Ian McAuley
Ian McAuley is a retired lecturer in public finance at the University of Canberra. He can be contacted at “ian" at the domain “ianmcauley.com” .
Ian's recent articles
IAN MCAULEY. The Trans-Pacific Partnership isnt about trade liberalisation: its about corporate protection
Its in Australias interests to remain open to the world on immigration and trade, and to cooperate on climate change and labour standards, but when openness comes to mean a permissive set of policies satisfying the demands of foreign investors, as proposed in the Trans-Pacific Partnership, we risk a political backlash leading to isolation and protectionism.
IAN McAULEY. Scott Morrison commissions an economic platform for a Shorten Government
Last week the Commonwealth released a major report on productivity challenges facing Australia over the next five years. Although it was commissioned by Treasurer Scott Morrison, it is unlikely that the government, which shows no appetite for meaningful economic reform, will act on its recommendations. But the report may form a useful guide for whichever government takes the reins following the next federal election.
IAN McAULEY. Turnbulls National Energy Guarantee: can it work?
The Commonwealths proposed National Energy Guarantee is vague and confusing, and is based on dated engineering and economic ideas. But it may allow an economically responsible government, if we elect one, to reshape it into a set of policies that honour our environmental responsibilities and modernise our energy sector.
IAN McAULEY. Yet another futile attempt to support private health insurance
The governments changes to private health insurance have little, if anything, to do with health policy. Rather they are about staving off the insurers death spiral of rising premiums and desertion of profitable customers, and protecting the government from the embarrassment of yet another five or six per cent rise in premiums in 2018.
IAN McAULEY. What Australia can learn from Germanys election
At first sight the German election could be seen as a swing to the right, but its more about the continuing decline of traditional left and right parties, and the differing fortunes of Germanys regions. In Australia we can learn from Germany about how to handle our own transition to a multi-party democracy.
IAN McAULEY Private Health Insurance - let's make the young pay.
Private health insurers are losing their most profitable members, younger people whose contributions subsidise older members. Rather than forcing young people back into private insurance, the government should break private hospitals dependence on private insurance and let private insurance go the way of other high-cost industries. The media and the PHI lobby consistently understate the taxpayer subsidy to PHI. It is not $6b per annum. It is $11b pa
IAN McAULEY. Mates, lobbyists and rent-seekers
Two books, one recent the other written 35 years ago, explain how special interests are strangling the Australian economy.
IAN MCAULEY. Electricity discounts for some, price rises for others
If we follow the governments suggestion that we should hunt around for cheaper electricity there will be no net benefits, just a re-shuffling of who cross-subsidises whom in the market. We have been brought to this absurd situation by a blind faith in privatisation and competition.
IAN MCAULEY. Low wage growth: does the government understand how capitalism works?
Some on the far right may see stagnant or falling wages as a welcome boost to profits and competitiveness, but in both structural and political ways low wage growth and consequent widening inequality is undermining capitalism.
IAN McAULEY. Pauline Hanson, Malcolm Turnbull, and the ABC a Faustian bargain
Turnbulls deal with One Nation, to require the ABC to be fair and balanced, looks innocuous at first sight, but if implemented it would see the ABC cast into the wasteland of moral relativism.
IAN MCAULEY. Can Labor hold its nerve on tax reform?
Shorten has brought tax reform to the political arena. Lets hope the Labor Party doesnt go to water between now and the next election, because we need more public revenue and a fairer and less distortionary tax system.
IAN MCAULEY. Dutton's new super ministry: will it make us safer?
The Governments proposed Home Affairs mega ministry, if it concentrates resources and public attention on Islamic terrorism, could make us less safe from other threats to our public safety.
IAN MCAULEY. The National Partys Dmmerung an awakening for representative democracy?
The National Party represents a declining demographic with values out of step with most Australians. In most democracies it would be sidelined as a fringe group. It holds disproportionate political influence only because we are not facing up to the need to break from our dysfunctional polarised political system.
IAN McAULEY. Australias economy: shell be right mate or will she?
A few good economic indicators and Coalition disunity are distracting us from fundamental structural weaknesses in the Australian economy.
