Private health insurers are losing their most profitable members, younger people whose contributions subsidise older members. Rather than forcing young people back into private insurance, the government should break private hospitals’ dependence on private insurance and let private insurance go the way of other high-cost industries.
The media and the PHI lobby consistently understate the taxpayer subsidy to PHI. It is not $6b per annum. It is $11b pa (more…)
Two books, one recent the other written 35 years ago, explain how special interests are strangling the Australian economy. (more…)
If we follow the government’s suggestion that we should hunt around for cheaper electricity there will be no net benefits, just a re-shuffling of who cross-subsidises whom in the market. We have been brought to this absurd situation by a blind faith in privatisation and “competition”. (more…)
Some on the far right may see stagnant or falling wages as a welcome boost to profits and competitiveness, but in both structural and political ways low wage growth and consequent widening inequality is undermining capitalism. (more…)
Turnbull’s deal with One Nation, to require the ABC to be “fair and balanced”, looks innocuous at first sight, but if implemented it would see the ABC cast into the wasteland of moral relativism. (more…)
Shorten has brought tax reform to the political arena. Let’s hope the Labor Party doesn’t go to water between now and the next election, because we need more public revenue and a fairer and less distortionary tax system. (more…)
The Government’s proposed “Home Affairs” mega ministry, if it concentrates resources and public attention on Islamic terrorism, could make us less safe from other threats to our public safety. (more…)
The National Party represents a declining demographic with values out of step with most Australians. In most democracies it would be sidelined as a fringe group. It holds disproportionate political influence only because we are not facing up to the need to break from our dysfunctional polarised political system. (more…)
A few good economic indicators and Coalition disunity are distracting us from fundamental structural weaknesses in the Australian economy. (more…)
It is understandable that members of the Parliamentary Liberal Party are furious with Tony Abbott. But they fail to realise that his behaviour is a manifestation – admittedly a stark one – of traits that are embedded in the Liberal Party.
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Consumers are understandably annoyed about recent electricity price rises. But that does not mean they would necessarily react negatively to a price rise associated with adoption of the Finkel Report recommendations. People are more likely to accept a price rise serving a public purpose than a price rise flowing through to rent-seekers and paying for bureaucratic overheads in the electricity supply chain. (more…)
There are many local factors explaining the comparative fortunes of Theresa May’s Conservative Party and Jeremy Corbyn’s Labour Party in last week’s UK election. Issues around Brexit are unique to the UK, and May’s campaign was inept. But Corbyn’s comparative success, in defiance of the assumptions of the media and self-appointed policy elites, carries a message that goes beyond Britain, all the way to our own democracy. (more…)
Rather than capricious and populist measures such as the government’s levy on the big five banks, we need a thorough and far-ranging consideration of the role of the finance sector in our economy. This sector, which should have benefited from productivity improvements to reduce its costs, has become an increasingly bloated overhead, whose growth has provided little if any real value.
There is nothing novel about Treasurer Morrison’s discovery that government debt is all OK provided it’s applied to funding useful assets. But it may be an indication that the government is disillusioned with monetary policy as a means of stabilising the economy, and is moving back to fiscal policy. (more…)
The Commonwealth’s budget has a Keynesian boost for a sluggish economy, and is based on an optimistic, or even heroic, assumption that economic growth will deliver a fiscal surplus within a few years. We have heard similar claims from treasurers, Labor and Coalition, ever since 2009. The Government’s other claim is that it is “fair” – a claim that holds up only if one ignores its effect on young people. (more…)
Every year the Australian Competition and Consumer Commission reports on competition and consumer issues in private health insurance (PHI), and recent reports show increasing consumer dissatisfaction with PHI. Most complaints relate to unexpected charges when claims are made and confusion over terms and conditions. (more…)
The political future of Kelly O’Dwyer, Minister for Revenue and Financial Services (presently on maternity leave) is uncertain, as Liberal Party members in her electorate move to disendorse her. On one level this conflict can be seen as the shenanigans of Liberal Party faction wars, but at another level it reveals a deep malaise in our political system. (more…)
