AUSTRALIA'S UNEMPLOYMENT CRISIS
Crikey, 2 August 2019
In 1932, at the peak of the Great Depression, Australia’s unemployment rate hit 20 percent. Today, that’s about the unemployment rate in Fairfield, where around one in five people who want a job can’t find one.
When we hear about unemployment, the picture too often focuses on the national rate, currently 5.2 per cent. This hasn’t changed much over recent years, so it’s easy to miss the fact that other countries are doing much better. When she visited Australia, Jacinda Ardern was polite enough not to mention that New Zealand’s country’s unemployment rate is around 4 per cent. That’s also the rate in Britain and the United States. Countries that underperformed Australia during the Global Financial Crisis are now outperforming us – and by a significant margin.
But when we look across regions, it becomes clear that averages can conceal as much as they reveal. Fairfield’s unemployment rate may be the worst in NSW, but it isn’t the worst in Australia. In Victoria, unemployment in the Geelong suburb of Norlane is 22 per cent. In Queensland’s Logan Central and the Hobart suburb of Gagebrook, unemployment is 28 per cent. In South Australia’s Elizabeth and Western Australia’s Halls Creek, it’s 34 per cent. On Palm Island and the Torres Strait Islands, unemployment is 46 per cent.Read more
HOUSE OF REPRESENTATIVES, 1 AUGUST 2019
Twenty years ago, David Dunning and Justin Kruger published a seminal study showing that incompetent people are peculiarly unaware of their own incompetence. They drew on the example of McArthur Wheeler who, starting from the premise that lemon juice can be used as invisible ink, covered his face with lemon juice and went in to rob his local bank, thinking it would make him invisible.
The Dunning-Kruger effect could have been designed for this frontbench. We have a Minister for Health who gives an MRI licence to the vice-president of the South Australian Liberal Party and says no to 443 other applications. We have a Minister for Families who pats herself on the back for the ‘generous amount of money’ that pensioners get. We have an Assistant Minister for Homelessness who wants to put a ‘positive spin’ on homelessness, rather than doing anything about the problem. We have an Assistant Treasurer who knows nothing about tax havens, yet persists with the mistruth that we on this side of the House voted against the multinational anti-avoidance law. We have a Minister for Energy who won't admit that emissions are up.Read more
TACKLING INEQUALITY MEANS CRACKING DOWN ON TAX HAVENS
One of the world’s most reputable not-for-profit groups is urging the Coalition to crack down on tax havens, saying Australia is “falling far behind” on tax transparency.
New research released by Oxfam today estimates that governments around the world are losing $190 billion a year in tax revenue as multinational tax avoiders conceal funds.
An estimated $15 billion is being ripped away from the African continent, home to half of the world’s people living in extreme poverty. While billions of dollars is being hidden from their governments, 40 per cent of the people living in sub-Saharan Africa still don’t have access to clean drinking water.Read more
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