Now's a good time to work on your rules to live by

The week between Christmas and new year is unique among the 52, a week of no great consequence, a kind of no man’s land between the end of the old year and the start of the new. Not a gap year, but a gap week. A week where all the sensible people are on leave and having fun with the family, while the few who must work while others play hope there won’t actually be much work and no one will mind if they skive off early.But I’ve...

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Evil Lord Keynes flies to rescue of disbelieving Liberals

When we entered lockdown in March this year, many people (including me) pooh-poohed Scott Morrison’s assurance that the economy would “snap back” once the lockdown was lifted. Turned out he was more right than wrong. Question is, why?Two reasons. But first let’s recap the facts. About 85 per cent of the jobs lost in April and May had been recovered by November, with more likely this month. It’s a similar story when you look at...

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Working from home takes us back to the future

If there’s one good thing to come from this horrible year, surely it’s the breakthrough on WFH – working from home. This wonderful new idea – made possible only by the wonders of the internet – may have come by force, but for many of us it may be here to stay.If so, it will require a lot of changes around the place, and not just in the attitudes and practices of bosses and workers. With a marked decline in commuting – surely...

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Experts work overtime to take the fun out of Christmas

Feeling bad about the way the pandemic is disrupting your Christmas arrangements? Cheer up, I have good news – of a sort. Keep reading and I’ll convince you Christmas has become so “problematic” you’re probably better off not bothering this year.A bad-to-non-existent festive season is the perfect way to top off this horrible year, leaving us confident 2021 couldn’t possibly be worse. After this, it’s all upside.With nowhere to...

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Year of wonders: Coronacession not as bad as feared

This year has been one steep learning curve for the nation’s medicos, economists and politicians. And you can bet there’ll be more “learnings” to learn in 2021.Just as the epidemiologists learnt that the virus they assumed in their initial worst-case modelling of the effects of the pandemic wasn’t the virus we got, economists have learnt as they continually revised down their dire forecasts of the economic damage the pandemic...

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Job insecurity is about shifting risks, not being flexible

One thing we’ve learnt from the pandemic is that, for those who rely on evidence rather than anecdotes, what we believe to be The Truth keeps changing as we learn more. Take the way the medicos changed their tune on mask-wearing as more evidence came in.It’s the same with the truth about job insecurity. The unions have gone for years claiming that work has become less secure, and in recent years the rise of the “gig economy”...

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Mistreating workers isn’t a smart path to prosperity

Sometimes I think that, when it comes to industrial relations, we’ve gone from one extreme to the other. We used to be pushed around – and frequently inconvenienced – by overly powerful unions, but now the employers are on top and want it all their own way.We’ve gone from often inflexible and unreasonable unions to “workplace flexibility” that’s all about making life easier – and more hugely remunerated – for bosses, while making...

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Start of the end for ratings agencies' dubious influence

Walt Secord, Labor’s Treasury spokesman in NSW, and Michael O’Brien, Liberal Opposition Leader in Victoria, should be condemned for their attempts to score cheap political points when Standard & Poor’s downgraded its AAA credit ratings of both state governments last week. Fortunately, the politicians’ unprincipled carping fell flat.Both men wanted to have their cake and eat it. Neither was prepared to criticise their government’s...

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Productivity is magical, but don't forget the side effects

Something we’ve had to relearn in this annus horribilis is that the state governments still play a big part in the daily working of the economy. Another thing we’ve realised is that the Productivity Commission is so important that some of the states are setting up their own versions.When you put the word “productivity” into the name of a government agency, you guarantee it will spend a lot of its time explaining what productivity...

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We're having trouble learning to live without inflation

When I became an economic journalist in the early 1970s, the big economic problem was high and rising inflation. The rate of increase in consumer prices briefly touched 17 per cent a year under the Whitlam government, and averaged about 10 per cent a year throughout the decade.It never crossed my mind then that one day the rise in prices would slow to a trickle – they rose by 0.7 per cent over the year to September – and I certainly...

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The secret sauce is missing from our recovery recipe

According to Reserve Bank deputy governor Dr Guy Debelle, a big lesson from the global financial crisis was “be careful of removing the stimulus too early”. Good point, and one that could yet bring Scott Morrison and his nascent economic recovery unstuck. But there’s something that’s even more likely to be his – and our – undoing.Debelle was referring to the way the British and other Europeans, having borrowed heavily to bail...

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Economy's rebound goes well, but now for the hard part

Does the economy’s strong growth last quarter mean the recession is over? Only to those silly enough to believe in "technical" recessions. Since few economists are that silly, it’s probably more accurate to call it a "journalists’ recession". Makes for great headlines; doesn’t make sense.It’s probably true – though not guaranteed - we’ll suffer no more quarters where the economy gets smaller rather than bigger. But people fear...

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Super risk: be poorer today so you can live it up tomorrow

For a columnist, the trouble with taking leave is that something really interesting or important is likely to happen while you’re away from the keyboard. It’s now more than a week since the Treasurer Josh Frydenberg released the long-awaited review of retirement income by former Treasury heavy Mike Callaghan. But not to worry. I suspect we’ll still be furiously debating the report’s findings come the next election.For most people,...

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THE POST-COVID ECONOMY: How our economy has changed

Talk to virtual Comview conferenceI want to talk to you about how the Australian economy has changed as a result of the pandemic, including a once-in-30-year change in the macro-economic policy mix, and consider how the economy can recover from this unique recession.You don’t need me to tell you that the coronavirus is the greatest threat to the health of Australians and the entire world since the “Spanish” flu pandemic a century...

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Reserve Bank suffering relevance deprivation syndrome

I’m sorry to say it, and it’s certainly not the done thing to say, but the Reserve Bank looks to me like that emperor with a serious wardrobe deficiency.Apart from the nation’s allegedly “self-funded” retirees – whose angry letters to Reserve governor Dr Philip Lowe must by now be absolutely blistering – no one wants to question last week’s decision to make what must surely be the smallest-ever cut in the official interest rate,...

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Treasury chief warns big changes are on the way

When finally the pandemic has become just a bad memory, we’ll see it has left big changes in the way the macro economy is managed and the way we work and spend. Whether that leaves us better or worse off we’ve yet to discover.That’s the conclusion I draw from Treasury Secretary Dr Steven Kennedy’s (online) post-budget speech to the Australian Business Economists on Thursday, the restoration of a tradition going back to the 1990s.Kennedy...

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