With bad news this week from the March quarter survey of business capital expenditure, we need cheering up. Fortunately, budget statement No. 2 shows Treasury has been looking under every rock to find some good news.
It kicks off its annual assessment of the economic outlook by reminding all us worriers that the economy is entering its 25th consecutive year of growth, which is the second longest continuous period of growth of...
Saturday, May 30, 2015
Wednesday, May 27, 2015
It's skilless men, not mothers, we should get into jobs
One of the main things I've concluded after years in this job is that, although the economic dimension of our lives – the earning and spending of income – is vitally important, it's far from being the only important aspect. And we disregard those other dimensions – the relational, the social, the cultural and the spiritual – at our peril.
In this age of hyper-materialism, we're in constant danger of forgetting that. It's true...
Monday, May 25, 2015
Blame pollies and media for low political standards
As intensified personal ambition has heightened competition between the parties, unwritten rules that certain subjects were off limits to the political contest have gone by the board.
The obvious example is immigration, Asian immigration in particular, and boat people.
For many years, both sides knew there was an ugly, xenophobic side of the Australian character and tacitly agreed not to do or say anything that would give it...
Sunday, May 24, 2015
GITTINS the book: sneak preview II
Why did an accountant who'd forgotten most of the economics he was supposed to have learnt at uni and never really learnt to be a reporter, go from cadet journalist to economics editor in four years?
Because he had the immense good fortune to be in the right place at the right time.
I joined the Herald just as the startling policies of the Whitlam government and the global economic disruption of the first OPEC oil price shock...
Saturday, May 23, 2015
GITTINS the Book: Sneak preview I
I was an "OK" - an officers' kid. Both my father and my mother were officers (ministers) in the Salvation Army and, until I left home at 21, the Army and its strange way of life dominated mine.
For 45 years my father was in charge of a succession of small corps, or churches, around Queensland and NSW. This meant our family moved every two years, sometimes every year.
I ended up attending five primary schools and three high...
Very low rates are more worrying than you think
Never thought I'd see the day when Treasury willingly surrendered the leadership of the nation's economists to the Reserve Bank, but it happened this week.
The new Treasury secretary, John Fraser, has broken a tradition lasting more than two decades to speak about the budget at a luncheon of the Australian Business Economists on the following Tuesday.
This follows the absence of Budget Statement No. 4 from last week's budget...
Wednesday, May 20, 2015
Lower taxes both a delusion and an illusion
I wish I'd been the first to say that last week's was the Don't Worry, Be Happy budget. Last year it was unrelieved cuts in government spending and earnest talk about facing up to the "budget emergency" and "debt crisis".
This year it's all good news for families and small businesspeople, with hardly a mention of deficits and debt – even though the outlook for both has worsened in the intervening period.
But if you always felt...
Monday, May 18, 2015
Don't trust the knockers of Treasury forecasts
People keep asking me whether the budget's forecasts for the economy are "credible". Of course they are. But that's not saying much. And here's a tip: don't believe those saying that Treasury's forecasts are way too optimistic or way too pessimistic. They wouldn't know.
Treasury and the Reserve Bank – whose forecasts are essentially a joint exercise – put an enormous amount of time and expertise into their forecasts, far more...
Saturday, May 16, 2015
Media get budget wrong
As an exercise in media manipulation, this week's budget scores top marks. The government's spin doctors managed to convince the media it was a "stimulatory budget" when it was actually mildly contractionary.
With financial markets trading virtually continuously, the old need to lock the media up on budget day until the markets had closed disappeared decades ago. The only reason for continuing the practice is to maximise the...
Thursday, May 14, 2015
Budget has reverse weaknesses, strengths to last year's
This is the budget of a badly rattled government that has put self-preservation ahead of economic responsibility. It will do much to restore Tony Abbott's political fortunes, but next to nothing to return the budget to surplus or hasten the economy's return to strong growth.
What it's not is "dull". Turns out, when Abbott promised a dull budget what he meant was one that was the opposite of last year's.
This budget will be...
Monday, May 11, 2015
How Hockey can do the impossible in the budget
I wouldn't like to be in Joe Hockey shoes as he prepares to deliver the budget on Tuesday night. Which is not to say I or any other commentator will be going easy on him. It's too important a job for that and, after all, he volunteered for it.
To be bringing down our eighth budget in a row with a substantial deficit when, according to popular opinion, we didn't even have a recession, is pretty hard to explain.
Our problem is...
Saturday, May 9, 2015
Two-speed economy has gone away
Remember the two-speed economy we used to hear so much about? Well, no one in the media has thought it worth mentioning, but it's gone away.
It's remarkable how the media can get so excited about some "problem" but then never mention it again.
The two-speed economy was caused by the first two stages of the resources boom, of course, with the high commodity prices and mining investment boom causing the resource-rich states to...
Wednesday, May 6, 2015
Jobs matter more than balancing the budget
With the budget due next Tuesday, the media are about to revert to another period of obsession with government spending, taxation, deficits and debt. I'll probably be more obsessed than most. But before the circus starts, let me offer a little pre-match pep talk.
Don't take it all too literally. Try to put it in a wider context. The budget is worthy of the attention the media give it, but not for the reason many people imagine.
The...
Monday, May 4, 2015
No more shortcuts to budget surplus
Maybe we're getting somewhere. The nation's almost unanimous rejection of the proposed Medicare co-payment has proved to be a blessing. It's obliged the replacement Health Minister, Sussan Ley, to go back to basics and find genuine savings.
It won't be long before we find out what effect the failure of last year's budget has had on this year's. Judging by most accounts, it won't a favourable one.
Badly burnt by the monumental...
Saturday, May 2, 2015
Resources boom not done yet
If you think the resources boom is all over bar the shouting, someone who ought to know begs to differ. He thinks the last phase of the boom is just getting started. But even he thinks the boom leaves us with stuff to worry about.
In a speech this week, Mark Cully, the chief economist of the federal Department of Industry and Science, says the resources boom actually consisted of three booms.
The price boom lasted for about...
Friday, May 1, 2015
FOREWORD TO MONOGRAPH BY CONNORS AND MCMORROW, PUBLISHED BY THE AUSTRALIAN EDUCATION REVIEW
May 2015Many of those of us old enough to remember, pride ourselves that the sectarian bitterness of our youth is long gone. The debates over ‘state aid’ to Catholic and other non-government schools are now just a distant memory. Similarly, many of us like to believe that the class-based struggle of old is no longer part of modern political life.But the continuing influence of both sources of conflict isn’t hard to find in federal...
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