The trouble with the Reserve Bank's continuing cuts in the official interest rate – this week to another record low, of 1.5 per cent – is that it could leave people thinking the economy's in bad shape.
It isn't. As Reserve governor Glenn Stevens was at pains to point out, recent figures suggest that "overall [economic] growth is continuing at a moderate pace" notwithstanding a very large decline in investment in new mines and...
Saturday, August 6, 2016
Wednesday, August 3, 2016
Fast-moving China is big and bold; we think small and fearful
Sorry if I sound wide-eyed, but I was mightily impressed when I visited China as a guest of the Australia-China Relations Institute. Obviously, we were directed to the best rather than the worst but, even allowing for that, it was still impressive. Those guys are going places.
In a hurry. I was struck by how fast-moving the place is – in several senses. We argue interminably about getting a high-speed rail link, while the Chinese...
Monday, August 1, 2016
China plans big expansion of trade - without us
You've heard of belt and braces. You may even have heard of one country, two systems. But have you heard of One Belt, One Road? No, I thought not. Rest assured, you will.
It's a topic much discussed in business and economic circles in China, as I learnt on a visit there sponsored by the Australia-China Relations Institute at the University of Technology, Sydney.
It's a plan for the establishment of a new Silk Road between Europe...
Saturday, July 30, 2016
China does its own thing in its own way
On the prospects for China's economy, it's easy to be wrong. We analyse unfamiliar things by comparing them with things we understand, but in its massive size and economic history, China is one of a kind.
That's one conclusion I've drawn from a visit to China as a guest of the Australia-China Relations Institute, at the University of Technology, Sydney, and the All-China Journalists Association.
In recent years people in the...
Monday, July 18, 2016
Liberals ignore the moderate middle at their peril
It's amazing to realise that the greatest threat to the success of the Turnbull government comes from the Liberal Party. Malcolm Turnbull's biggest enemies are inside his own government, not outside.
If he's to make sufficient progress with controlling the budget and reforming the economy to warrant re-election in three years' time, he needs to mix budget restraint with fairness, and combine efficiency with equity.
This, after...
Saturday, July 16, 2016
Government outsourcing has many pitfalls
Labor's Mediscare will have a benefit if it causes our politicians to think twice before they resort to "outsourcing" or "contracting out" the provision of government services, a practice that's led to a string of disasters.
The pretext for Labor's claim that the Coalition was planning to "privatise" Medicare was the Turnbull government's intention to save a little money by shifting the processing of Medicare's many bank transfers...
Thursday, July 14, 2016
A SLIGHTLY DEFENSIVE CRITIQUE OF AUSTRALIAN ECONOMIC JOURNALISM
History of Economic Thought Society of Australia, annual conference, Melbourne, July 14, 2016It’s a huge pleasure to speak at conference where passing remarks about your predecessors and competitors is not seen as a self-indulgent irrelevance. I’m going to leave it to Gerard to talk about two key pioneers of economic journalism in this country - Jack Horsfall and Max Newton - and say a little about the early, current and future...
Wednesday, July 13, 2016
Election result need not be a setback for good government
Maybe those who complain about a boring election campaign are condemned to an exciting election finish. Many in the establishment – particularly the business establishment – have convinced themselves the country is off to hell in a handcart, but it doesn't have to be like that.
The nation won't be ungovernable provided Malcolm Turnbull is willing to negotiate with the minor parties when necessary – hardly a new experience for...
Monday, July 11, 2016
Oh no, not a credit rating downgrade
Sorry, but I've put Standard and Poor's and the two other big American credit rating agencies on a negative watch.
For me, the rating agencies' involvement in the global financial crisis has destroyed their credibility forever. I can no longer take their solemn pronouncements seriously, nor hear them with the reverence or contrition they imagine themselves entitled to.
The rating agencies were one of the private sector institutions...
Saturday, July 9, 2016
Workforce participation a key for Turnbull's new plan
Now it's likely the Turnbull government will scrape back to office, what's next? What will it do to improve our economic prospects?
Malcolm Turnbull went to the election offering a "national plan for jobs and growth" that was supposed to secure our future.
Trouble is, it now looks unlikely he'll be able to implement the centrepiece of that plan, the phased reduction over 10 years of the rate of company tax, from 30 per cent...
Wednesday, July 6, 2016
Who really wins from Mediscare
The success of Labor's "Mediscare" in this election is worrying - but not for the reason you may imagine. Its greatest effect may be to fatten the incomes of medical specialists and corporate medical suppliers.
Scare campaigns are often effective politically, but they can impose a high price on the country's good government.
Tony Abbott's highly successful scare about depredations of the carbon tax at the last election has...
Monday, July 4, 2016
Voters reject economics as usual
Assuming the government scrapes back in, this surprisingly poor election result for the Coalition carries hard lessons for politicians and those who seek to influence the policies they pursue: business people, economists and econocrats.
In this election economic issues dominated, and those hard lessons are about economic management and economic reform: what voters will let you do and what they won't.
It was a fight between...
Saturday, July 2, 2016
ECONOMIC JUSTICE
Talk to Salvation Army Moral and Social Issues Council National Conference, Melbourne, July 2, 2016I spent the first 25 years of my life imbibing the Christian beliefs and social values of Salvationists, and the rest of my life learning - and later critiquing - the principles of conventional, “neo-classical” economics, particularly as it is practiced in the Australian political debate. So I see my role this morning as acting...
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