundable Tax Credits Into Refundable Credits

With economic inequality on the rise in Canada, the federal government needs to consider innovative solutions. One possibility for improving the tax-transfer system involves refundable tax credits (RTCs). Making all tax credits refundable wouldn’t require Ottawa to introduce new tax measures; the Canadian tax system already contains a mix of RTCs and NRTCs, so the government could simply continue its practice of designing tax credit programs to be refundable. Using Statistics Canada’s Social Policy Simulation Database and Model, this paper examines the impacts and cost of converting NRTCs to RTCs, with and without an income exemption equal to 25 percent of the before-tax lowincome standard for a census family, the Census Family Low-Income Line. Under the Option Without Exemption (OW/OE), RTC recipients are taxed at a single rate of 15 percent, regardless of family size, right up to the Line. Under the Option With Exemption (OWE), RTC recipients are taxed at zero percent up to 25 percent of the Line and at a single rate of 20 percent, regardless of family size, up to 100 percent of the Line. The incremental cost of switching NRTCs to RTCs under the OW/OE is $6.6 billion, as additional benefits are provided to 6.4 million families — slightly less than 37 percent of all families. The cost of the OWE is$7.2 billion, as benefits flow to slightly more families — 6.45 million. However, the percentage of benefits reaching low-income families is much higher under the OWE (69 percent vs. 49 percent). Additionally, the OWE provides an average of nine percent more RTC benefits to low-income tax filers, making it clearly the superior option for poverty reduction. Moreover, the paper shows that alternative conversion schemes that set benefit reduction rates to differ by family size can further increase the benefits to low-income families at a lower overall cost. Such changes would elicit a labour-supply response in terms of a reduction in hours worked, and while the effect is smaller under the less expensive OW/OE, the difference between the two options is slight. This paper simulates the conversion of NRTCs to RTCs in comprehensive detail, besides providing practical advice on how such a shift would be funded. It offers valuable food for thought on an issue that is increasingly critical to Canadian society

Incidence of drouth conditions in southeastern Missouri

Missouri Agricultural Experiment Station and Farm Production Economics Division, Economic Research Service, United States Department of Agriculture, cooperating.Digitized 2007 AES.Includes bibliographical references (pages 34-35)

On the Homology of Branched Cyclic Covers of Knots.

We consider the sequence of finite branched cyclic covers of S\sp3 branched along a tame knot K : S\sp1\to S\sp3 and prove several results about the homology of these manifolds. We show that the sequence of cyclic resultants of the Alexander polynomial of K satisfies a linear recursion formula with integral coefficients. This means that the orders of the first homology groups of the branched cyclic covers of K can be computed recursively. We further establish the existence of a recursion formula that generates sequences which contain the square roots of the orders of the odd-fold covers and that contain the square roots of the orders of the even-fold covers quotiented by the order of the 2-fold cover (that these numbers are all integers follows from a theorem of Plans (P)). We also show that the \doubz/p\sp{r}-homology of this sequence of manifolds is periodic in every dimension, and we investigate these periods for the one-dimensional homology. Additionally, we give a new proof of Plans\u27 theorem in the even-fold case (that the kernel of the map induced on homology by the covering projection M\sb{k}\to M\sb2 is a direct double for k even) in the style of Gordon\u27s proof of Plans\u27 theorem in the odd-fold case (that H\sb1(M\sb{k}) is a direct double for k odd)

The Impact of Converting Federal Non-Refundable Tax Credits Into Refundable Credits

With economic inequality on the rise in Canada, the federal government needs to consider innovative solutions. One possibility for improving the tax-transfer system involves refundable tax credits (RTCs). Making all tax credits refundable wouldn’t require Ottawa to introduce new tax measures; the Canadian tax system already contains a mix of RTCs and NRTCs, so the government could simply continue its practice of designing tax credit programs to be refundable. Using Statistics Canada’s Social Policy Simulation Database and Model, this paper examines the impacts and cost of converting NRTCs to RTCs, with and without an income exemption equal to 25 percent of the before-tax lowincome standard for a census family, the Census Family Low-Income Line. Under the Option Without Exemption (OW/OE), RTC recipients are taxed at a single rate of 15 percent, regardless of family size, right up to the Line. Under the Option With Exemption (OWE), RTC recipients are taxed at zero percent up to 25 percent of the Line and at a single rate of 20 percent, regardless of family size, up to 100 percent of the Line. The incremental cost of switching NRTCs to RTCs under the OW/OE is $6.6 billion, as additional benefits are provided to 6.4 million families — slightly less than 37 percent of all families. The cost of the OWE is$7.2 billion, as benefits flow to slightly more families — 6.45 million. However, the percentage of benefits reaching low-income families is much higher under the OWE (69 percent vs. 49 percent). Additionally, the OWE provides an average of nine percent more RTC benefits to low-income tax filers, making it clearly the superior option for poverty reduction. Moreover, the paper shows that alternative conversion schemes that set benefit reduction rates to differ by family size can further increase the benefits to low-income families at a lower overall cost. Such changes would elicit a labour-supply response in terms of a reduction in hours worked, and while the effect is smaller under the less expensive OW/OE, the difference between the two options is slight. This paper simulates the conversion of NRTCs to RTCs in comprehensive detail, besides providing practical advice on how such a shift would be funded. It offers valuable food for thought on an issue that is increasingly critical to Canadian society