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Author Archives: Michael Keating
Australia’s present budget deficit is unprecedented, but it represents an appropriate response to the recession. The resulting debt does not present a future problem, and the deficit should only be unwound as private demand recovers.
An international inquiry into the origins of the Covid-19 virus misses the main point: what the world really needs is an inquiry into the effectiveness of the response.
The government and its advisers expect this recession to be relatively short-lived, but the recovery may well be less complete than they anticipate and are planning for.
The increase in public debt in response to Covid-19 will not result in an unacceptable debt burden on young people. Instead, anyone seriously concerned about inter-generational equity would support action to reduce climate change and to improve the availability of … Continue reading
Today I address (i) how best to support aggregate demand, and (ii) how quickly to restore budget balance. In Part 1 of this article yesterday I concluded that these are the two key issues for future economic policy.
This article considers economic strategy post Covid-19. In Part 1, today, it is argued that the principal requirement will be to generate a faster rate of increase in aggregate demand, and that Morrison’s proposed business-friendly policy settings will not help. … Continue reading
Pearls & Irritations is the best blog I know to find articles that keep me up to date with the findings of policy-relevant research and expert independent evidence-based assessment and comment on a wide variety of critical policy issues.
Covid-19 will have a big impact on fiscal policy over the next few years. The Budget balance is estimated here to show a deficit equivalent to 4½ per cent of GDP this year and as much as 10 per cent … Continue reading
The Government’s unprecedented cash splash to shore up the economy will save us from what could have been a much worse recession. This makes it doubly strange that the Government is so uncommunicative about the future economic and fiscal outlook … Continue reading
The response to Covid-19 has raised an important question about the role of expert advice in the formulation of public policy, and whether it can and should be independent advice.
The latest economic response to the coronavirus is the third economic package announced in less than three weeks. Clearly more should have been done earlier, but the structure and scale of the Government’s overall economic response now seems more commensurate … Continue reading
The Government seems to think that it must balance the needs of the economy against the actions needed to stop the spread of the coronavirus. In fact this is not true, and Australia’s future economic capacity will fall if the … Continue reading
These are very uncertain times, but the Government seems to be playing catch-up, both with our health and the economy. In addition, there are continuing questions about the structure of the Government’s economic response and the effectiveness of some of … Continue reading
The Government’s economic stimulus package has generally been welcomed. But how good is it, and what are the implications for the longer-term economic outlook?
Wednesday’s release of the national accounts for the December quarter reported better economic growth than many of the pundits feared. But there is no cause for celebration.
The Australian economy has been stagnating for the last five years, with annual GDP growth averaging only 2½ per cent, and only 1¾ per cent for the last four quarters ending last September.
The Government has refused to release the Gaetjens report which purportedly exonerates the former Minister, Bridget McKenzie, and thereby the Government from charges of political bias in the distribution of the Community Sport Infrastructure grants. But why this refusal to … Continue reading
The Report by the Secretary of the Department of Prime Minister and Cabinet, Phil Gaetjens, into Bridget McKenzies’ handling of the Community Sport Infrastructure grants fails to address key questions and raises serious concerns about the relationship between the Government … Continue reading
As is frequently observed, Scott Morrison’s Government has a remarkably thin policy agenda. This article explores why this lack of ambition – indeed resistance to change – makes perfect sense from Morrison’s point of view.
Monetary policy has lifted the prices of the most expensive dwellings, but this impact is yet to flow through to the rest of the housing market. This experience reinforces doubts about the effectiveness of monetary policy when inflation and therefore … Continue reading
Trump’s trade war with China cannot and has not succeeded. But Trump risks doing major damage to the rules-based global trading system and the future of the world economy.
This article discusses the key role that the Australian Public Service (APS) should play in the development of government policy and the recommendations that the Thodey Review of APS makes to restore that role. Unfortunately, the Government is not interested, … Continue reading
The Government is triumphing its prospective Budget surplus, but are the economic forecasts for economic recovery realistic, and can the surplus really be achieved while “guaranteeing the essential services on which Australians rely”.
Last Wednesday’s release of the national accounts for the September quarter confirmed what we already knew – economic stagnation continues. Most importantly, it is hard to see why the economy will ever improve under present policies. Instead we need a … Continue reading
The Government’s independent Review of the retirement incomes system has identified four criteria against which that system should be judged: adequacy, equity, sustainability and cohesion. Yesterday I reviewed the performance of the Australian retirement income system against the criteria of … Continue reading
The Mercer Global Pension Index rates the Australian retirement income system as number three in the world. Nevertheless, the Government has commissioned an independent Review, and this article and another tomorrow discuss whether and how our retirement income system might … Continue reading
The secular stagnation of the American economy over this century helped propel Donald Trump into the White House. So far President Trump is popularly credited with achieving some improvement in the US economy, but the economic outlook may well have … Continue reading
I personally had the privilege of serving closely all of the Prime Ministers from Whitlam to Howard. In my experience each of them sought this office because they wanted to pursue a policy agenda that they thought would make Australia … Continue reading
This article takes issue with a recent article by John Menadue which argues that a largely unchallenged and powerful oligarchy is wielding untrammelled political power. Instead, a number of other reasons are proposed as to why our political parties have … Continue reading
Many pundits are arguing that if Labor is to become competitive at the next election it must focus on economic growth and jobs and abandon or at least downgrade its policies for income redistribution and to combat climate change. The … Continue reading