IAN MCAULEY. Comrade Abbott Comrade who?
It is understandable that members of the Parliamentary Liberal Party are furious with Tony Abbott. But they fail to realise that his behaviour is a manifestation admittedly a stark one of traits that are embedded in the Liberal Party.
IAN MCAULEY. This time, lets get electricity pricing right
Consumers are understandably annoyed about recent electricity price rises. But that does not mean they would necessarily react negatively to a price rise associated with adoption of the Finkel Report recommendations. People are more likely to accept a price rise serving a public purpose than a price rise flowing through to rent-seekers and paying for bureaucratic overheads in the electricity supply chain.
IAN MCAULEY. Learning from the UK election
There are many local factors explaining the comparative fortunes of Theresa Mays Conservative Party and Jeremy Corbyns Labour Party in last weeks UK election. Issues around Brexit are unique to the UK, and Mays campaign was inept. But Corbyns comparative success, in defiance of the assumptions of the media and self-appointed policy elites, carries a message that goes beyond Britain, all the way to our own democracy.
IAN MCAULEY. Australias finance sector: a bloated overhead?
Rather than capricious and populist measures such as the governments levy on the big five banks, we need a thorough and far-ranging consideration of the role of the finance sector in our economy. This sector, which should have benefited from productivity improvements to reduce its costs, has become an increasingly bloated overhead, whose growth has provided little if any real value.
IAN MCAULEY. Theres more to Morrisons conversion on debt than appears at first sight
There is nothing novel about Treasurer Morrisons discovery that government debt is all OK provided its applied to funding useful assets. But it may be an indication that the government is disillusioned with monetary policy as a means of stabilising the economy, and is moving back to fiscal policy.
IAN MCAULEY. The budget - still tough on the young
The Commonwealths budget has a Keynesian boost for a sluggish economy, and is based on an optimistic, or even heroic, assumption that economic growth will deliver a fiscal surplus within a few years. We have heard similar claims from treasurers, Labor and Coalition, ever since 2009. The Governments other claim is that it is fair a claim that holds up only if one ignores its effect on young people.
IAN McAULEY. Doing without private health insurance
Every year the Australian Competition and Consumer Commission reports on competition and consumer issues in private health insurance (PHI), and recent reports show increasing consumer dissatisfaction with PHI. Most complaints relate to unexpected charges when claims are made and confusion over terms and conditions.
IAN McAULEY. The Liberal Partys French Connection
The political future of Kelly ODwyer, Minister for Revenue and Financial Services (presently on maternity leave) is uncertain, as Liberal Party members in her electorate move to disendorse her. On one level this conflict can be seen as the shenanigans of Liberal Party faction wars, but at another level it reveals a deep malaise in our political system.
IAN McAULEY. Capital gains taxes: Keating got it right in 1985
Most commentators on the crisis in housing affordability correctly attribute the problem, in part, to the Howard Governments decision in 1999 to halve the taxation of capital gains. But that was only one aspect of the 1999 change: the other was an end of indexation. The combined effect was to shift investors incentives to favour speculation in high-growth but risky assets such as housing while penalising more conservative investments. Labor proposes to reduce the discount on capital gains, from 50 per cent to 25 per cent, without restoring indexation, but this would retain some of the worst aspects of the...
IAN McAULEY. Can we please have a more intelligent debate about corporate taxes
The simple explanation behind the Commonwealths proposal to cut corporate taxes is in terms of a struggle between the interests of business and of the broader community, but it is also about the Coalitions determination, under pressure from vested interests, to wind back the economic reforms of the Hawke-Keating Government.
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 Johns blog: Im not up to the task because I cannot make sense of the NEM.
IAN MCAULEY. Warning from Colin Barnett: Privatisation is on the nose
The WA Governments proposal to privatise Western Power the government-owned electricity utility was one of the factors contributing to the extraordinary anti-Liberal swing in Saturdays 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 Australias 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.
IAN McAULEY. South Australias Electricity Problems: Jay Weatherill Should Follow The Coalitions 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 Australias? 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.
