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Practices and Attitudes to Derivatives Use in Australian Commonwealth Organisations
Author(s) -
Brailsford Timothy J.,
Heaney Richard A.,
Oliver Barry R.
Publication year - 2003
Publication title -
australian journal of public administration
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.524
H-Index - 41
eISSN - 1467-8500
pISSN - 0313-6647
DOI - 10.1111/1467-8497.00328
Subject(s) - commonwealth , public sector , statutory law , private sector , variety (cybernetics) , bankruptcy , accounting , risk management , business , public relations , plan (archaeology) , public administration , finance , political science , law , archaeology , artificial intelligence , computer science , history
Little is known about risk management in the public sector. This study reports on a survey of senior officers in Australian Commonwealth companies and statutory authorities concerning their practice and attitudes towards the use of derivative instruments for risk management. Using a variety of tests, the most important issue identified by respondents concerning the use of derivatives is for budgeting purposes. Of note, respondents rank commonly cited reasons advanced in the private sector, such as reduced bankruptcy costs and taxation, as being relatively unimportant, which is consistent with arguments advanced in the paper. The results also indicate that there are significant differences in the level of importance in some issues regarding derivatives use across public sector organisations, particularly those differentiated by a documented risk management plan. The study also documents for the first time the extent of derivatives use in the Australian public sector.