Are you ready for another dose of Brexititis? This past week, PM May triggered Article 50, meaning negotiations can begin, after due examination by the 27 remaining states, between the exiting UK (or, at least, the parts that survive) and the EU but only as a body. The EU has forbidden the divide and rule of the UK pitting one EU member against another, an insidious act by what Guardian journalist, Antony Beevor, called last year “the most hated nation in Europe”. The terms of Mrs May’s letter didn’t win too many friends either. (more…)
Category: Economy
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MAX HAYTON. Kiwibank – lessons for Australia.
It’s not unusual for big banks to be accused of greed, unfairness, poor service and corruption. The answer often proposed is to create a government owned bank. This has been suggested as a solution in Australia. New Zealand has already built one, but its experience shows public ownership doesn’t necessarily fix all the problems. (more…)
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GILES PARKINSON. How AEMO’s new boss will reform Australia’s energy vision.
Audrey Zibelman, the new chief executive of the Australian Energy Market Operator, has been in the job for little over a week, but is already making her mark, signalling the biggest shift in energy management philosophy in a generation. (more…)
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Saul Eslake’s well timed warnings help inform the housing affordability debate
Saul Eslake, one of Australia’s most highly respected independent economists, has sounded some sobering warnings about the impact of declining rates of home ownership (and rising levels of mortgage debt) on Australia’s retirement income system. He has also once again stressed the need for reform of the demand side of the supply and demand equation affecting housing affordability. (more…)
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Disadvantaged Students Denied Adequate Funding by Massive Tax Concessions for the Wealthy
The latest Tax Expenditures Statement shows that Australia can easily afford the Gonski funding plan to bring under-resourced public schools up to the national standard and reduce the large proportion of disadvantaged students not achieving expected benchmarks. It is simply a matter of reducing the tax privileges of the wealthy to support increased learning opportunities for the disadvantaged. (more…)
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BOB BIRRELL and BOB KINNAIRD. Migration policy; All about numbers
The permanent skilled migration program should be cut by nearly half, from 128,000 (primary and secondary applicants) to around 70,000. This includes migrants granted visas under the points test and those sponsored by employers. (more…)
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PETER WHITEFORD. ‘Them’ and ‘us’: the enduring power of welfare myths.
Despite the evidence that deliberate fraud is a tiny fraction of social security spending, it remains a mainstay of much reporting of welfare in the Australian media. The Daily Telegraph is a repeat offender. (more…)
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JOHN DALEY and BRENDAN COATES. The latest ideas to use super to buy homes are still bad ideas.
Treasurer Scott Morrison wants to use the May budget to ease growing community anxiety about housing affordability. Lots of ideas are being thrown about: the test for the Treasurer is to sort the good from the bad. Reports that the government was again considering using superannuation to help first homebuyers won’t inspire confidence. (more…)
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CAMERON MURRAY. Affordable housing reform.
While the decline of our economic diversity, has failed the average worker, it has been a boon for the landlord class. Those who already own land and housing benefit at the expense of those who want access to housing for their own household security. Those who own the banks benefit too. And we have seen the enormous lengths to which government will go to support the way things are. Every “affordable housing” policy, … is designed not to let housing prices fall, and housing become genuinely more affordable. (more…)
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DAVID JAMES. Penalty rate cuts are the result of thinking small
Australia is showing signs of contracting the American disease of rising inequality, which will ultimately spill over into low growth, especially when the effect of high household indebtedness has its inevitable dampening effect. In the last quarter of 2016 GDP growth was strong and corporate profits jumped 20.1 per cent. But wages and salaries actually went down 0.5 per cent on a seasonally adjusted basis.
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JOHN MENADUE. How the gaming of land rezoning by vested interests keeps housing unaffordable.
After Easter, we will be posting a ten-part series on making housing more affordable for all. One of the problems in housing affordability is the political muscle of some developers in gaming rezoning and reaping substantial capital gains from property. The politics of property is a major issue. Property-owning interests have a particular interest in inflating property prices. In the repost below, Paul Frijters and Cameron Murray describe the corruption of land rezoning in Brisbane. When this report was first posted, Michael Pascoe in the SMH on 29 September 2015, said ‘This paper should have brought down state and local governments, sparked a royal commission and radically changed the Australian housing industry. Months later, the paper seems to be forgotten and Australia’s biggest racket rolls on unchallenged; gaming land rezoning for enormous profits.’ John Menadue (more…)
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MUNGO MacCALLUM. Gas bags and hydro hype.
So Turnbull gave his orders: ensure that there will be enough gas held locally if there are crises. And the bloated gas bags were only too happy to concur, at least a couple of them were, which was enough to secure Turnbull bragging rights. But what was missing was just how this process would be implemented, and more particularly, what it would cost. (more…)
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IAN VERRENDER. How the free market failed Australia and priced us out of our own gas supply
We are the landlords. The energy companies are tenants. If we had a controlling stake in the business, it would be much easier to ensure the kind of chicanery that has taken place in the past few years was never repeated. There would never be shortages.
