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Author's Name: Lin Crase
Date: Tue 12 Feb 2019

Lin Crase

Professor Lin Crase

Professor Lin Crase is Professor of Economics and Head of School of Commerce. He joined UniSA in February 2016. Prior to commencing at UniSA, Lin was Professor and Director of the Centre for Water Policy and Management at La Trobe University.

Lin's research has focused on applied economics in the context of water. He has analysed water markets and the property rights that attend them, water pricing and numerous applications of water policy. Whilst his expertise includes the Murray-Darling Basin in Australia, he has also worked on projects in south Asia, Japan and Europe. Lin has published over 100 journal articles, numerous book chapters, four books and a range of other papers and opinion pieces.

Subject Area Expertise

Water resource economics; Natural resource economics.

Website

http://people.unisa.edu.au/Lin.Crase


Responses (37)


Budget 2023

Poll 59

Our panellists were asked the following 2023 budget question: "On May 9, the government delivered a budget designed, in the Treasurer's words, to strike a balance between relief, repair and restraint'.  What grade would you give the budget, given that objective: A, B, C, D, E or F?"

Wes Mountain/The Conversation, CC BY-ND - https://creativecommons.org/licenses/by-nd/4.0/

 

Overall rating: C - Keeping inflationary pressures in check: C

C

OVERALL COMMENTS: Some relief, reasonable restraint but very little on repair. A long way to go on the latter. The real highlight is that any government's claims that they 'create' fiscal surpluses solely through their own good management can be put aside - hopefully for good!


How economists would raise $20 billion per year

Poll 58

When panellests were asked to find an extra A$20 billion per year to fund government priorities like building nuclear submarines and responding to climate change, Australia’s top economists overwhelmingly back land tax, increased resource taxes, an attack on negative gearing and extending the scope of the goods and services tax.

Photo credit by Joshua Hoehne on Unsplash

 

Efficiency picks: Introduce or increase land taxes (possibly with cut in stamp duty) Wind back deductions for negatively geared properties Equity picks: Wind back the capital gains exemptions on the family home Wind back deductions for negatively geared properties Introduce inheritance taxes

Efficiency comments: Like most real-life choices, this issue is complicated by the path dependencies of previous choices. Ideally, taxes should be targeted at activities that won't materially change as a result of the imposition of the tax. However, because some 'free kicks' have been built into the system, removing them also makes its way onto this list. The upshot is that some of these choices will cause an adjustment to behaviour, but they are viewed as least harmful compared to the alternatives. Equity comments: Regrettably, we are now in a situation where poverty is substantially inter-generational so measures that span generational inequity are required to make headway on this front.


Leading economists back Federal Government action to curb rising gas and electricity prices

Poll 57

Australia’s top economists have overwhelmingly endorsed intervention to restrain gas and electricity prices, with only three of the 47 leading economists surveyed believing the best thing the government can do is to leave things to the market.

Photo credit: Wes Mountain/The Conversation, CC BY-ND

 

.

Provide information to consumers on using less energy

The standard "no regret" response is to provide public goods, like additional information. Of course, that's not much comfort for many. There's also little comfort in starting a debate about "if only things weren't as market-driven" or "if only government would stay out". The reality is that we have poor outcomes that result from multiple poor choices that span decades. Ideally, when relative prices/technologies change, it occurs in a way that allows people to adapt. In this case, governments have stopped most of the early signals about adjustment, usually for political reasons, so now we face abrupt changes. And we haven't done the hard work to keep our taxation and transfer systems aligned with the way the economy now works, so it's also hard to protect the vulnerable.


Is education or immigration the answer to our skills shortage? We asked 50 economists

Poll 56

Investing in Australians’ education is far more important than immigration in resolving the nation’s skills shortages, according to leading economists surveyed in the lead-up to this week’s jobs and skills summit.

The 50 top Australian economists polled by the Economic Society of Australia and The Conversation are recognised by their peers as leaders in their fields, including economic modelling, labour markets and public policy.

Wes Mountain/The Conversation, CC BY-ND

 

Macroeconomic policy Broader reforms to promote productivity

Broader reforms to promote productivity Productivity gains ? a key to higher living standards ? can't be decoupled from the way broader factors influence incentives. The Australian taxation system embeds many well-known flaws that drive perverse investment behaviors; that's not helping efforts to increase productivity. But reforming taxation is hard, which is why successive governments have simply kicked it down the road. Ultimately, this will have to be tackled, so why not start with the summit?


'It’s important not to overreact’: Australia’s top economists on how to fix high inflation

Poll 55

Australia’s top economists are divided about how to tackle ballooning inflation of 6.1% that’s forecast to climb to a three-decade high of 7.75% by the end of the year.

