It's official: the labour market is different

Any report that the hardline commentators brand as "mushy drivel" can't be all bad. And, indeed, the Productivity Commissions' draft report on the Workplace Relations Framework is far more enlightened, balanced and sensible than we've come to expect from that highly model-bound institution. For several years, militant employer groups and the national dailies have been claiming that Julia Gillard's Fair Work Act reregulated the...

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Digital disruption: more pros than cons

Do you get the feeling we've got a government that's worrying about everything except getting on with governing? One issue that's not getting the attention it deserves is the rise of "digital disruption". The pace at which the continuing revolution in information and communications technology is reshaping industries and occupations is remarkable. As the consultants Deloitte Access Economics wrote in a report for Google, just...

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Mainstream economics remains highly useful

When Gigi Foster gave a radical speech to the Economic Society in Sydney last week – which soon had the audience interjecting and arguing among itself – she was careful to begin by saying her goal was to add to the standard economic model, not replace it. She claimed the economists' model was the most successful model in all of social science, then listed what she considered to be its four most useful contributions. By rights...

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Uni economics declines at hands of accountants

If you think economists have too much influence in the halls of power - or that Australia would be better off if its accountants and business people knew less about how the economy works - or that the political debate would be improved if fewer citizens were economically literate - I have good news: academically, the economists are being cut down to size. And it's the accountants who are doing it. While business and management...

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BANKING AND FINANCE IN AN UNCERTAIN FUTURE

Talk to dinner guests of Hall & Wilcox, lawyers, in association with the Wheeler Centre, Melbourne - Wednesday, July 29, 2015 in Sydney & Tuesday, August 4, 2015 in MelbourneI’ve been invited to talk to you about the future of banking and finance which, being a journalist, I’m more than happy to do. As a great newspaper owner from the Victorian era, Lord Northcliffe, once said, journalism is a profession whose business...

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Job insecurity isn't as great as you imagine

As everyone knows, the world of work just gets tougher. For a start there's the ever-growing incidence of "precarious employment" – people in casual jobs, or on short-term contracts, or working for labour-hire companies or temping agencies, or being cast adrift by their employer without benefits as supposedly self-employed. If you do have one of the ever-scarcer full-time, permanent jobs, you're probably working a lot longer...

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Why the economy's slow growth may last

The biggest economic story last week wasn't all the wishful thinking about raising the goods and services tax, it was Reserve Bank governor Glenn Stevens' warning that the economy's "potential" rate of growth may be lower than we've assumed. Predictably, those commentators who did see the significance of this news were too busy putting their own spin on it to make sure what Stevens' said was widely taken in. So let me have a...

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We're not doing too badly on productivity

Rummaging through the media's rubbish bins this week, I happened upon some good news. According to the Productivity Commission's annual update, the productivity of labour improved by 1.4 per cent in 2013-14. And get this: in the 12-industry "market sector" of the economy, it improved by 2.5 per cent in that year and by 3.7 per cent the year before. To give you an idea, the 40-year average rate of market-sector productivity...

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Everyone wants a slice of a higher GST

Norman Lindsay called it the Magic Pudding. Economists call it opportunity cost. In the untiring campaign by some for an increase in the goods and services tax, a new magic pudding has been created. The trouble is, opportunity cost is real, but magic puddings aren't. Put at its simplest, the concept of opportunity cost says that if you've got a dollar, you can only spend it once. This truth might be glaringly apparent, but it's...

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Tax reform push doesn’t add up

For once the Business Council has said something those who don't champion the interests of big business can agree with. We have indeed reached a new low in the nation's political leadership. The council's president, Catherine Livingstone, said last week that "at a time of great economic uncertainty, Australia needs and deserves strong leadership, and the opportunity to discuss reform options as a community". "Our political...

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All we should be doing to protect land and water

You get the feeling Tony Abbott doesn't lie awake at night worrying about what our economic activity is doing to our natural environment. In which case, those of us who do care about ecological sustainability – including many Coalition voters and, in all probability, Abbott's successor, whether Liberal or Labor – will have a lot of catching up to do. This looks like being true of our excessive contribution to global greenhouse...

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Increase property tax, not the GST

Let me tell you something neither side of politics will: we'll be paying a lot higher taxes over the next decade than we are today. And don't think you could have up to 10 years before that prediction comes to pass – it's already started. It's happening because of bracket creep. This year's budget says the present intention is to let inflation push people into higher tax brackets for another five years before our next tax cut...

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Lower dollar boosts services exports

Did you know that when the value of our dollar falls, imports become dearer? When the Business Bible learnt this last week, it got so excited it led the paper with the news. Every smarty knows that the economic turmoil in Greece and China must spell bad news for us, so when the turmoil caused the Aussie dollar to fall below US75¢, this was obviously the start of the badness. Apparently, it means the "global purchasing power"...

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