Most commentators on the crisis in housing affordability correctly attribute the problem, in part, to the Howard Government’s decision in 1999 to “halve the taxation of capital gains”. But that was only one aspect of the 1999 change: the other was an end of indexation. The combined effect was to shift investors’ incentives to favour speculation in high-growth but risky assets such as housing while penalising more conservative investments. Labor proposes to reduce the discount on capital gains, from 50 per cent to 25 per cent, without restoring indexation, but this would retain some of the worst aspects of the Howard changes. (more…)
The simple explanation behind the Commonwealth’s proposal to cut corporate taxes is in terms of a struggle between the interests of business and of the broader community, but it is also about the Coalition’s determination, under pressure from vested interests, to wind back the economic reforms of the Hawke-Keating Government. (more…)
John Menadue has asked me to write about the National Electricity Market – the NEM. I should be qualified to do that: my first degree and my first years of professional work were in electrical engineering and in my later professional work I taught public economics. Who could be better qualified? But let me apologise to the readers of John’s blog: I’m not up to the task because I cannot make sense of the NEM. (more…)
The WA Government’s proposal to privatise Western Power – the government-owned electricity utility – was one of the factors contributing to the extraordinary anti-Liberal swing in Saturday’s Western Australia election. Privatisation of electricity has also been an issue in the eastern states. While the coal lobby and climate change deniers have blamed South Australia’s blackouts and shortages in other states on renewables, more detached observers, such as John Quiggin, have pointed out the part played by privatisation in raising prices and contributing to electricity shortages. (more…)
Spare a thought for the people of South Australia. Large parts of Adelaide blacked out for up to 18 hours without notice. Trams stopped in their tracks across busy intersections. A bitter and partisan debate in state parliament about responsibility for the chaos – the electricity supplier, the federal government, other states putting their own energy needs ahead of South Australia’s? A heated argument about energy sources – coal or alternatives? Firms threatening to shift to other states because of unreliable electricity supply. Bitter complaints from consumers and businesses about electricity prices. (more…)
A recent survey has found surprisingly high levels of support for One Nation among young voters in George Christiansen’s electorate in northern Queensland. At first sight this seems incongruous with the Brexit and Trump votes, which showed younger people were more supportive of mainstream parties of the centre-left.
This a review of Wolfgang Streeck’s book ‘How will capitalism end?’.
Communists of the world, relax! Don’t spend your efforts trying to bring down capitalism, because it’s going to bring itself down. (more…)
John Menadue – introduction to Ian McAuley Series.
Many have been surprised and even horrified by the Brexit and Trump results. These events are likely to be followed by similar outcomes in elections in other countries this year.
Serious issues have been raised – a wave of anti-globalisation, an alleged swing to the right, blaming ‘deplorables’, racism and xenophobia. Establishment politics is being challenged. Russia is becoming an insider in Washington!
Some of these reactions to Brexit and Trump are over-simplified, but there is no doubt that we now face complex and challenging times.
Our attention has been focused on the UK and the US, but these issues, although important in Australia, may not take the same acute form here. But one thing we do have in common with Trump and others is the conservative protection of privilege by diverting attention from inequality , unfairness and the power of elites and focus instead on the most vulnerable, Muslims, refugees and welfare ‘bludgers’
Against this background I asked Ian McAuley to focus on these issues. His introduction and eight parts follow. Your comments would be welcome. John Menadue. (more…)
In “developed” countries the benefits of 35 years of economic growth have been unevenly distributed. Many people who once had well-paid manufacturing jobs and many who live in the country have fallen behind. While this has been most starkly manifest in the US, it is also happening in Australia.
It would be hasty to attribute the Brexit and Trump votes to a “swing to the right”, or to an ill-informed electorate. The most compelling explanations are in terms of protest votes. People’s anger of electorates has given an opening for political opportunists.
Globalization has been only one of the developments that has led to widening inequality and social exclusion. Countries that have globalized have also introduced a raft of neoliberal domestic policies, against which people are reacting.
Contrary to some interpretations, the trend in “developed” countries is still towards social and economic liberalism. But there is a strong reaction against the social exclusion that has accompanied liberalization. The economic models that guide public policy are not up to the task of dealing with exclusion.
We have lost trust in our governments and in mainstream political parties. Politicians, the media and corporate interests have been responsible for alienating governments from the people who elect them, creating fertile ground for populists.