Labor's lick and promise to beached job-seekers

You have to feel sorry for pollies in government. While economists (who have a built-in bias against government intervention) are forever pressing them to cut government spending, and the punters are perpetually refusing to pay more tax, everyone is urging them to do something about an endless number of genuinely worthy causes. How can they win? They can't. Unfortunately, rather than limiting the number of problems they know...

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Adapt or die: the high dollar is here to stay

The big ''known unknown'' facing the economy is how long commodity prices and the Aussie dollar will stay so high. That's why some people worry so much about the Chinese economy coming unstuck. But while the new secretary of the Treasury, Dr Martin Parkinson, acknowledges the risks facing China's economy, his ''central scenario'' is that commodity prices and the Aussie will stay high for a long time. This means that, though...

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Tough love or kindness - a taxing dilemma

Something very important is at stake in this year's budget and the opposition's response to it: the shape of Australia's welfare state. Will it continue to be needs-based, or will we progressively make benefits universal - available to everyone regardless of income? Historically, people on the conservative side of politics have strongly supported means-tested benefits, whereas people on the left have been attracted to the idea...

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Gillard's budget critics run for cover

One reason governments aren't nearly as "tough" as economists and others urge them to be is their knowledge that when the going gets rough - when the losers from that toughness start vigorously objecting - the urgers will be missing in action. The reaction to last week's budget offers a good example. On budget night every petshop galah was complaining it wasn't tough enough - a "missed opportunity", the last Julia Gillard will...

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Lousy budget? Don't be fooled by harsh critics

If you listen to the economists and commentators complaining the budget wasn't tough enough - a "missed opportunity" - and involves budget deficits higher than earlier expected, you could easily conclude it's a weak effort that does little to keep the economy on the right track. But you'd be misled. It's true the budget's estimate of an underlying cash deficit of $49.4 billion for the financial year just ending is about $8 billion...

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Despite apparent contradictions, Swan shows courage

Julia Gillard and her government may be suckers, but they deserve an even break. Every budget contains things to criticise but, overall, this one is good. We were warned it would be tough and it is - especially on the better-off.It could have been more excruciating - economists are hard to please when it comes to inflicting pain - but it's tougher and more courageous than all but the first of the 12 budgets the now-sainted Peter...

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Stevens sells his moral authority

Everyone who's seen The Godfather knows how the Mafia works: it's more than happy to do you a favour, but once it has it owns you forever. Our coterie of grossly overpaid chief executives and directors operates much the same way. They're a mutual pay-raising society - you raise my pay and I'll raise yours - and more than a year ago they induced the governor of the Reserve Bank, Glenn Stevens (a most estimable fellow in every...

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Sack the Treasury head, make Victoria look good

ARE you very trusting of the way politicians handle taxpayers' money? Do you fear a lot of government spending is wasted on vote-buying, frippery and gimmickry? Do you want to pay higher taxes? Do you worry about pollies running big budget deficits and racking up too much government debt? Do you think state politicians are more fiscally responsible than their federal counterparts or less? Do you really believe Labor is hopeless...

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Make people employable

Australia is sitting pretty. We avoided the worst of the global financial crisis and now the return of the resources boom means the world is paying extraordinary prices for our coal and iron ore. Those prices will ease back but, even so, huge investment in new mines and natural gas facilities is likely to keep the economy growing strongly for at least the rest of the decade. The other developed economies would kill for prospects...

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Games show how economists lead us astray

In universities these days they play a lot of games - though when the economists play they prefer to call it "game theory". And game playing is one of the most potentially useful things academics do. The most famous game played by social scientists is "the prisoner's dilemma". As described by Wikipedia, two suspects are arrested by the police. The police have insufficient evidence for a conviction, but they keep them separate...

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