Writer
Michael Keating
Michael Keating is a former Secretary of the Departments of Prime Minister and Cabinet, Finance and Employment, and Industrial Relations. He is presently a visiting fellow at the Australian National University.
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MICHAEL KEATING Why the Stage 3 tax cuts will need to be revisited.
In previous articles I argued that Stage 3 of the Government’s proposed tax cuts should be opposed (see Pearls & Irritations, 30 May and 24 June). However, the Government appears to have the numbers to pass its proposed tax cuts as one package, with or without the support of the Labor Party. Nevertheless, the Grattan Continue reading »
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MICHAEL KEATING. Urban and Regional Policy
Spatial inequality has risen dramatically over Australia in the last forty years, and our cities are in many ways becoming less liveable. This article draws on the recent CSIRO report on the Australian National Outlook to summarise the major policy shift that is required affecting urban development to enable well-connected, affordable cities that offer more Continue reading »
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MICHAEL KEATING. Australian National Outlook
A very significant new report was released last week on the Australian National Outlook. In this article, I summarise the report’s discussion of the key challenges and policy choices that Australia faces, which will affect our future over the next fifty years. Continue reading »
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MICHAEL KEATING. Lies, Damned Lies and [tax] statistics.
Last Saturday the Sydney Morning Herald (SMH) published an article, which purported to show that “Middle and high-income earners will face some of the highest tax rates in the English-speaking developed world unless the Morrison government’s $158 billion tax plan is passed in full when the Parliament returns next month”. Unfortunately, I consider this article Continue reading »
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MICHAEL KEATING Budget Deficits: Good or Bad
Returning the Budget to surplus has been an article of faith in most Australian political dialogue for the last decade. However, with stagnant economic growth and the Government’s proposed tax cuts, there is a real risk that Budget surpluses cannot be sustained. On the other hand, some people who are concerned that more public Continue reading »
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MICHAEL KEATING Why Labor should oppose Morrison’s tax cuts
Labor should oppose the second and third round of the Government’s proposed tax cuts which only take effect after the next election. The future is too uncertain to lock-in these tax cuts now. Furthermore, reasonable projections raise strong doubts whether they can be afforded, and they do not represent the best way to increase economic Continue reading »
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MICHAEL KEATING Labor and the economy: Future policy choices?
Labor went into the recent election with a comprehensive economic plan. Many commentators have blamed Labor’s election loss on this plan, and its support for modest redistribution, thus raising the question of where does Labor go from here?…Labor needs to sell the message that redistribution is essential to sustain economic growth. Continue reading »
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MICHAEL KEATING. The Morrison Government’s Economic Policy
The Morrison Government has been returned – and it is the Morrison Government – which has been returned without the semblance of an economic policy. And this lack of a credible economic policy did not stop Morrison winning an election in which the economy appears to have been the deciding issue. Continue reading »
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MICHAEL KEATING. This election offers a very real choice. Part 2
In a previous article (posted yesterday) I compared the Coalition and Labor fiscal plans. The credibility of these plans, as well as their value, depends significantly on whether the underlying economic parameters upon which the plans are based are sound, and equally how those plans will impact on economic activity and growth. These issues are Continue reading »
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MICHAEL KEATING. This election offers a very real choice. Part I
The two major issues in this election are climate change and the economy and cost of living pressures. In both cases the two major parties are offering very different strategies. In these two articles I will focus on the economic choice being offered to voters. In this article, I will compare the two Parties’ fiscal Continue reading »
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MICHAEL KEATING. The Budget: Part 2
The Budget is the most comprehensive statement of a government’s priorities. It is the Budget that tells us specifically where the government intends to spend and how it intends to pay for that expenditure. In this article, I will seek to compare the Government and the Oppositions policies for taxing and spending, relying principally on Continue reading »
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MICHAEL KEATING. The Budget: Part 1
The Budget provides the opportunity for the Government and the Opposition to outline their respective economic strategies and their relative priorities. Interestingly, while there are significant differences between the two major political parties, there are also important similarities; probably reflecting the economic constraints which both parties have had to work within. Continue reading »
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MICHAEL KEATING. The True State of the Economy
As usual the state of the economy and its management are likely to play a central role in the forthcoming election. With the election now only six weeks away and the Budget tomorrow, it is timely to consider the true state of the economy and its management. Continue reading »
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MICHAEL KEATING. Why is our economic growth rate less than half its potential, and what to do about it?
The poor performance of the Australian economy, as further revealed in last week’s release of the National Accounts, raises questions about the longer-term economic outlook and whether the conventional diagnosis of our major economic challenges is correct. Notwithstanding resistance from the Government and some business interests, most economists believe that increased wage growth is essential. Continue reading »
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MICHAEL KEATING. Labor’s policy of disallowing franking credit rebates: who will be affected, and by how much?
This article examines the claims that people with relatively modest incomes will be hard hit by Labor’s proposal to stop cash rebates of dividend franking credits to people whose taxable income is insufficient to make full use of those franking credits. Instead, this examination of the evidence shows that these claims are almost totally exaggerated. Continue reading »
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MICHAEL KEATING. National Security: How Professional is the Advice?
