Economy
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Max Corden. Without revenue, Australia can only have half a budget debate.
The missing element in this week’s mid-year economic and fiscal outlook, and more broadly, in current government policy, stares Australians in the face. Revenue needs to be increased. Increasing taxes, reducing tax concessions and eliminating loopholes are all options, which I and other commentators have argued for. For example, journalist Peter Martin has shown that Continue reading »
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John Menadue. Is the state being captured by special interests?
In his recent book, ‘The Origin of Political Order and Political Decay’ Francis Fukuyama of ‘End of History’ fame, focuses on how even developed and democratic societies can be captured by powerful vested interests. He suggests that this has happened in the US with the coalition of extremists in big business, the Republican Party and Continue reading »
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The Chinese are coming.
After WWII the financial hegemony of the US and Europe in the IMF and International Bank was established. Later, the Japanese came to dominate the Asian Development Bank. That is now being challenged by China. See article below by William Pesek in ‘Bloomberg View’, subject ‘China steps in as world’s new bank’. John Menadue. http://www.bloombergview.com/articles/2014-12-25/china-steps-in-as-worlds-new-bank Continue reading »
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John Menadue. Our love affair with cars.
We are infatuated by the convenience of our cars, particularly at holiday time. There are clearly major economic and social benefits but the costs both economic and social are going to become much more apparent. How can we continue to realise the benefits of car travel, but minimise future costs. There are enormous political problems Continue reading »
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Glencore buying Rio Tinto could burn hole in Hockey’s pocket.
In the SMH on December 20, 2014, Michael West draws attention to Glencore’s checkered history on paying tax and the consequences for Joe Hockey’s budget if Glencore acquired Rio Tinto. Michael West said that ‘billions of dollars in tax payments are on the line, not to mention job losses and the spectre of this country Continue reading »
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John Menadue. Capitalism and the fall of communism
In this blog on 5 November I drew attention to an article by the Economics Editor of the Guardian Larry Elliott. In that article Elliott said “As the Berlin Wall fell, checks on capitalism crumbled.” The principal thesis of that article was that with the end of communism capitalism became more aggressive and less inhibited. Continue reading »
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Luigi Palombi. It’s time to fix the free trade bungle on the cost of medicines.
Ten years on from the Australia-US Free Trade Agreement, Australia is entering another round of negotiations towards the new and controversial Trans-Pacific Partnership. In this Free Trade Scorecard series, we review Australian trade policy over the years and where we stand today on the brink of a number of significant new trade deals. Negotiations for Continue reading »
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Michael Keating. The Government’s mid-year budget update. Part 2.
Where to from here? So what is the Government’s strategy to return the Budget to return to surplus as the government has promised over the medium term? The May Budget was almost universally criticised for its unfairness. While restoring fiscal health of the nation may require sacrifices, the evidence clearly showed that in the May Continue reading »
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Hazel Moir and Deborah Gleeson. Evergreening and how big pharma keeps drug prices high.
Efforts by pharmaceutical companies to extend their patents cost taxpayers millions of dollars each year. In some cases they also mean people are subjected to unnecessary clinical trials. Big pharma makes big profits. Their useful new drugs are patented, protecting them from competition and allowing them to charge high prices. When the patent ends, other Continue reading »
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Hazel Moir, How trade agreements are locking in a broken patent system.
Ten years on from the Australia-US Free Trade Agreement, Australia is entering another round of negotiations towards the new and controversial Trans-Pacific Partnership. In this Free Trade Scorecard series, we review Australian trade policy over the years and where we stand today on the brink of a number of significant new trade deals. Australia has Continue reading »
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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 »