China does its own thing in its own way

On the prospects for China's economy, it's easy to be wrong. We analyse unfamiliar things by comparing them with things we understand, but in its massive size and economic history, China is one of a kind. That's one conclusion I've drawn from a visit to China as a guest of the Australia-China Relations Institute, at the University of Technology, Sydney, and the All-China Journalists Association. In recent years people in the...

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Liberals ignore the moderate middle at their peril

It's amazing to realise that the greatest threat to the success of the Turnbull government comes from the Liberal Party. Malcolm Turnbull's biggest enemies are inside his own government, not outside. If he's to make sufficient progress with controlling the budget and reforming the economy to warrant re-election in three years' time, he needs to mix budget restraint with fairness, and combine efficiency with equity. This, after...

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Government outsourcing has many pitfalls

Labor's Mediscare will have a benefit if it causes our politicians to think twice before they resort to "outsourcing" or "contracting out" the provision of government services, a practice that's led to a string of disasters. The pretext for Labor's claim that the Coalition was planning to "privatise" Medicare was the Turnbull government's intention to save a little money by shifting the processing of Medicare's many bank transfers...

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A SLIGHTLY DEFENSIVE CRITIQUE OF AUSTRALIAN ECONOMIC JOURNALISM

History of Economic Thought Society of Australia, annual conference, Melbourne, July 14, 2016It’s a huge pleasure to speak at conference where passing remarks about your predecessors and competitors is not seen as a self-indulgent irrelevance. I’m going to leave it to Gerard to talk about two key pioneers of economic journalism in this country - Jack Horsfall and Max Newton - and say a little about the early, current and future...

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Election result need not be a setback for good government

Maybe those who complain about a boring election campaign are condemned to an exciting election finish. Many in the establishment – particularly the business establishment – have convinced themselves the country is off to hell in a handcart, but it doesn't have to be like that. The nation won't be ungovernable provided Malcolm Turnbull is willing to negotiate with the minor parties when necessary – hardly a new experience for...

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Oh no, not a credit rating downgrade

Sorry, but I've put Standard and Poor's and the two other big American credit rating agencies on a negative watch. For me, the rating agencies' involvement in the global financial crisis has destroyed their credibility forever. I can no longer take their solemn pronouncements seriously, nor hear them with the reverence or contrition they imagine themselves entitled to. The rating agencies were one of the private sector institutions...

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Workforce participation a key for Turnbull's new plan

Now it's likely the Turnbull government will scrape back to office, what's next? What will it do to improve our economic prospects? Malcolm Turnbull went to the election offering a "national plan for jobs and growth" that was supposed to secure our future. Trouble is, it now looks unlikely he'll be able to implement the centrepiece of that plan, the phased reduction over 10 years of the rate of company tax, from 30 per cent...

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Who really wins from Mediscare

The success of Labor's "Mediscare" in this election is worrying - but not for the reason you may imagine. Its greatest effect may be to fatten the incomes of medical specialists and corporate medical suppliers. Scare campaigns are often effective politically, but they can impose a high price on the country's good government. Tony Abbott's highly successful scare about depredations of the carbon tax at the last election has...

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Voters reject economics as usual

Assuming the government scrapes back in, this surprisingly poor election result for the Coalition carries hard lessons for politicians and those who seek to influence the policies they pursue: business people, economists and econocrats. In this election economic issues dominated, and those hard lessons are about economic management and economic reform: what voters will let you do and what they won't. It was a fight between...

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ECONOMIC JUSTICE

Talk to Salvation Army Moral and Social Issues Council National Conference, Melbourne, July 2, 2016I spent the first 25 years of my life imbibing the Christian beliefs and social values of Salvationists, and the rest of my life learning - and later critiquing - the principles of conventional, “neo-classical” economics, particularly as it is practiced in the Australian political debate. So I see my role this morning as acting...

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Infrastructure spending isn't good if it's just vote-buying

There's a great weakness in the (otherwise sound) argument that borrowing for infrastructure is a good thing, adding to demand in the short term and improving productivity and supply in the medium term. We should be doing a lot more of it, which would impose no unfair burden on our children. That weakness has been exposed by the election campaign. Marion Terrill, of the Grattan Institute, has looked at the parties' promises...

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