Treasurer Jim Chalmers pulled one unexpected rabbit out of his hat in Tuesday’s 2025-26 federal budget. (more…)
Saul Eslake
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Three reasons Victoria has joined Tasmania, SA as a beggar state
The Commonwealth Grants Commission’s annual updates of its recommendations as to how the revenue from the GST should be carved up among the states and territories almost always contain a few surprises – pleasant for some, and unpleasant for others, since carving up a pie is, by definition, a “zero sum game”. (more…)
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Europeans (and others) vs Trump
I am not suffering from what some of President Donald Trump’s more fervent supporters — both in the US and in Australia — like to call “Trump derangement syndrome”. That is, I’m not disputing that he won the presidential election held last November “fair and square”, as did the Republican Party in both the House and the Senate, and that together they have a mandate to implement the policies which they presented to the American people during the campaign which preceded those elections. (Whether they have a mandate to implement policies which they didn’t present to the people during the campaign, or indeed policies which President Trump explicitly distanced himself from during the campaign is another matter, but not one that I’m going to pursue here). (more…)
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As expected, the RBA cut its cash rate – but played down the prospects for a series of follow-up moves
Well, they did it! The Reserve Bank of Australia Board decided, at its meeting conducted over the past two days, to cut its official cash rate by 25 basis points to 4.10%, after having held it at 4.35% since November 2023, and having raised it by 425 basis points over the preceding 18 months. (more…)
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Liberal Party is yet to heed the message sent in Werribee
State and federal oppositions will draw encouragement from the byelection result. But neither has shown voters a coherent and credible budget and economic strategy. (more…)
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Western Australia is rolling in (even more) cash – thanks to nature, China and both sides of federal politics
No wonder the Western Australian state government left it until Christmas Eve to release its Mid-Year Budget Update (officially titled Mid-Year Financial Projections Statement). It yet again shows how the government of Australia’s richest state is rolling in cash, thanks largely to nature’s and China’s gifts, but helped along by the politically-motivated corruption of the basis for distributing revenue from the Federal Government’s GST among the states and territories, originally perpetrated by the Morrison Government but maintained and extended by the Albanese Government (notwithstanding its oft-professed commitments to “sound fiscal management”, and getting its own budget into “good nick”). (more…)
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Will Labor have the guts to propose changes to negative gearing?
Press reports this week suggest that the Albanese Government has sought advice from Treasury about possible changes to negative gearing and the capital gains tax discount, to be taken to the election due to be held before the end of May next year. (more…)
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Axing negative gearing won’t have any effect on rentals
Negative gearing costs Australian taxpayers billions each year. Its defenders say abolishing it will cause a rental crisis. That’s not true. (more…)
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Why WA gets the share of GST that it wants
WA Treasurer Rita Saffioti MLA is almost certainly right when she says that there would be a “voter backlash” [in Western Australia] if “you take our [sic] GST”, as reported in The Australian. (more…)
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‘Price-gouging’ and ‘profiteering’ haven’t been major contributors to Australian inflation
Australia’s experience over the past three years of the highest inflation in 35 years is in large part — as it has been in other countries — the result of producers of goods and services, in both the private and public sectors, being able to pass on increases in costs to their customers or clients in the form of higher prices. (more…)
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Labor’s spending cloaked behind a veil of ‘security’
12½ years ago I wrote, in a column published in the Fairfax (now Nine) mastheads, that “the surest way to gain acceptance for policy proposals that former Treasury Secretary Ken Henry might have called ‘frankly, bad’ is to wrap them in a ‘security’ blanket”. (more…)
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Is China heading for some kind of ‘currency crisis’?
In the short term, no. But over the medium- to longer-term, the possibility of a Chinese ‘currency crisis’ – by which I mean an abrupt fall in the value of the renminbi against other currencies, prompted by large capital outflows, and possibly entailing large falls in the values of other Chinese assets – cannot be dismissed. (more…)
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Have we passed ‘Peak China’?
Saul Eslake, the renowned and independent economist, has updated his China chart pack which was last prepared in January 2023. The chart pack gives a bird’s eye view of the economic challenges China needs to address. By using the term ‘Peak China’, he does not mean that China will collapse, but that its future economic growth will be much slower than in the past. (more…)
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The worst Australian public policy decision of the 21st century
I regard the changes made to the carve-up of GST revenues among the states and territories by the Morrison Government in 2019, with the support of the then Labor Opposition, and continued (indeed extended) by the Albanese Government, as possibly the worst Australian public policy decision of the 21st century thus far. But very few people understand it. This article is an attempt to correct that. (more…)
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Reflections on ‘Australia Day’
I worked last Friday, as I have done every 26th January since 1994, when then Victorian Premier Jeff Kennett (I was living in Melbourne at the time) ordained that the ‘Australia Day’ holiday would be observed in Victoria on the 26th January, rather than on the Monday nearest to that date, as it had previously been for many years. (more…)
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Will the Productivity Commission wind back the WA GST deal?
Danielle Wood’s appointment as the Chair of the Productivity Commission is, in my opinion, an inspired choice, and I have no doubt that she will do an outstanding job, as she has done as CEO of the Grattan Institute. (more…)
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The Morrison ‘dirty deal’ on GST revenue sharing that benefits WA
And it’s no less shameful that this ‘dirty deal’ has been supported in this by the Labor Party, who have promised to uphold these changes should they form government after the election on 21st May. (more…)
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Which party is the better economic manager? Neither!
The reality is that neither of the major parties can reasonably claim to be ‘better economic managers’ than the other. (more…)
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With allies like these, Australia doesn’t need enemies
As Australia’s trade dispute with China continues, allies who have pledged solidarity with Australia have been moving into the trade spaces from which we’ve been evicted. Hardly ‘protecting our back’ as the US boasts. (more…)
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Are there lessons for the rest of the world in Australia’s management of covid-19 and the “corona-recession”?
One could question whether Australia is ‘leading the pack’ in recovering from the ‘corona-recession’. (more…)
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WA’s GST deal is keeping the rest of the nation under water
Every government in Australia is running a budget deficit. Except one. Western Australia, unlike the rest of Australia and the world, is rolling in it.
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Reflections on the economic record of the Trump Administration
It no doubt came as a shock to many (non-American) observers of the recent US election that almost 74 million Americans (more than 47% of those who voted) would have preferred Donald Trump to remain in the White House for another four years. Like many among America’s academic, media, and corporate elites, outside observers have long struggled to understand the reasons for Trump’s ongoing popularity with such a large proportion of the American population. (more…)