Our resources boom comes bouncing back

This time three months ago it was clear the economy was being propped up by rapidly withdrawing budgetary stimulus, and it was not clear private spending would perk up in time to take over the running. This time two weeks ago it seemed clear business investment spending was doing OK but households were dragging the chain, with retail sales and home building approvals surprisingly weak. What a difference three months...

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House, marriage and children - in their own sweet time

The media leap on any suggestion of social change. At present there's talk of younger people being happy to keep renting rather than buy their own homes. Before that there was talk of career women not wanting children. And before that, we kept hearing about young people not bothering to get married, even after the kids had started arriving. I guess there's some truth in all these stories. Perhaps the truth is that, whereas...

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Why political rivalry reduces voters' options

Simple economic theory tells us competition leads to increased choice. But as the election campaign showed, competition between the two main parties seems to be reducing the choice we're offered. Before the election, many people complained about how unengaging the campaign was. It didn't seem to be aimed at people with brains. It seemed dominated by trivia. The two sides were locked in furious argument, but the policy differences...

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Numbers say we're growing quite nicely

The mildness of last year's recession means the economy has now entered its 20th year of growth since the deep recession of the early 1990s. But how has this growth been distributed through the economy? That's a question Ric Battellino, the deputy governor of the Reserve Bank, set out to answer in a most informative speech last week. It's a question you can answer in different ways. For a start, since June 1991, 3.5 million...

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Revolution of thinking voter turns politics green

Sorry but I'm not convinced a hung parliament is a terrible thing. It may end up being a good thing. I see it as the revolt of thinking voters against an election campaign that was aimed almost exclusively at unthinking voters. Labor's been given an almighty kick in the pants but there was no enthusiastic embrace of the Liberals, whose campaign was almost completely negative. The parties should take it as a warning that if...

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Voters censure Labor's lack of principles

The one thing we can be sure of is Labor has suffered a huge reverse. While we wait to learn which party will form government, it's instructive to ponder what it did wrong. By all the rules of federal politics, Labor should have romped home. The rules say first-term governments get an extension to finish proving their worth. They say governments get tossed out after they've allowed the economy to bomb, not after they've...

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The deficit we really should worry about

The biggest and most worrying deficit in this election campaign has been the policy deficit: the reluctance of both sides to debate any aspect of economic management bar the budget. What has passed for economic debate has proceeded from the proposition that the federal budget equals the economy. So let's see if we can get through a discussion of our economic policy challenges without further mention of that instrument. The...

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Both sides fall victim to budget humbuggery

It's not just Tony Abbott who has been running from a debate on the economy. Both he and Julia Gillard have avoided serious discussion of the economy in this election. Federal election campaigns usually focus on the economy, but this time both sides have been obsessed with something much narrower; the federal budget. Managing the economy involves concern about inflation, unemployment, interest rates and - conventionally...

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Labor deserves credit, not death at ballot box

We may live in a globalised world but it hasn't made our election campaigns any less parochial and inward-looking. Perhaps in an effort to raise Australians' economic literacy, the Economic Society recently sponsored a national tour by Professor Joe Stiglitz, a Nobel prize winner and one of the world's most illustrious economists. Some brave soul asked him if he'd learnt anything while he was here. Well, he said politely,...

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Blowing the whistle on unfair costings game

I refuse to dignify the parties' predictable squabbling over the cost of each other's promises by taking it seriously. I don't know who's right and I don't much care. There are more important things to worry about. It's a three-yearly farce that drips with hypocrisy and fake importance. I'm not sure why the parties always fall to furious arguing about Costing Blunders. Perhaps it's always started by the government of the...

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Miners moan, but we need our fair share

It's easy to forget that the future of the minerals resource rent tax - the most significant tax reform since the goods and services tax was introduced a decade ago - hangs on the outcome of this election. Should Tony Abbott win, he won't proceed with introducing the mining tax in July 2012, meaning he won't proceed with most of the tax concessions the new tax would pay for. Labor has justified the tax as necessary to...

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Gillard's Law of economics at a crass roots level

Frederick Taylor, the American inventor of "scientific management" a century ago, believed workers were dumb and lazy. So the tasks they were required to perform had to be broken down into the simplest of steps and they needed to be closely supervised. The only way to motivate them was by paying piece rates - what today we'd call "performance pay". I'm sure Julia Gillard would never admit to regarding "hardworking Australians"...

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Claims of stimulus waste were greatly exaggerated

Media reporting and opposition politicking have left many people with the impression much, if not most, and maybe even all of the billions spent on school buildings under the Rudd government's stimulus package has been wasted. It's an impression based on the piling up of unproved anecdotes about waste or rorting of particular school building projects. Which means it's an impression that's not genuinely "evidence-based". Enough...

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ONLY CAPITALISM CAN SAVE THE PLANET

IQ2 Debate, Sydney City Recital Hall Tuesday, August 10,2010 The older I get, the more I worry about saving the planet. The past 200 years have seen a phenomenal expansion in economic activity around the world. In that time, the world’s population has exploded from one billion to 6½ billion. Over the same period, the average standard of living of all the people in the world has increased sixfold. Multiply the two together and...

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Don't be fooled by debt spin

In an ideal world, the economic debate between the two sides in election campaigns would leave voters with an accurate picture of the issues and choices. If one side said something wrong or misleading, this would be quickly refuted by the other. Unfortunately, it doesn't work like that. Both sides are seeking votes, not enlightenment. When one side makes a misleading but seemingly persuasive point against the other, the...

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Stop beating about the bush and talk about Big Australia

Something significant has happened in this hollow, populist election campaign: the long-standing bipartisan support for strong population growth - Big Australia - has collapsed. Though both sides imagine they're merely conning the punters, it's hard to see how they'll put Humpty Dumpty together again. Which will be no bad thing. The original bipartisanship was a kind of conspiracy. The nation's business, economic and political...

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Labor's no worse, and no better, than the Libs

To the superstitious, the meaning is clear: Julia Gillard and her Labor mates must be OK on economic management, otherwise God wouldn't have let her off the hook by causing the quarterly inflation reading to be low and thus averting a mid-campaign rise in interest rates. Or perhaps all it proves is that God is a woman. But there's a better reason for believing Gillard is a genuine fiscal conservative: the revelation...

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