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.
Michael's recent articles
17 April 2025
Trump: a ridiculous ego and incredibly ignorant
The analysis underpinning Donald Trump’s tariff policy is fatally flawed. Thus, it will fail to achieve its objective of restoring the living standards of his MAGA supporters.
29 March 2025
What could we expect from a Dutton Government?
Peter Dutton’s budget reply Speech is full of distortions and many of the key polices are flawed or we cannot be sure they will work as intended. The Labor Party might be criticised as too cautious, but the Coalition is clearly not ready for government.
27 March 2025
A cautious responsible budget
Labor’s pre-election budget provides well-targeted cost of living relief within the bounds of responsibility, but the restoration of living standards is some way off.
6 March 2025
Minority government: what will it look like?
After the election Australia is likely to have a minority government with the independents, who will hold the balance of power, negotiating each issue on its merits. But democracy is best served if each independent states before the election which party they will support to form a government by guaranteeing supply.
20 February 2025
Trump's tariffs will not restore American manufacturing
The decline in manufacturing jobs is common to most developed economies and is not unique to the US. Further, Donald Trump is nothing if not delusional, and his tariffs will only damage both the US economy and others as well.
8 February 2025
Dutton's war on waste
Contrary to what Peter Dutton would like the electorate to believe, reducing administrative waste will save very little money. If Dutton is serious, he would review major capital projects which lack proper evaluation, starting with his uneconomic nuclear energy proposal.
1 February 2025
Interest rates should start falling now
Australian inflation is almost back in the target range of 2-3%. The Reserve Bank should begin to cut interest rates now. This will help avoid a recession as well as substantially reducing cost-of-living pressures on the one third of households with a mortgage.
25 January 2025
Reforms are needed to ensure an adequate retirement income
Australians now have access to significant superannuation balances, but if superannuation is going to meet its purpose of ensuring an adequate income in retirement, reforms are needed to provide better access to a superannuation pension.
18 January 2025
President Trump and Australia's National Security
Australia needs to try and persuade the Trump Administration that no country can expect to dominate our region and the benefits of cooperation. But if, as is likely, Trump refuses to accept a multipolar region then Australia must be prepared to act on its own and seek its security within Asia.
7 January 2025
Which party is the more competent economic manager – Labor or Liberal?
Judgments about economic management will be critical in the next election. Examination of their respective records and policies suggests that contrary to popular opinion, Labor is better than the Coalition.
19 December 2024
Dutton's Economic Cons: household electricity bills to rise by $665 a year under Coalition
Like Trump, Dutton likes to portray himself as a strong man. But appearances are not everything, and Dutton is pretty much an economic policy vacuum.
11 December 2024
Trump's economic delusions
Trump’s economic strategy is based on a series of delusions that will result in higher inflation, a bigger trade deficit and a loss in the value of the American dollar. How can that Make America Great Again?
7 December 2024
To avoid recession, cut interest rates next week
Interest rates settings depend on forecasts of price inflation, wages and unemployment. There is now sufficient evidence to suggest that the Reserve Bank should begin to cut interest rates soon and arguably at its December Board Meeting. The balance of risks if it stays there much longer is that the economy will fall into a full recession.
2 December 2024
Are you better off? If not, why not? Productivity, income distribution and the cost of living crisis
While lifting the rate of productivity growth is the obvious solution to the cost of living crisis, judging by the experience of most developed economies, it is not obvious how to restore productivity growth.
30 November 2024
A ceasefire in Lebanon - Gaza next?
Third party intervention led by the US and France has achieved a ceasefire in Lebanon. The US now needs to push for a settlement in Gaza where the combatants withdraw, and an external force is charged with maintaining the peace.
12 November 2024
Trump's impact on the rest of the world, and Australia in particular
Somewhat surprisingly, careful analysis and modelling show that Trump’s crude attempt to Make America Great Again, mainly damages the American economy. The rest of the world, and Australia in particular, should proceed with their own business as usual.
9 November 2024
The US election campaign: Lessons for Australia
Just like in the US , the next Australian election will be decided by the cost of living. Both the US and Australian economies have performed quite well, in difficult circumstances. However, the lesson from the US election is that both Governments need to tell their story better.
