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
2 November 2023
The structural challenges facing the Chinese and American economies
The two major economies, China and America, have severe structural imbalances between their savings and investment, which could significantly damage their medium-term growth prospects, with consequences for the rest of the world.
1 September 2023
Australias fiscal challenge
Productivity growth will be less than projected in the Intergenerational Report, the budget deficits will be worse, and the Government should be setting the scene for raising more revenue.
22 August 2023
The APS: Balancing responsiveness and independence
Since the Robodebt saga there have been many calls for a more independent public service that can be trusted to provide competent advice frankly and fearlessly. In that case a key issue is how departmental secretaries are appointed and dismissed.
18 August 2023
Pearls and Irritations: A unique source of independent comment and analysis
Pearls and Irritations is a unique source of independent comment and analysis. Readers know that they will learn more and have a better and different understanding of important policy issues than is available from the mass media.
26 July 2023
The RBA is on a knife-edge between recession and inflation
Monetary policy operates with a lag. The pain from increased interest rates is only now starting to really bite. However, the substantial increase in interest rates is reducing demand and thus bringing inflation down. While on the other hand, further interest rate increases add to the risk of a recession. It is time therefore to pause further increases in interest rates.
23 July 2023
The cost of living crisis so what would Dutton do?
Peter Dutton incessantly declaims about the cost of living crisis, blaming the government. But what would he do instead?
12 July 2023
Robodebt and the APS
The Robodebt scandal reflects badly on the Australian Public Service generally, and not just on those immediately responsible.
5 July 2023
Corruption and the expenditure of public funds
Although Gladys Berejiklians intervention to fund projects in her boyfriends electorate may not have been illegal, it should have been. The legislation and rules governing the financial management of public programs should be tightened to prevent such pork barrelling.
30 June 2023
Why the RBA should pause interest rate increases
Inflation is starting to come down. The main reason cited for a further increase in interest rates is the fear of a wage-price spiral. But this is no longer likely. Instead, it is time for a pause in interest rate rises to better assess the future economic outlook.
15 June 2023
Australias international strategy
America is no longer the dominant hegemon in our region. In its place Australia can and should play an important role in establishing a true multipolar system of governance. But that will first require Australia to resolve the present contradiction between our foreign and defence policies.
14 June 2023
Why is America so reluctant to acknowledge Chinas economic power?
The statistical evidence clearly shows that China is the world's number one economy. Unfortunately, the US and many commentators are unwilling to acknowledge that reality, but the future stability of the region depends on acceptance that we are living in a multipolar world.
12 May 2023
A competent budget that advances a Labor agenda
Labor has produced a responsible Budget that balances the need to advance traditional Labor priorities while also bringing inflation down. But there remains more to do.
1 May 2023
Will Labor's Budget prioritise public services and a caring society?
The biggest choice facing this country is between poor public services and inadequate government income support or more taxes. Unfortunately, I fear that next weeks Budget will seek to avoid this choice.
27 April 2023
RBA reforms: what difference will they make?
The reforms recommended by the Review of the Reserve Bank have been well received, but it is questionable whether they will ensure that the Banks performance improves and that it can avoid the mistakes of the recent past.
25 April 2023
Why have living standards stagnated and inequality increased?
Failure to adequately tax mining super profits has greatly damaged the Australian economy. Living standards have stagnated in the last decade or so, while inequality has increased. This article argues that the two are related and that the concentration of profit growth in the mining sector is an obvious reason why the increase in inequality was so much worse here in Australia than elsewhere.
21 April 2023
AUKUS and Australias national sovereignty
The value of AUKUS depends critically on how far it increases the chances of Australia being dragged into an unnecessary and potentially catastrophic war at the behest of the US.
13 March 2023
The SMH and Age Red Alert is unwarranted and dangerous
The articles published last week by the SMH and Age under the heading, Red Alert, are deeply flawed. The intent seems to panic us into war. But the many assertions are not supported by evidence or credible argument.