IAN McAULEY. Pauline Hansons youth support
A recent survey has found surprisingly high levels of support for One Nation among young voters in George Christiansens electorate in northern Queensland. At first sight this seems incongruous with the Brexit and Trump votes, which showed younger people were more supportive of mainstream parties of the centre-left.
IAN McAULEY. What lies beyond capitalism?
This a review of Wolfgang Streeck's book 'How will capitalism end?'. Communists of the world, relax! Dont spend your efforts trying to bring down capitalism, because its going to bring itself down.
IAN McAULEY. Brexit, Trump and the Lucky Country Introduction
John Menadue - introduction to Ian McAuley Series. Many have been surprised and even horrified by the Brexit and Trump results. These events are likely to be followed by similar outcomes in elections in other countries this year. Serious issues have been raised a wave of anti-globalisation, an alleged swing to the right, blaming deplorables, racism and xenophobia. Establishment politics is being challenged. Russia is becoming an insider in Washington! Some of these reactions to Brexit and Trump are over-simplified, but there is no doubt that we now face complex and challenging times. Our attention...
IAN McAULEY. Brexit, Trump and the Lucky Country 1 Whos been left behind?
In developed countries the benefits of 35 years of economic growth have been unevenly distributed. Many people who once had well-paid manufacturing jobs and many who live in the country have fallen behind. While this has been most starkly manifest in the US, it is also happening in Australia.
Brexit, Trump and the Lucky Country 2 The response of those left behind
It would be hasty to attribute the Brexit and Trump votes to a swing to the right, or to an ill-informed electorate. The most compelling explanations are in terms of protest votes. Peoples anger of electorates has given an opening for political opportunists.
IAN McAULEY. Brexit, Trump and the Lucky Country 3 Globalization takes the rap, unfairly
Globalization has been only one of the developments that has led to widening inequality and social exclusion. Countries that have globalized have also introduced a raft of neoliberal domestic policies, against which people are reacting.
IAN McAULEY. Brexit, Trump and the Lucky Country 4 Issues re-framed
Contrary to some interpretations, the trend in developed countries is still towards social and economic liberalism. But there is a strong reaction against the social exclusion that has accompanied liberalization. The economic models that guide public policy are not up to the task of dealing with exclusion.
IAN McAULEY. Brexit, Trump and the Lucky Country 5 How we lost trust in government
We have lost trust in our governments and in mainstream political parties. Politicians, the media and corporate interests have been responsible for alienating governments from the people who elect them, creating fertile ground for populists.
IAN McAULEY. Brexit, Trump and the Lucky Country 6 Who exploited discontent and how
A turning point in Australian political life was the 2013 election when Abbott set about destroying what remained of trust in government and of trust in social and political institutions, including traditions of dispassionate and objective inquiry.
IAN McAULEY. Brexit, Trump and the Lucky Country 7 The left went AWOL
Contrary to right-wing conspiracy theories, there is no significant anti-business force in Australia. In fact the left has never been weaker: the traditional unionized left has been weakened by structural change, and the progressive left has dealt itself out of contention by abandoning economics.
IAN McAULEY. Brexit, Trump and the Lucky Country 8 Dont wait for a leader: we need leadership.
We have many hard issues to confront but our present political elites are adept at avoiding them. Its futile and dangerous to wait for a leader who will solve our problems. The task of leadership is one that falls on anyone who has voice.
IAN McAULEY. Holden cars, AWA TVs, Chesty Bonds underwear: Manufacturing and globalisation
Ian McAuley argues that it has not been globalisation and trade that has been the biggest factor displacing jobs in manufacturing. It has been automation.
IAN McAULEY. Opportunity Knocks: The Economics Of A Trump Victory
Theres ever reason to believe Donald Trump policies will hurt Australia. But theres some important differences and insulation.Trumps election has energised Australias far right. Abbott, Abetz, Bernardi, Canavan, Christiansen and Hanson have all said, in one way or another, that Trumps victory vindicates their own policies. On the day after the election the Telegraph portrayed Trump as Americas saviour, and blamed Obama for everything that has gone wrong in America over the last eight years.