7 November 2024
Changes to tertiary education funding fail to remedy "stupid inequity" of Morrison era
The changes to Tertiary Education funding announced by the Prime Minister last weekend, mostly benefit former students. Arguably there are other higher priorities to restore the funding of higher education and remove anomalies in the fees charged.
31 October 2024
Peace in Gaza: Part 2
A sustainable peace settlement in Gaza needs to meet the legitimate demands of the key parties, but given their inability to negotiate such an agreement themselves it will need to be proposed and implemented by the US and the major Arab nations under UN auspices.
30 October 2024
Peace in Gaza: Part 1
The death and destruction in Gaza continue, and now in Lebanon as well. There have been peace negotiations for a year, but so far unsuccessful. Today, Part 1 of this article examines why. Tomorrow Part 2 will discuss a possible way forward out of this disaster.
10 October 2024
Productivity growth has slowed: will it recover?
Restoring the rate of productivity growth is critical to future living standards, but unless technological change accelerates living standards may not increase as fast as we are used to in future.
25 September 2024
International comparisons of monetary policy
Much of the expert commentary on Australia’s monetary policy settings is guided by what is happening in other countries. However, monetary tightening can have a markedly different impact in different countries, and while Australia appears to have been more cautious, so far it seems to have managed well.
20 September 2024
Does the Reserve Bank need to change?
Shortly after he became Treasurer, in July 2022, Jim Chalmers announced a review of the Reserve Bank – the first since the current monetary policy arrangements were instituted in the 1990s.
17 September 2024
How to ensure a Gaza ceasefire
We are all appalled by the scale of the deaths and destruction in Gaza. Every day brings more terrible news.
13 September 2024
When should we expect interest rates to fall?
The Reserve Bank has explicitly warned against any expectation that interest rates will start to fall soon. On the other hand, the Treasurer recently claimed that the Reserve Bank is smashing the economy, implying that interest rates should fall soon. Who is right?
9 August 2024
The cost of living crisis is really a housing crisis
The evidence shows that the only households whose living costs have risen faster than their incomes are those homeowners with a mortgage. For the other two thirds of households, their incomes have risen faster than their living costs. Policy should therefore focus on why mortgage costs have risen so dramatically.
26 June 2024
Policy responses to the cost-of-living crisis
Improving housing affordability is the key to resolving the cost-of-living crisis, but the policy options are limited and will inevitably take time to have their desired effect.
25 June 2024
The cost of living and housing affordability
The cost-of-living crisis mainly reflects a decline in housing affordability. A consequence is that this crisis is much worse for middle-income people, who are typically middle-aged, and who are most likely to have a substantial mortgage.
29 May 2024
Clutching at straws: America will not maintain its economic dominance
Although rarely acknowledged, China is the world’s biggest economy, and it will most probably continue to grow faster than the US, its main competitor.
25 May 2024
Dutton’s ignorant, incompetent policies contradicted by evidence
Dutton has finally started to show his hand and build his campaign for the next election around energy policy and housing affordability. The problem is that his ignorance of the evidence demonstrates his incompetence.
18 May 2024
Labor’s 2024-25 Budget: competent but not outstanding
After considering Opposition criticisms, this article concludes that this Budget reflects Labor’s competent economic management. However, a more ambitious tax reform agenda is needed to adequately provide all the services that Australians expect.
30 April 2024
A future made in Australia: Can it work, what are the risks?
Claims that industry assistance comes at a cost to other industries and consumers are too often right. Industry policy should therefore be limited to areas of identified market failure and requires tight evaluation of each case and that performance targets are met.
22 April 2024
Why conventional economic theory is wrong about technological change
Society as a whole has a critical interest in the direction of technological innovation. This cannot be left uniquely to a limited group of capitalist bosses. Consultation with all the key interest groups and government regulation have a critical role to play in ensuring future economic growth and a fair go for all.
