A PROGRESSIVE AGENDA FOR TACKLING AUSTRALIA’S PRODUCTIVITY CRISIS
Inside Story, 29 July 2019
At the start of June, the Productivity Commission quietly dropped a bombshell. Australia’s productivity growth had basically stalled. Labour productivity — output per hour worked — was more or less flatlining. After a generation in which labour productivity had grown at almost 2 per cent a year, it had tumbled to just 0.2 per cent.
The commission called the results “mediocre” and “troubling,” but for some sectors they were downright appalling. In farming, mining, construction, transport and retail, labour productivity went backwards. In other words, workers in those sectors were producing less per hour than they had the year before. The latest numbers continued a trend of weakening productivity growth that the commission dates back to 2013.Read more
WHY YOU SHOULD TAKE A WALK ON THE WISE SIDE
Review of Jono Lineen, Perfect Motion: How Walking Makes Us Wiser
Sydney Morning Herald, 20 July 2019
Around the world, many people use fitness trackers to target 10,000 steps a day. The goal has its origins in the 1960s, when a Japanese company marketed a pedometer called a manpo-kei, which translates as ‘10,000-step meter’. There isn’t much science behind the number: a study this year found that you get about as much health benefit from 7,500 daily steps.
Walking isn’t just good for the body – it nurtures the soul. Wordsworth, Thoreau, Austen, Aristotle and Brahms are among the many creatives who have found that the muse comes to them when strolling. Religious pilgrimages are about the journey as much as the destination. Stride through a big city and you see things you’d never notice from a car window. Can anyone say that they truly understand Australia if they haven’t gotten lost in the bush?Read more
REMEMBERING CANBERRA'S SPACE LEGACY
The Canberra Times, 15 July 2019
Every baby boomer recalls where they were when they first heard Neil Armstrong say ‘That’s one small step for man, one giant leap for mankind’ (or the more poetic words that preceded them, ‘Tranquility base - the eagle has landed’).
Too few people know the crucial role that Canberra played in communicating those words to millions of people around the world.
As we celebrate the 50th anniversary of the Apollo 11 moon landings this month, it’s worth honouring the role that the Australian tracking stations played in that momentous event. There were four tracking stations across Australia – Honeysuckle Creek and Tidbinbilla in the ACT, Parkes in NSW and Carnarvon in Western Australia. Together, they played a pivotal role in relaying sound and images from space back to NASA.
While Parkes starred in the movie, it was Honeysuckle Creek and its 26 metre antenna dish that received and relayed the first images of Neil Armstrong walking on the moon to 600 million people on Earth.Read more
Small-l liberals such as George Brandis, Christopher Pyne and Malcolm Turnbull are out. It is little surprise that genuine liberals such as John Hewson spend more time criticising than praising the party they once led. The Liberal Party of Australia is now a LINO party: Liberal In Name Only. It’s a fitting acronym. After all, lino was Australia’s favourite floor covering in the 1950s.
REAGAN'S TOP ECONOMIC ADVISER DIES
Australian Financial Review, 12 June 2019
A mark of a great policy economist is their willingness to stick to good science, even where it disagrees with their preferred side of politics. American economist Martin Feldstein, who died this week at the age of 79, was such a person.
From 1982 to 1984, Feldstein served as the chairman of the Council of Economic Advisers, which effectively made him Ronald Reagan’s top economic adviser. While Reagan oversaw a massive increase in government debt, Feldstein urged balanced budgets. At a time when many in the Reagan administration were willing to let deficits balloon, Feldstein recognised that there are only two ways to pay for government spending: taxes now or taxes later.
I first met Marty, as he was generally known, as a student in a small graduate class on public finance in the early-2000s. His love of teaching was legendary, and he had for many years taught Economics 10, Harvard’s signature undergraduate class on economics. Among graduate students, Marty focused special attention on areas where he had published journal articles (he wrote more than 300) or op-eds (which he produced prolifically).Read more
BABYSITTERS, CARS AND ECONOMIC GROWTH
Crikey, 7 May 2019
Ever struggled to find a reliable babysitter? Some years ago, a group of American parents reckoned they found the solution. They created a voucher system. The rules were simple: If you babysat someone else’s kids, they give you one of their vouchers. If someone else babysat your kids, you gave them one of your vouchers. The system ensured everyone was doing their fair share of babysitting. A perennial problem of parenthood had been solved.
