Economy
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Michael Keating. The Government’s mid-year Budget Update. Part 1.
What does it say about the government’s fiscal performance? The headline news is that the Budget deficit for the current fiscal year, 2014-15 has blown out by $10.6 bn from $29.8 bn in the Budget to $40.4 bn in the Mid-Year Economic and Financial Outlook (MYEFO) released on Monday. Over the four years to 2017-18 Continue reading »
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Max Corden. Australia needs higher taxes, not spending cuts.
The federal budget balance is expected to deteriorate. The reasons are numerous but, in a lengthy statement, the government sums it up in terms of two key factors. These are: the softer economic outlook; and unresolved issues inherited from the former government. The economy is going through a transition. A decline in resources investment will Continue reading »
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John Menadue. The dog’s breakfast in co-payments has got worse.
The government is trying to dump its co-payment mess on to doctors. If doctors decide not to absorb the reductions in the Medicare rebate, many will pass it on to patients and dramatically reduce bulk billing. What a mess! In justification for their ill-considered GP co-payment in the budget, the Minister for Health Peter Dutton Continue reading »
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Tim Colebatch. The Abbott budget is hard to sell.
The Abbott government’s problems began long before the 2014–15 budget, but now the budget is at the heart of them. It has failed to win support from the voters, and failed to win support from the Senate. Why? I think there are two reasons. The first is that its measures, taken together, fail the test Continue reading »
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Australia is worst performing industrial country on climate change.
For the Lima Conference on Climate Change that has just begun, a report by the think-tank Germanwatch and Climate Action Network Europe examined the 58 emitters of greenhouse gasses in the world, and about 90% of all energy-related emissions. The report named Australia as the worst performing industrial country in the world on climate change. Continue reading »
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John Menadue. The smoko continues.
In April 2012 Greg Dodds and I posted an article on this blog ‘The Australian Century and the Australian smoko’. We argued that while we responded well to the opportunities in Asia for over a decade in the 1980s, we went on ‘smoko’ from the mid-1990s. There was widespread complacency and fear of Asia was Continue reading »
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Michael Keating. Capitalism and the Economy.
As both John Menadue and Ian McAuley have argued in recent posts there are good social reasons for governments to intervene to modify the outcomes from a purely capitalist economy. Right now rising inequality and taxation avoidance by companies and wealthy people are priority issues that should be addressed. It is also possible that the Continue reading »
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John Menadue. Our ‘best friend’ in Asia is in trouble.
Japan now faces its fourth recession since 2008. The Japanese economy has contracted in 13 of the last 27 quarters. In effect, there has been no growth for six years. The Japanese economy has been moribund for two decade. So far Abenomics is not delivering as Prime Minister Abe had hoped. His attempt at money-creation Continue reading »
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Lifters and leaners in tax.
In the SMH today (27 November 2014), Michael West has a very interesting story about the leaners and lifters in the business community and the unfairness of tax avoidance by some companies. It clearly works to the disadvantage of many Australian companies who are paying fair rates of taxation. For the link to this story, Continue reading »
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John Menadue. Capitalism, inequality and taxation.
In his challenging series last week on ‘Is capitalism redeemable’ Ian McAuley drew attention to how growing inequality is the cause not only of serious social concerns, but it is also presenting us with some quite serious economic problems. There is not much doubt that in the US, the growing tax concessions for the wealthy Continue reading »
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Geoff Hiscock. Cleaning up the coal energy pillar a central task for Modi and Abbott
Narendra Modi and Tony Abbott explicitly defined energy as a “central pillar” of the India-Australia economic relationship in their joint statement this week. That’s a good sign, but if they want to make a truly significant contribution to the long-term economic and social benefit of India and Australia, then they need to deliver forcefully and Continue reading »
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Ian McAuley. Is capitalism redeemable? Part 8: Inequality’s downward economic spiral
Let’s start with what looks like a self-evident proposition. “Countries with right-wing or neoliberal governments spend less on social security than countries with more left-inclined governments.” It’s a proposition university lecturers put to students of public economics, and the smarter students usually recognize that there’s a trick in it. Harvard economists Dani Rodrik and Alberto Continue reading »
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Ian McAuley. Is capitalism redeemable? Part 7: Inequality – a shameful waste
“Australia’s program to increase world growth seems to be to cut social security benefits from the poor.” When Geraldine Doogue asked Malcolm Fraser to comment on Abbott’s G20 agenda, that was his summary of the present Government’s economic policy Unfortunately, ministers such as Hockey and Cormann may not understand the sarcasm in his comment, because Continue reading »
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Walter Hamilton. Japan: when in doubt, call an election
Japan, Australia’s second biggest export market, has fallen back into recession. Prime Minister Shinzo Abe has reacted by calling a snap election for mid-December, a year ahead of schedule, claiming he needs a new mandate to tackle the nation’s economic problems. Trade deals or talk of trade deals between Australia and both China and India Continue reading »
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Is capitalism redeemable? Part 6: Inequality – it ain’t fair
We get a laugh out of the Monty Python sketch of four Yorkshiremen competing with one another to tell stories of the hardship they endured when they were children, 30 years earlier – “you think you had it tough …”. Without going into Pythonesque exaggeration, four older Australians could easily recount similar stories. If they Continue reading »
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Tony Abbott and the G20
In the media in the past few days we have been overwhelmed by stories and photo opportunities from the G20 in Brisbane. It will take some time to sort out fact from spin. I have set out below some comments and opinions from observers. It provides a useful but only partial account by observers of the Continue reading »
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Bruce Duncan. Pope runs moral template over G20.