6 March 2023
How best to tackle inflation
After nine successive increases in the Reserve Banks cash rate, this article argues that it is time to pause. In addition, given the sources of increased inflation, more targeted measures are called for rather than the blunt instrument of further interest rate increases.
3 March 2023
Superannuation tax changes and budget repair
The very modest superannuation changes have been well received by most people, but the worry is the unwillingness of the Government to acknowledge, let alone tackle, the much bigger fiscal challenges that lie ahead.
10 February 2023
A sovereign SSN capability and Australias national security strategy
There is no way that the UK or the US would ever contemplate surrendering sovereignty over the control of its military operations to any other power. Australia should not either. If Australia is to acquire a fleet of SSNs, the government needs to negotiate an agreement that avoids counter-productive short cuts and ensures sovereign control of what would be an immensely valuable capability for the Royal Australian Navy.
9 February 2023
Hard power and Australias national security strategy
The previous two parts in this series addressed soft power and Australias alliances respectively. The focus of Part 3 is hard power and a discussion of self-reliance and Australias evolving military strategy.
8 February 2023
The role of alliances in Australias national security strategy
While alliances and treaties offer some protection against an aggressor, they cannot be counted upon. Australia needs to maintain an independent military capability to deter possible future threats to our independence not least because we cannot rely on the US in all possible future circumstances.
7 February 2023
Australias National Security Strategy
To paraphrase former US President, Theodore Roosevelt, Australias national security is best achieved by talking softly while carrying a formidable stick as a deterrent.
6 February 2023
Jim Chalmers' manifesto in favour of values-based capitalism
The Treasurer, Jim Chalmers', recent essay in The Monthly explores the relationship between the state and the private sector, and how that matters for the problems of our time.
27 January 2023
Economic growth and our environmental future
A spate of articles have argued protection of the environment is incompatible with population and economic growth. But they do not address how to stop this growth and its public acceptability, nor how more determined efforts to protect the environment can succeed.
22 December 2022
What does Robodebt say about the APS policy advising capability?
The Royal Commission has focused on the legality of the Robodebt scheme, but the failure of policy judgment and advice seems at least as damaging.
5 December 2022
Facing a global economic slowdown, the Labor government will need a new strategy to rise to the economic challenges ahead
The Albanese Labor Government has had a very good first six months, however the challenges that lie ahead will be much more demanding. The Government needs to articulate its vision of how our social cohesion depends upon creating an Australian society that is caring and with reasonable equality of opportunity as the foundation for why public expenditure and additional tax revenue is necessary.
28 November 2022
Morrisons self-appointment to administer six departments
Morrisons self-appointment to six portfolios says a lot about his contempt for the quality and integrity of decision making under his government. The response by PM&C officers, who were in the know, also raises questions about how adequately they exercised their responsibility for good government.
18 November 2022
Employers cry wolf once again
Low wage growth has held the Australian economy back. Contrary to the employers scare campaign, the Governments proposal to facilitate multi-employer bargaining offers the prospect of some improvement, especially for those employees whose bargaining position is weakest.
7 November 2022
Budget Repair: Tax increases or expenditure cuts?
The Treasurer wants a national conversation about how best to repair the Budget. But that conversation will only help if it is based on a realistic analysis of the difficulties involved in achieving lower spending and therefore why tax increases must be on the agenda.
27 October 2022
The Albanese Governments first budget: so far so good
As best can be judged at this point of time, this Budget gets the balance right between the need to bring inflation down while avoiding a recession. But many difficult decisions lie ahead.
21 October 2022
What do we need from next weeks Budget? An increase in tax revenue
The biggest budgetary challenge is to correct the inadequate funding of essential services. Hopefully this Budget will help initiate the necessary national conversation to correct this fundamental defect. In short, a significant increase in tax revenue is required.
8 September 2022
What can we expect following the Jobs and Skills Summit?
In contrast to the policy vacuum left by the previous Morrison Government, Labors Jobs and Skills Summit has paved the way for Australians to work constructively together on the challenges facing the labour market and the economy. For reasons of space, this present review focuses on the major policies announced at the Summit and their likely impact.
