Forest logging propped up by conservationists

Everyone knows the environment and the economy are in conflict; that any effort we make to protect the environment comes at the expense of profit and jobs. So, for instance, everyone knows that if the community wants to see restrictions on the logging of native forests in Tasmania, it's only reasonable for the government to compensate the industry and its workers for their loss of livelihood. And this is precisely what the...

Read more >>

Parties' sameness hides a big difference

You could be forgiven for concluding there's little to pick from in this election; the age of ideology is long gone and the true difference between the parties is minor. The two sides have assiduously eliminated their differences to the point where we're asked to choose between the red management team and the blue management team. You could be forgiven for thinking all this because there's much truth to it. The more "scientific"...

Read more >>

Checkmate election spells fiscal indiscipline

It's truly ironic that after spending five years banging on about debt and deficit, and then proclaiming us to be in a budget emergency, the side most likely to form the next government has made one fiscally irresponsible commitment after another. It's all part of the way the two sides' long-running battle of the scare campaigns has morphed into a checkmate election campaign in which most effort has gone into eliminating the...

Read more >>

Resurces boom now a growth negative but still going

Kevin Rudd keeps saying the China resources boom has ended, but Reserve Bank governor Glenn Stevens said recently the boom was merely "changing gear" and going through a "phase shift". So who should we believe? The econocrat, of course. The politician is exaggerating. It's true, however, that we have reached a highly significant point in the boom: though it's far from ending, we've reached the point where it's gone from making...

Read more >>

ECONOMICS FAQ

Talk to VCTA Teachers Day, Melbourne, Friday, August 23, 2013 Often when I talk to economics teachers I focus on helping them keep up to date with the latest thinking on some topic, believing they need to know a lot more background information than their students do and leaving it for them to decide how much of what I’ve said they need to pass on to their kids. But this time I’m going straight to the classroom to give you answers...

Read more >>

Why election campaigns have become so vacuous

For many of us, the big question isn't who should win the election - or who will - but why election campaigns have become so vacuous. Why so much politics but so little policy? So much argument but so little debate? So much sound and fury signifying not very much? No doubt there are many reasons but I suspect an important one is that campaigning has become more professional, more scientific. The consultants and others who advise...

Read more >>

Mixed motives for Hockey’s budget intransigence

Joe Hockey has many reasons - worthy and unworthy - for avoiding making any firm commitment on when an Abbott government would get the budget back to surplus. Starting with the worthy ones, Hockey is perfectly justified in saying the outlook for the economy as it makes the transition to more normal sources of growth is far too uncertain, and the consequent forecasts and projections for the budget balance shown in Treasury's...

Read more >>

Budget forecasts for adults only

When Treasury and the Department of Finance issued their pre-election economic and fiscal outlook statement this week it had something written on the cover in invisible ink: Why don't you all grow up! Although the figures in the PEFO ("pee-fo") for the forecast and projected growth in the economy and the change in the budget balance over the four years to 2016-17 were virtually identical to those in the Labor government's economic...

Read more >>

City and country problems all demand higher taxes

At last we've settled on an election issue of substance: did Kevin Rudd use notes in the TV debate and was this against the rules? And that's not all: did he rustle his notes and, if so, was this deliberate or just a nervous mannerism? The two leaders' aim in the debate was the same as their aim in this campaign: to make it to election day while giving as few commitments as possible about what they'll do in the next three years. I...

Read more >>

How controversial change can still be achieved

As you see from Tony Abbott's unceasing attack on new taxes and both sides' wariness on calls for an increase in the goods and services tax, the politicians on both sides are certain voters are united in not wanting to pay a cent more in taxes. This certainty is unshaken by much opinion polling seeming to suggest the contrary. Which makes it remarkable that, with a minimum of fuss a few days before this year's budget, both...

Read more >>

Using micro-economics to analyse savings account levy

Treasurer Chris Bowen says he's imposing a new savings account levy on our super-profitable banks, but the banks say they'll just pass it straight on to their depositors. They say it, but can you believe it? Details of the levy haven't been announced, but we can piece them together. It won't take effect until January 2016, and it's expected to raise almost $750 million in its first 18 months. It will apply to all deposits of...

Read more >>

THE (ECONOMIC) CASE FOR A MORE EQUITABLE AUSTRALIA

Gavin Mooney Memorial Oration (with Rev Tim Costello), Melbourne University, Wednesday, August 7, 2013 I didn’t know Gavin Mooney, but I do know that, unusually for an economist, he had a deep concern for fairness or, as economists call it, ‘equity’. So it’s highly appropriate that, in this the inaugural Gavin Mooney Memorial Oration, we address ‘the case for a more equitable Australia’. I want to talk about the economic case...

Read more >>

It's the season for breakable promises

Election campaigns are dangerous things. They're dangerous for individuals who get caught in the crossfire between political leaders, dangerous for good policy and dangerous for the credibility of politicians. They're also times when policy statements fly so thick and fast we often fail to notice matters that affect us. I suspect election campaigns have become more vicious, life-or-death affairs as politics has become less about...

Read more >>

Hockey's populism ties Labor in budget knots

The political experts don't seem to have noticed how successfully Joe Hockey has outfoxed Chris Bowen and Kevin Rudd on the questions of budget promises and perceptions of economic competence. Hockey's fast footwork achieved its most dramatic success on Friday when Labor re-nailed itself to the cross of a Treasury budget projection almost four years into an unknowable future only a few months after Wayne Swan and Julia Gillard...

Read more >>