Or so they thought. Problems arose when some couples in the group started to hoard their vouchers, worried they might need babysitters more frequently in the future. As the flow of vouchers slowed, other couples panicked and started hoarding vouchers themselves. The result was textbook economics. The babysitting cooperative went into recession.
These parents discovered a core tenet of macroeconomics: that my spending is your income and vice-versa. When some parents stopped spending their vouchers, they robbed other parents of the opportunity to earn vouchers. Those other parents, in turn, spent fewer of their vouchers. And so on.Read more
TAX PIRATES: ACTION PACKED DRAMA NOW SHOWING IN REAL LIFE
The Canberra Times, 4 May 2019
It is common for forms of serial fiction such as comic books, or film or television franchises, to have a new start of that universe – often called a ‘reboot’. The one I’m encouraging is Tax Pirates of the Caribbean. In this action-packed drama, a buccaneering team of tax specialists travel to Jamaica.
Armed with their rapier wit and a brilliant knowledge of the tax code, they confront multinational firms, headquartered in nearby tax havens, who’ve been luring away the revenue that should be supporting Jamaica’s schools and hospitals.
The script should be easy to write, since the events are playing out right now. The Jamaican tax authority has ‘borrowed’ a bunch of expert tax auditors from Germany. The accountant equivalent of Captain Jack Sparrow is German auditor Steffan Scholze, who said he ‘jumped at the opportunity to … fight inequalities and give countries added confidence in their dealings with large taxpayers’. Within weeks, he was helping Jamaica take on multinationals who’d refused to pay their fair share of tax.Read more
The sensible centre: Finding the right path for taxes, wages, and climate policy - Op Ed, APPS Policy Forum
THE SENSIBLE CENTRE: FINDING THE RIGHT PATH FOR TAXES, WAGES, AND CLIMATE POLICY
APPS Policy Forum, 24 April 2019
In March, journalist David Speers asked senior Liberal Party frontbencher Linda Reynolds, “Do you agree that flexibility in wages and keeping wages at modest levels is a deliberate feature of our economic architecture?” A reasonable question.
“No, absolutely not,” replied Reynolds. “For Bill Shorten to even suggest that –”
“I’m quoting Mathias Cormann,” Speers pointed out.
It was a telling moment for the Coalition. Their economic message was so out of touch with reality that it had become a caricature of itself. Even one of their senior figures couldn’t tell the difference between actual Coalition policy and what she thought was an absurd exaggeration. It didn’t need a scare campaign – the policy was a horror show all of its own.Read more
TALE OF TWO: COMPARE THE FIGURES
Daily Examiner, 4 April 2019
Susan is a primary school teacher, earning $67,000 a year. She pays $13,000 in tax. Susan would like to buy a home one day, but she’s struggled to break in to the property market. She doesn’t receive any government benefits, which she doesn’t complain about, given that she’s got a full-time job. Her main possession is a used car.
And then there’s John, a retired shareholder. When he was employed, he worked hard and saved frugally. He bought his home in the 1970s, when the average home cost about twice the average household income (today, homes cost about five times average income). John has all his investments in his share portfolio, which returns him $67,000 a year in income. On top of this, the Australian Government sends him a cheque for almost $29,000.
Is this fair? John’s cheque is a cash refund for excess franking credits, representing tax paid by the companies whose shares he owns. Because he doesn’t receive a government pension or allowance, Labor proposes to end this payment.Read more
A RANDOMISED ROUTE TO BETTER GOVERNMENT
The Canberra Times, 2 April 2019.
In the mid-1990s, researchers embarked on a massive clinical trial. Over 16,000 post-menopausal women volunteered to be randomly assigned to a treatment group, receiving hormone replacement therapy, or to a control group. Many had expected that the study would back the common view – basedon observational studies – that taking Estrogen plus Progestin was good for the health of these women.
Five years in, the trial’s data and safety monitoring board stopped the study. Not only did the research show no protective impact of hormone replacement therapy, but it those receiving the treatment were significantly more likely to have health problems. When the results were published in the Journal of the American Medical Association in 2002, they had a seismic impact. Millions of women worldwide were taking the supplements. Thousands of GPs had to tell their patients: ‘sorry, we were wrong’. Better evidence bruised a few egos, but it also saved lives.Read more