A PRODUCTIVITY TURNAROUND REQUIRES A MORE DYNAMIC, COMPETITIVE ECONOMY
The Australian, 26 August 2022
Productivity growth is the key driver of living standards over the long run. Yet over recent decades, productivity growth has slowed from a canter to a saunter. Slower productivity growth means lower real wages and less buying power for households. It constrains the ability of the budget to build infrastructure and help poor people here and overseas. Whether your priority is paying down debt or boosting teacher quality, Australians should be worried about the drop in productivity.
In a recent analysis, I worked with experts at the Australian Treasury to analyse data on productivity and economic dynamism. With access to data on millions of businesses and workers, Treasury now has an unprecedented ability to study the health of the economy. Although these datasets have been constructed relatively recently, some go back nearly to the start of the century – allowing powerful insights into how the Australian economy has changed over time.Read more
KEEPING TABS ON PRICES HAS NEVER BEEN MORE IMPORTANT
The Canberra Times, 18 August 2022
Twelve dollars for an iceberg lettuce. Eleven dollars for a punnet of strawberries. Cooking oil prices boiling over. KFC putting cabbage in its burgers. After decades of stable food prices, suddenly inflation is on the front page of the paper.
Addressing price rises involves government working with industry to fix supply chain issues, reducing the backlog in visa processing for skilled migrants, and pressing the Fair Work Commission for a pay rise for minimum-wage workers and aged care workers. The independent Reserve Bank has also raised rates to contain the demand-side pressures. Both the Reserve Bank and Treasury are currently forecasting that inflation will be back inside the target band of 2 to 3 per cent by 2024.
But if we’re to address inflation, it’s vital to understand it. In most countries, inflation is reported monthly, providing a regular update on price pressures. Of the 20 largest economies that make up the G20, Australia is the only one that doesn’t produce monthly inflation estimates. Instead, Australia produces inflation figures every three months.Read more
CASE OF CAUSE AND EFFECT
The Daily Telegraph, 17 August 2022
In recent weeks, we’ve learned two troubling facts about young Australians: the prevalence of mental disorders has hit a new high, and the rate of volunteering has plumbed a new low.
According to the surveys, young Australians are more likely to be experiencing anxiety or depression. At the same time, this cohort is less likely to be joining with others to help their local community. With charities in desperate need of new helpers, many are pulling back from the civic work that is so vital to a strong society.
To get a sense of the scale of the problem, let’s look at the numbers.
Among young women, an extraordinary 47 per cent have experienced a mental disorder in the previous year – up from 30 per cent in 2007. Among young men, the rate of mental disorders has grown from 23 per cent to 31 per cent. Among young people, rates of depression have doubled, rates of social phobia have tripled, and rates of panic disorder have increased nearly four‑fold.
In terms of community involvement among 18‑24 year olds, the volunteering rate is now 25 per cent, down from 30 per cent in 2006. Many remarkable young Australians still give their time and energy to help out in their local community, but the net effect is that for every five young volunteers today, we would have had six young volunteers if the rate had remained as high as in 2006.Read more
POLICY BANNING UNFAIR CONTRACTS WILL SHIELD SMES FROM EXPLOITATION
Joint opinion piece with
Julie Collins MP
Minister for Housing
Minister for Homelessness
Minister for Small Business
The Australian, 9 August 2022
The cleaning companies were multi‑billion‑dollar firms, but most of their customers were small businesses. So the big firms wrote contracts that allowed them to increase their prices. To make things worse, the contract said that if the small businesses didn’t like the price rises, they had to pay huge penalties to cancel the contract.
Small companies often lack the resources and bargaining power to negotiate terms in standard form contracts. Existing laws haven’t stopped the use of unfair terms, which are hurting small businesses across Australia.