Pope France outlined a sharp moral template for world leaders at the G20 meeting in Brisbane. In a letter on 6 November to the current chair of the G20, Prime Minister Tony Abbott, the Pope warned that “many lives are at stake”, including from “severe malnutrition”, as he highlighted the values and policy priorities needed Continue reading »
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Ian McAuley. Is capitalism redeemable? Part 5: When finance goes its own way
One of the world’s most useful social institutions is money, but it’s hard to think of it in its social context. To understand the social value of money, think of a world without money, or a country where, through recklessness the currency has been debased, as happened in the hyperinflation in the Weimar Republic in Continue reading »
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The G20 economies.
The link to The Conversation below, provides a useful summary of the G20 and its member economies, e.g. The G20 economies represent 65% of the world’s population, 79% of world trade, 84% of the world economy and 77% of world carbon emissions. Australia rates number 3 in GDP per capita based on purchasing power parity. Continue reading »
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Ian McAuley. Is capitalism redeemable? Part 4: Moral conflicts
Luxembourg (more properly the Grand Duchy of Luxembourg) is one of Europe’s smallest sovereign nations, both in population (about the same as Tasmania’s) and area (about one thirtieth of Tasmania’s). Many Australians might have driven right through it, not realizing that in a half hour or so they had crossed a whole nation. If corporate Continue reading »
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Ian McAuley. Is capitalism redeemable? Part 3: Why tax avoidance is bad for business
One article of faith in the corporate sector is that low taxes are good for the economy – not only low corporate taxes but also low taxes in general. Echoing this sentiment, Treasurer Hockey and other spokespeople for the Government repeatedly promise to cut taxes. Even suggestions that the GST should be increased are set Continue reading »
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Frank Brennan SJ. The G20 Agenda and Pope Francis
The leaders of the world’s 19 largest economies (together with the EU) are meeting in Brisbane this weekend at the annual G20 meeting. Australia is the host and Prime Minister Tony Abbott is the president this year. The host country gets to put its stamp on the agenda. Last year at St Petersburg, the G20 Continue reading »
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Global Pulse Magazine
You can now subscribe to Global Pulse Magazine. Global Pulse Magazine which you can view at www.globalpulsemagazine.com was launched on September 29 and for the last month has been free to visit. We invite you to subscribe at and receive daily newsletter. Just go to the homepage of www.globalpulsemagazine.com and at the top right hand Continue reading »
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Ian McAuley. Is capitalism redeemable? Part 2: Karl Marx’s and Henry Ford’s shared understanding
Karl Marx was the intellectual father of communism, grandson of a rabbi. Henry Ford was the quintessential American industrialist, anti-union and anti-Semitic. They shared one insight, however. They both knew that capitalism could destroy its own markets. A plentiful supply of workers would keep wages low, to the benefit of industrialists. But those same industrialists Continue reading »
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Ian McAuley. Is capitalism redeemable? Part 1: From markets to market societies
Republican victories in the US midterm elections have given conservatives a psychological boost, just days before the twenty-fifth anniversary of the fall of the Berlin Wall. (For the record, the 1989 collapse of European communism was a victory for those Germans, Hungarians and others who risked all to stand up against tyranny, but it has Continue reading »
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As the Berlin wall fell, checks on capitalism crumbled.
The Economics Editor of the Guardian, Larry Elliott, describes how capitalism is facing an increasing crisis. He says that after the fall of the Berlin wall, we have seen the dark side of the post-Cold War model. Instead of trickle-down, there has been a trickle-up. Instead of the triumph of democracy there has been the Continue reading »
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Michael Keating. Rebalancing government in Australia. Part II
Taxation Reform and Vertical Fiscal Imbalance Another third and final reason for national government pre-eminence over the States in our federal system is of course the national government’s domination of taxation, widely described as ‘vertical fiscal imbalance’ or VFI. Paul Keating called VFI the glue that holds our nation together, but for the States and Continue reading »
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Michael Keating. Rebalancing government in Australia. Part I.
The Future of Federalism Tony Abbott recently announced that he wants ‘to create a more rational system of government for the nation that we have undoubtedly become’. As Abbott describes it, achievement of this more rational system is dependent on developing a consensus based on ‘a readiness to compromise and mutual acceptance of goodwill’. Understandably the Continue reading »
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Walter Hamilton. Calling up the reserves.
Japan’s central bank, 18 months into a monetary stimulus strategy of unprecedented scale, has decided to dramatically raise the bet. Since an extra 60 trillion yen annually fed into the economy failed to do the trick, perhaps 80 trillion (A$800 billion) will work. The look on the face of central bank chief Haruhiko Kuroda when Continue reading »
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John Menadue. Australian business is ‘too risk averse’
In August this year the Governor of the Reserve Bank of Australia, Glen Stevens, told a Parliamentary hearing that Australian companies were being ‘too risk averse’ by focusing on sustaining a flow of dividends and returning capital to shareholders rather than investing in future growth. Research by Credit Suisse shows that non-financial companies in the Continue reading »
