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Author Archives: Michael Keating
The current early drawdowns of superannuation balances will reduce those workers’ retirement incomes. It would therefore be desirable to allow and encourage them to restore their superannuation balances as and when they can.
Neo-Conservatives want to believe that Reagan and Thatcher achieved smaller government, lower taxes, and a booming economy. The reality, however, is very different.
The Government’s long-awaited update of the fiscal and economic outlook contains no real surprises. But what we still need to know is what the Government intends to do next when the present economic support measures run out.
Although it is good that the Prime Minister has recognised the importance of skills, missing from his reform agenda are two of the most important issues: the nature of skills and how they are taught, and the use of skills … Continue reading
The economy is presently receiving an unprecedented, but time-limited, level of fiscal support. The report just released by the Grattan Institute provides a very good analysis of what is now needed to sustain the economic recovery.
The Government’s proposed changes to the fee structures for university degrees are not fair, and contrary to the Government’s assertion, nor do these changes respond to the needs of the labour market.
Part 1 of this article yesterday discussed the reasons why National Cabinet has been successful so far. Today, Part 2 will discuss how replacing COAG seek to define the future mandate of the National Cabinet and its revamped ministerial committees, … Continue reading
Scott Morrison has decreed that “COAG is no more” and will be replaced by his new National Cabinet. Part 1 of this article below, discusses the reasons for the initial success of both the National Cabinet and COAG.
The discovery of an error of $60 bn in the costing of JobKeeper raises the issue of what should be done with this money? However, as JobKeeper was always incomplete these deficiencies should be the first call on this extra … Continue reading
MICHAEL KEATING. Why the coronavirus shouldn’t stand in the way of the next wage increase (The Conversation 26.5.20)
Wage increases are widely believed to pose a threat to employment. But this ignores their role in supporting demand growth. Instead, wage increases consistent with maintaining an equilibrium distribution of income are necessary to sustain economic growth and employment.
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