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TIM COLEBATCH. Why gas prices went sky-high, and what governments need to do about it
There is an overwhelming consensus that the centrepiece should be an emissions intensity scheme, as proposed by the draft Finkel report, by the government’s handpicked Climate Change Authority, and by electricity generators and big users alike. This would give the energy industry a clear, bipartisan timetable to reduce emissions, enabling it to plan and invest with confidence. (more…)
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PETER BROOKS and JOHN WILLOUGHBY. A call for doctors to take a stand on the Adani Carmichael coal mine
The comprehensive investigation, published as The Adani Files (adanifiles.com.au), provides a litany of stories of pollution, failed clean-ups of damaged environments, and allegations of corruption and of abuse of workers. (more…)
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HANS J OHFF. A Future Submarine bonanza for France
Seen through the eyes of an engineering contractor and shipbuilder I suggest that the French have hit the jackpot. They will be falling over themselves to sign the proposed Framework Agreement between the Government of Australia and the Government of the French Republic concerning cooperation on the future Submarine Program. (more…)
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IAN McAULEY. The National Electricity Market: What happens when economists get involved with electricity
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…)
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ALAN PEARS. The solution to Australia’s gas crisis is not more gas.
Eastern Australia has plenty of gas. The problem is that most of it is being exported at prices lower than some Australians are paying. And the price volatility resulting from the present shambles is making life difficult for some Australian industries. (more…)
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MARK BEESON. WA and the politics of the resource curse. Take on the miners at your peril!
WA is but the most glaring example of the way that Australia’s politics have been directly affected by the politics of the so-called ‘resource curse’, when a powerful economic sector uses its disproportionate influence to shape political outcomes. (more…)
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MICHAEL WEST. Gas crisis? Or glut? Why Japan pays less for Australian LNG than Australians do.
It is bizarre that gas customers in Japan buy Australian gas more cheaply than Australians. Some of this gas is drilled in the Bass Strait, piped to Queensland, turned into liquid and shipped 6,700 kilometres to Japan … but the Japanese still pay less than Victorians. (more…)
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JOHN MENADUE. Making miners pay their fair share.
The victorious Labor Party in Western Australia has got off on the wrong foot in its timidity towards the mining sector. Its leader, Mark McGowan, has said that a Labor Government will not support a mining royalty proposed by the WA Nationals because it would drive investment away from WA. This is a very hackneyed line about frightening foreign investment and sovereign risk. (more…)
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IAN MCAULEY. Warning from Colin Barnett: Privatisation is on the nose
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…)
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JOHN MENADUE. A little bit of honesty would go a long way in energy policy.
We really do need some honesty from the media on energy policy. The fact is that Coalition policies have failed for at least eight years and are largely responsible for our pending crisis. Media cover-ups for failed Coalition policies will not change that fact.
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IAN McAULEY. South Australia’s Electricity Problems: Jay Weatherill Should Follow The Coalition’s Example
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…)
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FRANK STILWELL and CHRISTOPHER SHEIL. The IMF is showing some hypocrisy on inequality
The IMF should practice what it preaches when it comes to inequality. (more…)
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JOHN MENADUE. Failed Leadership in Church and State!
From my experience and observation good leadership is about creating disequilibrium and a process to galvanise the group to change. Without disequilibrium there will be no worthwhile change. (more…)
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JOHN QUIGGIN. The case for renationalising Australia’s electricity grid.
The public debate over the problems of electricity supply displays a curious disconnect. On the one hand, there is virtually universal agreement that the system is in crisis. After 25 years, the promised outcomes of reform – cheaper and more reliable electricity, competitive markets and rational investment decisions – are further away than ever. (more…)
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JOHN AUSTEN. The Sydney metro – the doubt and mess continues.
A little more real information about Sydney rail development is coming to light. It is not dispelling the doubts about metro. A decision on Badgerys Creek rail, which would have been straightforward without the metro, is now ‘years off’. The extent of metro disruption is becoming evident – spreading to even non-metro lines. (more…)
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ANDREW FARRAN. Some good news on trade at last.
The WTO’s long awaited multilateral Trade Facilitation Agreement has at last received the required number of ratifications and entered into force on 22nd February. It will expedite the movement and clearance of goods at the border and at airports, and significantly reduce time and costs for traders. (more…)
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MICHAEL WEST. Australia’s march to corporatocracy.
Confounding the familiar government narrative of reckless spending binges by Labor, the Coalition actually has the record of greater profligacy when it comes to showering billions of dollars of taxpayers’ money on external consultants. (more…)