OBSERVATIONS ON MACRO MANAGEMENT

Talk to Economic Society, Victorian branch, Wednesday, September 9, 2015I want to draw on a few themes from my new book, Gittins: A life among budgets, bulldust and bastardry, particularly some observations about macro management, recessions and, what I consider to be my special subject, the politics of economics.Don Stammer, the veteran business economist, says you need to have seen four recessions before you’re fully qualified....

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Depressed economists lose faith in capitalism

The nation's practicing economists are working themselves into a state over the future of the economy, convincing themselves the prospects for growth are dismal and the only answer is more "reform". They're being rallied by former Treasury secretary Dr Martin Parkinson. He told the National Reform Summit that Australia risked sacrificing as much as 5 percentage points of economic growth over the next 10 years, the equivalent...

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Contrary to reports, economy battles on

Joe Hockey is right. The economic news is hardly wonderful, but the media's attempt this week to convince us the economy was perilously close to recession was sensationalist nonsense. What set them off was news from the Australian Bureau of Statistics' national accounts that real gross domestic product grew by just 0.2 per cent in the June quarter. What they forgot to mention was that in the previous quarter it had grown by...

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The game pollies play rather than governing

It came to me while I was lying awake the other night: the business, union and community worthies at last week's National Reform Summit thought the way to make progress was to hammer out a compromise proposal most people could agree to. You hand it to the government, the opposition agrees, they whack it through parliament and problem solved. But that's not the game Tony Abbott is playing. He doesn't want agreement, he wants...

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How high-paid men have hijacked tax reform

It's difficult to get a man to understand something when his after-tax salary depends on him not understanding it, to misquote Upton Sinclair. This may explain why there's a glaring weakness in the thinking of business people, economists and politicians who see countering bracket creep and cutting the top tax rate as the key "reforms" needed to "reward hard work" and increase participation in the labour force. Joe Hockey's...

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Try a little compromise to fix the budget

It was easy to miss, but a proposal with much practical potential arose from this week's meeting of the great and good at the National Reform Summit. It was an idea that could break the budget impasse. Australia is seen to have so many economic problems at present that the participants at the summit from business, union and community peak bodies got to four of them before later remembering one I would have had at the top of...

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Talk to VCTA Teachers Day, Melbourne,

Talk to VCTA Teachers Day, Melbourne, Friday, August 28, 2015Since it’s an important part of the course, I thought it might be useful if I give you an update on recent facts, figures and trends in the key indicators of what’s happening in the labour market, to help you keep up-to-date. I’ll be relying heavily on an article by professors Roger Wilkins and Mark Wooden, both of the Melbourne Institute, Two Decades of Change: The...

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Don't believe all you're told about bracket creep

Beware of treasurers promising to protect you from the ravages of bracket creep. They're like Mafia bosses promising to protect you from robbers and thieves. Maybe they're offering something nice, or maybe they're working some kind of con. Joe Hockey's speech about tax reform on Monday was more an advert than a policy announcement. He said the government would have to do something about the evil of bracket creep, but didn't...

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Libs deserve share of reform credit

I am a career-long admirer of Paul Keating. He opened our economy to the world, dragging us into the era of globalisation. Of the 13 treasurers I've observed in my career, I judge him to be far and away the best – though he did have his failings. But last week Keating came out fighting when John Howard argued that the Coalition opposition of the time also deserved praise "because it gave bipartisan support to so many of [Keating's]...

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