IAN McAULEY. Mein Drumpf: Hitler, Donald Trump And A Shot Across The Bow For The Left
Were not sure who first said history doesnt repeat itself, but it does rhyme, but its an apt reminder of the similarities between the forces that have propelled Trump into the US presidency, and the forces that brought Germanys National Socialists to power in 1933. Trump claims, correctly, to be part of an incredible and great movement. There is indeed a great movement. As in the 1930s countries are turning to what may be loosely described as far-right populism, a movement embracing notions of national or racial exceptionalism, a rejection of globalization, and identification of a supposed conspiracy of...
JOHN MENADUE and IAN McAULEY. The future of globalisation.
Rescuing globalisation from cheer leaders and populists. If we cannot make globalisation work for all, in the end it will work for none. Kofi Annan Last week John Menadue raised the issue of globalisation, welcoming comment from other people in his blog community. As he points out, the rise of Trump in the USA, the Brexit vote in the UK and the success of protectionist parties in our federal election have all elevated globalisation as a pressing issue, and there is a risk that we slide into an era of isolationism and protectionism.
IAN McAULEY. The Mounting Case For A Royal Commission Into Banks And Insurance Companies
An overwhelming majority of Australians support a Royal Commission into the finance sector. Ian McAuley explains why. Were paying too much for a bloated financial service sector.A prominent example is Australias largest health insurer, Medibank Private, which in the last financial year absorbed just over a billion dollars of contributors premiums in management overheads and profits $511 million as profit and $516 million as management expenses. Spread over its 1.9 million policies thats $540 per policy holder. Using a combination of subsidies and penalties (most notably the Medicare Levy Surcharge) successive governments have bludgeoned Australians into holding private health...
IAN McAULEY. Health care and Labor.
In the recent election Labor had fine words on health care Labor will ensure that access to health care is determined by your Medicare card, and not your credit card but in reality its policy proposals, if implemented, would have been even more destructive of Medicare than the Coalitions. The Coalition, true to form, proposed to entice more people into holding private health insurance, but Labors enticements to hold PHI were even stronger.
IAN McAULEY. Problems of Private Health Insurance.
The PHI industry continues to make two invalid assumptions about private health care. The first is that governments are intrinsically high cost and bureaucratic and that the private sector is unquestionably more efficient. This is patently not true. The least efficient health service in the world, the US, is based on private health insurance and the private sector. The most efficient health service in the world is the National Health Service in Britain which is based on a single public funder. In 2014 ,Ramsey Health,the principle beneficiary of subsidised PHI paid its CEO $31 m ,the highest remuneration in...
IAN McAULEY. Brexit - retreat to isolationism and discontent of those left behind.
The Brexit vote has given the media a cornucopia of stories dissent in the British Conservative and Labour Parties, the possible breakup of the United Kingdom and turmoil on financial markets. These, however, are distractions from two serious issues that go beyond the events in one European country and in the rarefied world of financial markets. These are the retreat to economic isolationism and the discontent of those who have been left behind. Both are echoes of the developments in Europe between 1929 and 1933, which saw such terrible consequences.
Bill Shorten is right: Malcolm Turnbull is a major threat to Medicare
Labor appears to have rediscovered old values, while the Liberals dont appear changed one bit. Ian McAuley explains the mire that is the fresh debate on the future of Medicare.
IAN McAULEY. A Royal Commission into banking and the private health insurance industry.
In this election campaign the issue that triggered a double dissolution restoration of the Australian Building and Construction Commission has hardly scored a mention. That contrasts with the 1974 double dissolution election, called by the Whitlam Government in response to the Coalitions use of its Senate power to thwart the governments most important pieces of legislation. The establishment of Medibank the forerunner of Medicare was the main issue in that election. Labors vision was for a publicly-funded single health insurer, while the Coalition fought tooth and nail to defend the privileged position of private...
IAN McAULEY. The difference in the economic policies of the major parties.
In the din of distractions about political trivia, many in the media have lost sight of, or fail to understand, fundamental differences in the economic policies of the two main parties. That is their approach to distribution, or redistribution. Although politicians may accuse one another of heartlessness or of ignoring the poor, almost all politicians believe that the benefits of economic activity should be distributed fairly (even though what they see as constituting fairness may differ).