Prime Minister Morrison and Minister Dutton have launched a scare campaign over the Medivac Bill, alleging that 1000 refugees will arrive in Australia from Manus and Nauru in a matter of weeks, which will in turn start the boats coming again. In an effort to gain some credibility for this claim, the Government has cited Continue reading »
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Housing affordability and Labor’s tax proposals (Revised)
Home ownership has become much less affordable. It is a major source of inequality both between generations and within generations. Housing cannot become more affordable without bringing down house prices relative to incomes. Labor’s tax proposals are intended to do just this. But is this the right time? House prices are allegedly falling already, and Continue reading »
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MICHAEL KEATING. The Prime Minister’s Economic Plan
This week the Prime Minister promised to return the Budget to surplus, massively reduce net government debt, and create 1.25 million jobs over the next five years. However, there was no attempt to substantiate these promises, nor to argue that the promises were a logical outcome of his so-called Economic Plan. Indeed, apart from alleging Continue reading »
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MICHAEL KEATING. Equality: What is it and Why is it important?
Inequality has risen in most of the advanced economies, including Australia. It is damaging both the fabric of our society and economic growth. The Government appears to acknowledge that it should pursue equality of opportunity, but not outcomes. However, the Government has done little that would improve the equality of opportunity, especially relative to the Continue reading »
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MICHAEL KEATING. The Future of Democracy: Part 2
Yesterday in Part 1 of this article I discussed some of the possible explanations for the apparent loss of government capacity in most advanced democracies. Today in this second Part I will discuss some of the solutions that have been proposed to restore government capacity. This discussion has been influenced in part by Laura Tingle’s Continue reading »
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MICHAEL KEATING. The Future of Democracy: Part 1
At the start of a New Year, a year when Australia will have to elect a new government, it seems a good time to consider the future outlook for our system of democratic government. Overall there is a sense that citizens in many of the advanced democracies have lost confidence in the capacity of their Continue reading »
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MICHAEL KEATING. The Best of 2018: Trickle down economics and the Emma Alberici article.
The ABC says that their decision to withdraw Emma Alberici’s article was because it represented an opinion for which there is allegedly no evidence. In fact there is plenty of evidence that increasing corporate profits will not lead to any increase in investment or employment and wages if aggregate demand continues to remain weak. Furthermore Continue reading »
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MICHAEL KEATING. The Government’s Mid-Year Economic and Fiscal Outlook Statement
As widely heralded by the Government in advance, the mid-year update of the economic and fiscal outlook shows an improvement in the budget balance. A larger surplus is forecast, starting in the next financial year and increasing thereafter. Whether this reflects good management, as the Government would have us believe, is a moot point. Equally, Continue reading »
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MICHAEL KEATING. Slow Wage Growth and Its Implications for the Government’s Economic and Fiscal Forecasts
On Monday the Government will release the mid-year update of its economic and fiscal outlook. The Government hopes that the announcement of a return to budget surplus in 2019 will underpin its claims as an economic manager in the run-up to the May election. Clearly, however, that projected surplus will depend upon the assumptions employed, Continue reading »
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MICHAEL KEATING. The Future Agenda for Economic Reform
Given the lack of agreement about what are our key problems we shouldn’t be surprised that ‘economic reform’ is presently in the doldrums. But progress would be easier if the business community recognised that the old agenda to improve the flexibility and competitiveness of markets is now largely complete. Instead I argue that the new Continue reading »
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MICHAEL KEATING. Economic Strategy for the 21st Century
Traditionally economists have tended to ignore distributional issues. These issues were considered to rest on value judgements, and to therefore be outside the purview of orthodox neo-classical economics. To the extent that distribution did enter the economist’s model, it was often presumed that there was a trade-off between equity and efficiency. However, it is argued Continue reading »
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MICHAEL KEATING. The US Economic Outlook
One of President Trump’s proudest claims is how successful he has been in creating jobs and growth. Indeed, with typical restraint, Trump has boasted that the US economy, thanks to him, is now in the best shape of all time. But exactly how strong is the US economy, can it last, and what is most Continue reading »
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MICHAEL KEATING. Privatisation: When does it work, and when doesn’t it work?
Opponents of privatisation accuse it of being a key part of neo-liberal ideology. But blanket opposition to privatisation seems to me to be equally ideological. Instead, privatisation should be considered on a case-by-case basis. Accordingly, this article discusses the criteria against which the possible privatisation of a government service and its implementation should be considered. Continue reading »
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MICHAEL KEATING. The Future Demands for Government Revenue
At The Australia Institute’s Revenue Summit on Wednesday I presented a paper that showed that the Federal Government’s future economic and budget forecasts are most likely wrong. Instead, I showed why a modest increase in the ratio of revenue to GDP will be necessary over the next couple of decades, if we want to maintain Continue reading »
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MICHAEL KEATING. The Change from Turnbull to Morrison: What Difference has It Made?
Now that Scott Morrison has passed the fifty-day landmark as Prime Minister, this article considers what has changed since the demise of Malcolm Turnbull and what difference Scott Morrison will make in resolving the major policy challenges that Australia is facing. Continue reading »