On the longest of our long weekends, it’s good to have something different to think about. Try this. Could it be that the information revolution – big tech, big data, the internet and social media – is changing how the economy works in ways we’ve yet to understand and won’t like?The world abounds with economists repeating their conventional wisdom about how the economy works and will keep on working. But one economist politician...
Friday, March 29, 2024
Wednesday, March 27, 2024
What a way to start Easter - a plan to smash the nest-egg
Most of us are too young to see it, but a big way the federal government affects our lives is through its system of compulsory superannuation. As you get older and retirement becomes a lot less distant, you begin to realise that the rules of super – and successive governments’ tinkering with those rules – will have a significant impact on the up to 30 years of your life after you stop working.When the age pension was introduced...
Monday, March 18, 2024
The budget is rent-seekers central
Last week we got a reminder that, among its many functions, the federal budget is the repository of all the successful rent-seeking by the nation’s many business and other special interest groups. Unfortunately, it added to the evidence that the Albanese government knows what it should do to manage the economy better, but lacks the courage to do more than a little.Rent-seeking involves industries and others lobbying the government...
Friday, March 15, 2024
How the digital world is getting better at measuring us up
These days we hear incessantly about “data”. The media is full of reports of new data about this or that, and there’s a new and growing occupation of data analysts and even data scientists. So, what is data, where does it come from, what are people doing with it, and why should I care?Google “data” and you find it’s “facts and statistics collected together for reference or analysis”. The advent of computers has allowed businesses...
Wednesday, March 13, 2024
Well-off baby boomers should pay more for their aged care
The report of the aged care taskforce, released on Tuesday, makes eminently sensible proposals for changes to cover the ever-growing cost of aged care. But since its solution is to require the well-off elderly to bear more of the cost, I doubt if Aged Care Minister Anika Wells will be able to implement the changes without much pushback from those well-off elderly – otherwise known as the “wealthy Boomers”.The cost of aged care...
Monday, March 11, 2024
Speech in the Great Hall of Sydney University
I’m too old to suffer from impostor syndrome, but the thought has occurred to me that, had the University of Sydney’s officials taken a look at my academic transcript at Newcastle University, and seen how much trouble I had persuading that uni to give me a pass degree, we’d be holding this gathering down at Ralph’s cafe in the women’s gym.The truth is that I had a lot of trouble passing a subject called economics, which I couldn’t...
RBA will decide how long the economy's slump lasts
The media are always setting “tests” that the government – or the opposition – must pass to stay on top of its game. But this year, it’s the Reserve Bank facing a big test: will it crash the economy in its efforts to get inflation down?There’s a trick, however: when the Reserve stuffs up, it doesn’t pay the price, the elected government does. This asymmetry is the downside of the modern fashion of allowing central banks to be...
Wednesday, March 6, 2024
Climate change is taking over the news - in case you hadn't noticed
I keep reading psychologists warning that talking about how terrible climate change will be is counterproductive. Rather than causing the deniers to see the error of their ways, it just makes them close their minds to further argument.So this column isn’t for them. Rather, it’s to speak to the rest of us – those who don’t try to tell the scientists they’ve got it all wrong – to review the latest evidence that climate change is...
Monday, March 4, 2024
Contrary to appearances, the stage 3 tax cuts will leave us worse off
It’s time we stopped kidding ourselves about the looming tax cuts. They’re what you get when neither of the two big parties is game to make real tax reforms, and the best they can do is lumber us with yet another failed attempt to wedge the other side.If you want real reform, vote for the minor parties, which may be able to use their bargaining power in the Senate to get something sensible put through.The stage 3 tax cuts always...
Friday, March 1, 2024
Good news: our falling productivity is too bad to be true
There are few aspects of the economy on which more bulldust is spoken than our productivity. The world abounds with people trying to tell us that our productivity performance is a real worry and the way to fix it is to cut their taxes or give them a government handout. Yeah, sure.These snake oil salesmen (and they’re almost always men) have been having a field day lately. Did you know that last financial year, 2022-23, the productivity...
Wednesday, February 28, 2024
Paying for the cowpat sandwich Morrison handed Albo
It never pays to be too sorry for politicians. They’re all volunteers, they’re well paid for what they do, and even the nicest of them have thrust themselves ahead of many others to get as far as they have.But I can’t help feeling a bit sorry for Anthony Albanese. He got himself elected by promising not to change much, but I doubt he expected to be handed quite such a cowpat sandwich from the smirking Scott Morrison.As part of...
Monday, February 26, 2024
Two-class school system a great way to entrench low productivity
In 2011, the Gonski report recommended that government funding of schools be needs-based and sector-blind. More than 12 years later, it still hasn’t happened. And it’s by no means certain it will happen any time soon.The idea of sector-blind schooling – funding all students according to their needs, rather than their religion – fell at the first hurdle. Sectarianism has bedevilled attempts to ensure all our kids get a decent...
Friday, February 23, 2024
How top earners kid themselves (and us) they're overtaxed
Apparently, the nation’s chief executives and other top people are groaning under the weight of the tax they pay. Is it any wonder they’re doing such an ordinary job of running the country’s big businesses? When you see what’s left of their pay after tax, it’s a wonder they bother turning up.I know this will shock you – just as it does every time the business media remind their readers of it. According to the latest available...
Wednesday, February 21, 2024
Why fixing negative gearing would be a positive for our kids
Life wasn’t meant to be easy for our politicians – which is as it should be. Poor old Anthony Albanese. No sooner has he got away with breaking his promise on the stage 3 tax cuts than he’s besieged by people demanding more tax reform.Trouble is, they all want different things, and every one of them could cost him votes as fat cats who stand to lose some tax break join forces with the opposition to run a great scare campaign,...
Monday, February 19, 2024
Lest we forget the unknown public servant, working to inform us
Have you ever wondered how much taxpayers’ money is wasted by our politicians and public servants? Do you hope that every dollar governments spend is fully accounted for?And would you like it to be made public not just how much was spent on public servants’ wages, rent, grants, paperclips and other administrative expenses, but how much was being spent on each of the individual programs within education, health, police, courts,...
Friday, February 16, 2024
We can't escape a carbon tax, which is good news, not bad
When economists are at their best, they speak truth to power. And that’s just what two of our best economists, Professor Ross Garnaut and Rod Sims, did this week. In their own polite way, they spoke out against the blatant self-interest of our (largely foreign-owned) fossil fuel industry.They sought to counter the decade of damage done by the former federal Liberal government which, for short-sighted political gain, engaged in...
Wednesday, February 14, 2024
Want better productivity? Start by ensuring our kids can read
The trouble with our economy is that there are so many things needing to be fixed, it’s hard to know where to start. And so many of them are urgent we don’t have time to fix things one at a time. But since the economy consists simply of all the workers and all the consumers – that is, all the people – one of my guiding principles is that governments should manage the economy for the many, not the few.This may seem obvious but,...
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