Author Archives: Michael Keating
The Government’s stage 3 tax cuts due to come into operation in 2024-25 should be scrapped. They are too costly and too biased in favour of the highest incomes. Instead, there are other better ways to support economic growth using … Continue reading
The budget deserves a “pass”, but the government is favouring tax cuts which may not all be spent. Also much of the assistance appears to be poorly targeted to the areas which have most suffered a loss of jobs.
Trump is notorious for his lies, but it is time that a fact check was applied to Scotty from Marketing, too. Without it I doubt we can elevate the political debate from its present populism.
Too often the public debate is around whether there should be less regulation, but typically regulation exists for a reason, and the issue should be how to regulate more effectively.
Yesterday I considered the economic outlook and concluded that on present policies the pace of the recovery post-Covid is likely to be too slow. Today’s article discusses what extra stimulus should be incorporated in the Budget in two weeks, and … Continue reading
In two weeks the Government will bring down its delayed 2020 Budget. This article discusses the economic outlook and concludes that further stimulus measures will be necessary in the forthcoming Budget. The desirable size of that additional fiscal stimulus and … Continue reading
Infrastructure spending is touted as the path to economic recovery, but our leaders can no longer afford to throw billions at programs with little economic merit or policy logic.
A hot political issue is whether to proceed with the legislated increase in superannuation contributions from 9.5 to 10 per cent next July. There are pros and cons but if the superannuation increase is further postponed, there should be an … Continue reading
Yesterday Part 1 of this article argued that bringing forward the second and third stages of the Government’s legislated tax cuts would achieve very little economic stimulus and would damage the longer-term fiscal position. Part 2 today considers the future … Continue reading
The Covid-induced recession has turned out to be worse than we initially hoped writes Michael Keating. Part 1 of this article discusses the additional fiscal stimulus that will be necessary and why it should not include bringing forward the Government’s … Continue reading
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.