20 April 2024
The impact of AI on the labour market and equality
In future AI is the new technology which is likely to have the greatest impact on our economy and our society. But how AI is used and developed is a choice, and so far AI has been predominantly focused on continuing the emphasis on automation. To realise the full potential of AI and minimise its harmful effects there needs to be more public consultation and regulation to determine the future direction of AI.
19 April 2024
Sharing the benefits of technological progress
This is the first of three articles discussing how the benefits of technological progress are shared, and thus determine the distribution of income and influence our economic and social structures. This first article focuses on how these benefits have been shared historically.
4 April 2024
Housing affordability and equality: part 2
Yesterday, Part 1 of this article discussed the decline in housing affordability and the consequent increase in wealth inequality. Today, Part 2 will discuss possible policies to restore housing affordability in the interests of a more equal and cohesive society.
3 April 2024
Housing affordability and equality: part 1
The first part of this article explores how home ownership has become almost impossible for most aspiring first-home buyers and how that is creating a much more unequal distribution of wealth. A second part tomorrow will discuss the policy options to restore home ownership and thus a more equal and cohesive society.
27 February 2024
What does Dutton stand for?
Dutton regularly proclaims what he opposes, but what he will do in terms of new policies mostly remains a mystery or alternatively will not work.
20 February 2024
The future of tax reform
There are recurrent calls for tax reform, but it is typically too difficult to achieve a consensus. However, the necessary action to reduce carbon emissions by introducing a tax on carbon emissions could result in most people being better off and thus achieve broad support.
16 February 2024
Restoring Australias prosperity by becoming a superpower
The debate about climate change is far too often in denial. It needs to change to focus on the positives of how Australia can become a Superpower based on green energy and products that rely on green energy.
9 February 2024
US Intervention to end the war in Gaza
What is almost universally agreed is that an enduring peace settlement for Palestine must be based on a two-State solution. However, getting that settlement accepted will require active intervention by the US to broker the deal.
2 February 2024
Labors rejigged Stage 3 tax cuts benefit 84% of taxpayers
After due consideration of the main criticisms, the Labor Governments rejigged Stage 3 tax cuts seem to be a good way of responding to the cost of living crisis without adding to the Budget deficit and inflation.
22 January 2024
Is China an economic threat?
America insists on treating China as an economic threat, but the reality is that Chinas economic advancement has benefited us all. Instead, the stagnation of wages and manufacturing job losses experienced by Trump supporters in the US largely reflects the impact of technological change.
8 January 2024
'Exceptional' country: Where is US leadership on Palestine?
The US proudly proclaims its exceptionalism and leadership of the free world, but in the latest Israeli-Palestinian flareup US leadership has been absent. A lasting peace settlement will require the US to take the lead in pushing forward the widely supported two-state solution.
20 December 2023
The Albanese Governments economic management and the cost-of-living crisis
The Albanese Governments economic management has been very competent, but unfortunately also marked by a lack of ambition in tackling the challenges facing Australia.
13 December 2023
How to end the war in Gaza
It is urgent to end the loss of life and destruction in Gaza, but as the joint Statement by the Prime Ministers of Australia, Canada and New Zealand recognises, a sustainable ceasefire will require agreement to a balanced set of conditions consistent with eventually achieving a lasting peace based on a two-State solution. This is how to end the war in Gaza.
1 December 2023
The outlook for interest rates
The Reserve Bank is widely expected to increase interest rates further. However, what is now critical to achieving the Banks inflation target is the future increase in labour costs, and this may come down sufficiently without any further interest rate rises.
22 November 2023
The cost-of-living crisis: How should the Government respond?
Living standards have fallen recently. The Albanese Government has responded with targeted assistance, but the policy options to alleviate the damage for working families are limited, especially in the short run. However, one readily available policy option would be to reshape the Stage 3 tax cuts due to take effect next July.
12 November 2023
Gaza: Israel is winning the battle but losing the war
As was to be expected, Israel is winning the battle for Gaza, albeit at an enormous cost in lives. But what are Israels and its backers plans for winning the peace, as without an enduring peace settlement the war can never be won. Is a US-led, UN mandated Trusteeship for Palestine the way forward?