Australia's future to be made under Treasury's watchful eye

The Albanese government’s Future Made in Australia has had a rapturous reception from some, but a suspicious reception from others (including me). In a little-noticed speech last week, however, one of our former top econocrats gave the plan a tick.Rod Sims, former chair of the Australian Competition and Consumer Commission, and now chair of Professor Ross Garnaut’s brainchild, the Superpower Institute, has been reassured by the...

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THE BUDGET, INFLATION & UNEMPLOYMENT

UBS HSC Economics Day, May 29, 2024I want to talk to you today about the federal budget two weeks ago and how it relates to the two key issues the managers of the economy need to keep under control: inflation and unemployment. Right now, inflation is still at the top of our worry list, but we shouldn’t forget that we’ve been doing exceptionally well on unemployment, and it’s important we do what we can to avoid fixing inflation...

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The pollies have twigged that our crazy housing game can't go on

Last week, a fairly ordinary place in our street, similar to ours, sold for $4.7 million. I suppose I should be congratulating myself on how well I’ve done in the capitalist game. And it’s only fair since I’ve “worked hard all my life”. In truth, all we’ve done is pay the exorbitant price of $180,000 for our place, then hung around for 40 years. This makes sense? Surely, this crazy game can’t keep going onward and upward forever.It’s...

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Politicians don't control migrant numbers, and usually don't want to

Suddenly, everyone’s talking about high migration and the way it’s disrupting the economy. Why is the government letting in so many people, and why hasn’t it turned off the tap?Short answer: because, the way we run immigration, it has little control over the tap.But, at times like this, that’s not something either side of politics wants to admit. The truth is, they could exercise more control over immigration, but neither side...

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INFLATION, TAX & THE COST OF LIVING

May 2024The economy has been going through huge ups and downs since COVID arrived in early 2020. Since most of you weren’t taking a great deal of notice of the economy that long ago, let me give you a quick summary. To slow the spread of the virus while a vaccine was being developed, governments locked the economy down, getting as many people as possible to work from home, closing schools and many shops, and telling people to...

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Treasury tells all: how the housing market is so stuffed up

Would you believe that our ever-rising house prices are a sign there’s something badly wrong with our housing market? Would you believe our housing arrangements are worse than in the other rich countries?Well, I would when that’s what Treasury is admitting in the annual sermon it tacks onto the budget papers. This year it’s about meeting our housing “challenge”.In a well-functioning economy, its industries can respond to the...

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We need to talk (sense) about immigration

It’s a safe bet there’ll be much talk about immigration between now and the next federal election, due this time next year. Peter Dutton has seen to that. Trouble is, much of it will just be hot air, much of it will be misleading and much will reflect the vested interests of the person doing the talking.And some of it will reveal us at our worst: our tendency to blame incomers for all our ills. The more ignorant among us will...

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How the budget was hijacked by a $300 cherry on the top

Talk about small things amusing small minds. It looked like a textbook-perfect exercise in budget media management by Anthony Albanese’s spin doctors. Until it blew up in the boss’s face. Trouble is, it wasn’t just the tabloid minds that got side-tracked. So did the supposed financial experts.Budget nights are highly stage-managed affairs, as the spinners ensure all the mainstream media are focused on the bit the boss has decided...

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Budget's message: maybe we'll pull off the softest of soft landings

When normal people think about the economy, most think about the trouble they’re having with the cost of living. But when economists think about it, what surprises them is how well the economy’s travelling.It’s been going through huge ups and downs since COVID arrived in early 2020. By 2022, it was booming and the rate of unemployment had fallen to 3.5 per cent, its lowest in almost 50 years. Meaning we’d returned to full employment...

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Budget will make us better off now, but worse off later

It’s said you can tell a government’s true priorities from what it does in its budget. If so, the top priority of Anthony Albanese’s government is not to have any priorities.Rather than focusing on fixing the most pressing of our many problems, his preference is to be seen doing a little to alleviate all of them. In this budget, (almost) every voter wins a prize.Certainly, every powerful interest group gets something to placate...

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Labor's persistent refusal to fix the JobSeeker payment is shameful

Remarks by Treasurer Jim Chalmers seem to say there’ll be no one-off increase in the pitifully inadequate rate of unemployment benefits in Tuesday night’s budget. If this is wrong, I’ll be delighted to offer an abject apology. If it’s right, Anthony Albanese and his ministers should hang their heads in shame. They claim to be the good guys, but they aren’t.And the unions – which, as recent changes in industry policy reveal, have...

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