25 August 2022
Many jobs summit ideas for lifting wages dont make sense upskilling does
Treasurysissues paperfor the jobs summit says fair pay and job security strengthen communities, promote attractive careers and contribute to broad-based prosperity.
5 August 2022
Monetary Policy: How far will interest rates need to rise and how fast?
In response to higher inflation since the beginning of May the Reserve Bank has aggressively increased interest rates, albeit from an exceptionally low level. From here on, however, a more cautious approach is needed.
21 July 2022
A way forward with Labors climate change legislation
Effective action against climate change requires Labors legislation. Hopefully the compromise necessary to pass this legislation can be achieved if the target set is for the minimum reduction in carbon emissions required.
27 June 2022
Rising interest rates will there be a soft landing?
Inflation is outside the target zone in all developed economies. Central banks are responding by increasing interest rates. But the critical question is whether monetary policy can bring inflation down without causing a recession.
21 June 2022
The Outlook for Living Standards: Part 3
Previously Part 1 of this article assessed the impact on living standards from surging prices relative to wage growth, and rising interest rates. Yesterday, Part 2 considered what the new Labor Government can do to lift the rate of wage growth relative to prices. Today, Part 3 discusses how best to respond to the two principal drivers of the increased cost of living fuel and energy costs and housing costs.
20 June 2022
The Outlook for Living Standards: Part 2
Yesterday Part 1 of this article assessed the impact on living standards from surging prices relative to wage growth, and rising interest rates. Today, Part 2 will consider what the new Labor Government can do to lift the rate of wage growth relative to prices, and tomorrow Part 3 will consider how best to respond to the two principal drivers of the increased cost of living fuel and energy costs and housing costs.
19 June 2022
Michael Keating-The Outlook for Living Standards: Part 1
A critical challenge facing the new Labor Government is its response to the upsurge in inflation and the threat to living standards. In Part 1 today this article discusses the dimensions of this challenge. Parts 2 and 3, tomorrow and the next day, will consider possible government responses.
14 June 2022
The future budget outlook
As the Treasury Secretary, Steven Kennedy, made clear last week the future Budget outlook is exceptionally difficult. He noted the pressures to raise more revenue over time and saw no scope to lower taxes in future.
18 May 2022
A comparison of Labor and the Coalitions policies to assist first home buyers
Australia has a problem of housing affordability, but it is mainly concentrated among the poorest young families. Labors housing policies are better directed to improving their equality of access, but neither of the major political parties policies are adequate to the task.
17 May 2022
Why this election campaign is so disappointing
Proposals for policy reforms in this country are most often hamstrung by the lack of government revenue required to implement them. Unless this impediment is overcome, many very worthwhile proposals for reform will continue to be ignored.
13 May 2022
Wages and the cost of living
An increase in the wages of the lowest paid employees, so that they can keep pace with the cost of living, is unlikely to lead to higher unemployment. Instead, it may well help improve overall economic outcomes.
8 May 2022
Government Integrity and an ICAC
There is a legislated process prescribing how government grants should be administered, but it clearly is not being followed and we need an integrity commission to enforce it.
6 May 2022
The Coalition is guaranteeing essential services and lower tax. We cant have both
In the midst of Labors campaign about thecost of living, the Coalition has zeroed in on one of those costs taxes and guaranteed to stop them rising.
26 April 2022
The funding of essential services
The key purpose of a governments budget is to propose the spending on essential government services and how that spending will be financed. Judged by this standard, the latest Budget is completely inadequate and belies the claims of the Morrison Government to be competent economic managers.
25 April 2022
How competent is Scott Morrison as a manager of government business?
Scott Morrison wants the election to be about competence, but an examination of his record suggests that he is not capable of delivering good government.
22 April 2022
The deterioration in housing affordability and its impact on living standards
The huge increase in dwelling prices was made possible by ultra-low interest rates. Now the prospective rise in interest rates is likely to have a much bigger impact on many borrowers future living standards than previously experienced, and the demand for rental accommodation is also likely to increase faster than in the past.