What if I told you the true expected budget balance for next financial year wasn't the much trumpeted surplus of $1.5 billion but a carefully buried deficit of $8.7 billion?
I'd be justified in making such a statement because that deficit figure is officially known as the "headline cash balance" and, as a journalist, I'm in the headline business.
I'd also be justified in drawing it to your attention because the government in...
Monday, May 21, 2012
Saturday, May 19, 2012
Macro 'policy mix' returns to normal
In case you missed it, the secretary to the Treasury has spelt it out: with the budget's planned return to surplus next financial year, fiscal policy is being put back in the cupboard and the "policy mix" returned to normal.
Delivering his annual post-budget speech to the Australian Business Economists, Martin Parkinson outlined the "macro-economic framework" - the respective roles of fiscal policy (the manipulation of government...
Wednesday, May 16, 2012
Why a little more redistribution is justified
So, has the budget led to an outbreak of class warfare? Only if Julia Gillard's a lot luckier than she's been so far. That is, I doubt it. What I don't doubt is that her disparaging remark about the north shore was a calculated attempt to get a bit of class consciousness going to accompany her give-and-take budget.
But loyalty to parties on the basis of class is long gone. These days people's vote is as likely to be guided by...
Monday, May 14, 2012
Swan's innovation: the budget as bulldozer
A closer look at the budget papers reveals just how contrived the budget's return to surplus is. Wayne Swan is hardly the first treasurer to resort to "reprofiling" (a word his people invented), but he's the first to use it on such a massive scale, turning the budget into a bulldozer.
Reprofiling means changing the previously announced timing of budget spending or taxation measures. Deciding not to proceed with previously promised...
Environmental accounting: completing the picture
Dinner Talk to ABS Conference on Environmental Accounting, Melbourne, Thursday, May 14, 2012
Ross Gittins, Economics Editor, The Sydney Morning Herald
I’m pleased to be invited to speak to this dinner of a conference convened by the nation’s official bean-counters. I don’t use that term disparagingly. Some people may think they’re far too talented or too important to waste time counting the beans, but I’m not one of them. If...
Saturday, May 12, 2012
Why the budget isn't as contractionary as it looks
If you take the figures at face value, this week's budget is deeply contractionary, delivering a blow to demand at a time when parts of the economy aren't at all strong. But in economics, it's rarely wise to take things at face value.
There are different ways to assess the "stance" of fiscal policy - to work out the direction and size of the effect a budget will have on the economy. Settle back.
There's a two-way relationship...
Wednesday, May 9, 2012
How Swan did his budget trick
If you are having trouble seeing the horror budget we were told to expect, that's according to plan. This government has always wanted to be tough in principle, but never in practice.
For most people, Wayne Swan's fifth effort doesn't contain much that is nasty and includes a few things that are quite nice.
To be sure, it does include some nasties for higher income earners. Individuals earning more than $300,000 a year will...
Monday, May 7, 2012
Reserve steals Swan’s budget forecasts thunder
While normal people are awaiting tomorrow night's federal budget to see if the measures Wayne Swan announces are naughty or nice, misguided souls in business and the financial markets are more interested in knowing Treasury's forecasts for the economy in 2012-13.
Well, wait no more. This year the key forecast for year-average growth in real gross domestic product in 2012-13 is the budget's worst kept secret.
It's taking the...
Saturday, May 5, 2012
Pre-budget primer: how pollies fudge the figures
When governments discover their self-imposed budget targets are harder to achieve than they expected, they face an almost irresistible temptation to cover the gap with a little creative accounting.
As we wait to see on Tuesday night the herculean efforts the Gillard government has made to keep its promise to achieve a budget surplus in 2012-13, let's review some of the tricks governments get up to when they find themselves in...
Wednesday, May 2, 2012
Truth is almost always in the middle
I like Americans. I have American friends, and I remember a trivial incident that endeared me to Americans forever. We were in a funicular going up one of the hills surrounding Lake Como in Italy, at close quarters with a group of Yanks. They were joking and teasing each other in a way that struck my contact-deprived mind as very Australian.
But thanks to a great American institution, the Pew Research Centre, I now realise I...
Monday, April 9, 2012
What Jesus said about capitalism
Most churchgoers see no great conflict between their beliefs and life in a market economy such as ours. But proponents of the little-known "sabbath economics" argue Christ's teachings have been reinterpreted over the centuries to make them fit with modern capitalism.
All I know about sabbath economics comes from the little book, The Biblical Vision of Sabbath Economics, by the Californian theologian and teacher Ched Myers. I'll...
Saturday, April 7, 2012
How to improve investment advice to retirees
They say that at every stage of life the baby boomers reach, the world changes to accommodate their needs. So now the boomers are starting to reach retirement, it's the investment advisers' turn to lift their game.
To date, the superannuation industry's greatest attention has been paid to the accumulation phase: how much people need to save to ensure an adequate income in retirement. But the boomers' interest is switching to...
Wednesday, April 4, 2012
How business is white-anting the weekend
Whether or not they realise what they're doing, Australia's business people, economists and politicians are in the process of dismantling the weekend and phasing out public holidays. And they're doing it in the name of making us better off.
Historically, the two arrangements that have protected the weekend and public holidays from encroachment by employers are state government restrictions on trading hours and the requirement...
Monday, April 2, 2012
Let's slow down the mining boom
Innovative thinking is not only in short supply in Australia's businesses - as our weak productivity performance attests - it's also hard to find in the economic debate.
You could count on one hand the economists who do some lateral thinking and throw into the debate some new way of viewing a problem and overcoming the familiar difficulties.
But one economist who does come up with new ideas to think about is Dr Richard Denniss,...
Saturday, March 31, 2012
We risk letting lawyers stifle innovation
If our business people, economists and politicians are genuine in their desire to lift our productivity, rather than just moan about the Fair Work Act, they'll put reform of the regulation of intellectual property high on their to-do list.
Unfortunately, the minor changes to intellectual property regulation put through Parliament last week, to the accompaniment of great self-congratulation by the Gillard government, suggest...
Subscribe to:
Posts (Atom)