Right now, contract terms found by a court to be unfair are unenforceable, but they’re not illegal. That’s why we’ve announced that the Albanese Government will outlaw unfair contract terms. If companies put unfair terms in their contracts and a court finds they are unfair, then they can cop a penalty from the court.Read more
LABOR WANTS TO WORK WITH BUSINESS IN A RACE TO THE TOP
Australian Financial Review, 9 August 2022
With an area of around 700 square kilometres, Singapore is about 1/10,000th the size of Australia. Not surprisingly, it doesn’t have much of a mining industry. But starting around 2006, Singapore suddenly began to play a key role in Australian commodities exports. From 2006 to 2014, BHP sold $US210 billion worth of resources to its Singapore subsidiary. They then marked it up by 10 per cent and sold it on. The iron ore never went near Singapore – it was shipped out of Western Australia to the final buyers in Korea, China, India and Japan. Yet somehow a chunk of the profits landed in Singapore.
The creation of Singapore marketing hubs isn’t the fault of the Singaporean government, which has a long and distinguished tradition of welcoming traders and financiers from around the world. It arose because some clever accountants at BHP and Rio decided to play a thimble-and-pea trick with their profits. Some called it ‘the Singapore Sling’, but while the cocktail is a deliciously sweet gin drink, these tax tactics left a sour taste in the mouth of Australian taxpayers.Read more
TAKING ACTION TO STOP TAX TREATY SHOPPING
The Australian, 25 July 2022
At first blush, treaty shopping might sound like a fun excursion to the gift store with your primary schooler. Yet far from being a pleasant way to spend a Sunday afternoon, treaty shopping is a worrisome lurk that undermines the tax system.
On July 20, the tax office released an alert about a high-risk activity that has been observed and will be subject to increased scrutiny: companies restructuring their tax affairs to take advantage of reduced withholding tax rates under a tax treaty in relation to royalty or dividend payments from Australia. As the it noted, such a restructure might involve creating a new entity in a favourable treaty jurisdiction, interposed between the foreign parent and the Australian operation in order to access the reduced tax rates under the tax treaty.Read more
CENSUS FINDINGS TO REVEAL THE BIG QUESTIONS CONFRONTING MODERN AUSTRALIA
The New Daily, June 28 2022
In the early years after European settlement, it wasn’t called a ‘Census’, it was called a ‘muster’. At a particular point in time, all the settlers in a community were gathered together in the same location to be counted. Over the years, the process became more formalised, and in 1881, the first simultaneous Census of all Australian colonies was conducted.
It wasn’t until 1911 that the first national Census took place. Field officers travelled by horse, cart and bicycle to collect the forms. All the tabulation was done by hand.
Fast forward eleven decades, and the Census has become a mostly online affair. A generation ago, Census Day was moved from 30 June to the second Tuesday in August, partly to avoid the school holidays. But 10 August 2021 found many Australians under COVID lockdown.Read more
IT'S TIME TO MAKE CENSUS OF ALL YOUR ANSWERS
The Daily Telegraph, June 27 2022
The world’s first census took place in 3800 BCE. The Babylonians counted the number of people, animals, and stocks of valuable foodstuffs, such as butter, honey and wool.
Almost 6000 years later, Australians are about to learn the results of our latest census. Taken in August 2021, at a time when much of the country was in lockdown, the Census provides a snapshot of how the country has changed.
This year, we’ll get a count of the total population, and find out which areas are growing and shrinking. The results will affect Commonwealth grants to states and territories. Census population figures help decide where federal electorates need to be created and abolished.Read more
HAVENS NO MORE
The Canberra Times, 7 May 2022
The kicker: Walmart had zero stores in those tax havens.
THE COST OF AUSTRALIA’S ‘PHENOMENAL FAILURE’ ON VACCINATION
The Australian, 6 May 2022
Australians aim high. Whether it’s the quality of our beaches, the speed of our Olympic swimmers, or the talent of our novelists, we like to think that we can be the best of the world. And we often succeed.
Yet a year ago, Australia was doing the very opposite. Of all the advanced countries in the 38-member Organisation for Economic Cooperation and Development (OECD), Australia had the lowest rate of full vaccination. This wasn’t a temporary thing. From 12 May 2021 to 26 July 2021, Australia ranked last in the OECD, underperforming countries with significantly lower levels of economic development, such as Mexico, Turkey and Portugal.Read more