Wes Mountain/The Conversation, CC BY-ND

 

Longer term there is still a need to deal with low productivity growth There has been no attempt to reform taxation in Australia for many years

2.5%

I suspect there are many in the community who simple cannot remember serious inflation and the broader distortions it creates. At the moment the focus is (rightly) on the pressure on cost of living. Longer term, inflation adds significant cost and risk to a wide range of decisions (including investments) and ultimately that feeds through to lower living standards, especially for the poor. So aiming for an inflation rate that has seen a sustained period of growth in Australia makes sense. That said, there are other challenges. Governments of both persuasions have been reluctant to tackle serious economic reforms, like taxation reform, for several decades. Ultimately that will catch up with us and make the cost of dealing with transient difficult events much higher than it should be.


Prioritising issues for the incoming Government

Poll 54

Panellists were asked: 

"From this list, please pick the three issues you think will be the most important for the incoming government and should be the most important in the election".

Wes Mountain/The Conversation, CC BY-ND

 

.

On tax: governments have largely kicked issues related to tax down the road for years. Accordingly, we have a tax system that poorly aligns with the way income and wealth are currently generated. The (albeit mostly justified) increase in spending and debt make the arguments for tax reform even more compelling. On climate and environment: Despite recent shifts in rhetoric, the economic status of federal environmental programs is poor at best. Lost and misplaced opportunities on climate are obvious to most. The appalling waste and ineffectiveness of the Murray-Darlin Basin Plan is less obvious because it's been raining lately, but will plague society for years to come.


Top Economists see no prolonged high inflation, no rate hike next year (Q4)

Poll 51

Our panellists were asked whether rate hikes would be necessitated in the United States, Britain and Australia.

Despite appearances – especially in the United States – the era of high inflation isn’t set for a comeback in the view of Australia’s leading economists, and most see no need for the Reserve Bank to lift interest rates next year.

Question 4

"Following the next Federal election, the incoming Federal Government should commission an independent Review of the Reserve Bank of Australia."

Photo credit "Wes Mountain/The Conversation, CC BY-ND"

 

Disagree


Top Economists see no prolonged high inflation, no rate hike next year (Q3)

Poll 51

Our panellists were asked whether rate hikes would be necessitated in the United States, Britain and Australia.

Despite appearances – especially in the United States – the era of high inflation isn’t set for a comeback in the view of Australia’s leading economists, and most see no need for the Reserve Bank to lift interest rates next year.

Question 3 

"The Reserve Bank has, over the past 5 years, effectively used the tools available to it to achieve its goals of "maintaining the stability of the currency, ensuring full employment and furthering the 'economic prosperity and welfare of the people of Australia'."

Photo credit "Wes Mountain/The Conversation, CC BY-ND"

 

Agree

7


Top Economists see no prolonged high inflation, no rate hike next year (Q2)

Poll 51

Our panellists were asked whether rate hikes would be necessitated in the United States, Britain and Australia.

Despite appearances – especially in the United States – the era of high inflation isn’t set for a comeback in the view of Australia’s leading economists, and most see no need for the Reserve Bank to lift interest rates next year.

Question 2

"When do you expect the Reserve Bank of Australia to next lift its cash rate?"

Photo credit "Wes Mountain/The Conversation, CC BY-ND"

 

.

6

2023


Top Economists see no prolonged high inflation, no rate hike next year (Q1)

Poll 51

Our panellists were asked whether rate hikes would be necessitated in the United States, Britain and Australia.

Despite appearances – especially in the United States – the era of high inflation isn’t set for a comeback in the view of Australia’s leading economists, and most see no need for the Reserve Bank to lift interest rates next year.

Question 1

"The current combination of Australian fiscal and monetary policy poses a serious risk of prolonged above-target inflation."

Photo credit "Wes Mountain/The Conversation, CC BY-ND"

 

Disagree

6

There's obviously a lot of focus on interest rates at the moment, but a general absence of policy direction on long-overdue productivity improvements and tax reform. The RBA can't be expected to do it all.


Australia’s top economists back carbon price, say benefits of net-zero outweigh cost

Poll 50

Ahead of November’s Glasgow climate talks, our panellists were asked

"Australia would likely benefit overall from the national economy transitioning to net-zero emissions by 2050"

Photo credit "Wes Mountain/The Conversation, CC BY-ND"

 

An economy-wide carbon price (either via a cap-and-trade scheme or an emissions tax)

Agree

Government agencies have an innate capacity built around the big picture outcomes, as they rightly should, especially at the federal level. This is largely why they have a very bad track record for picking localised winners in almost every policy domain that intersects with these types of questions. The less federal governments choose to involve themselves with the technical aspects of the alternatives at a micro scale the better - set the incentives and let those closer to the technology make the choice. That will both save taxpayers money and deliver a better outcome for energy consumers.


Promoting vaccination uptake in Australia

Poll 49

"What measures should Australian governments adopt to promote demand for vaccination once supply is no longer a constraint?"

Photo credit "Wes Mountain/The Conversation, CC BY-ND"

 

Vaccine passports for higher-risk settings (eg. flights, restaurants, major events);National advertising campaigns;Lotteries with cash or prizes for the vaccinated;Mandatory vaccination for higher risk occupations


Policies to deliver higher wage growth

Poll 48

Our panellists were asked

"Higher wages growth is now a top priority of the RBA in its efforts to sustain stronger economic growth. Please identify the three of these government policies you think would best help deliver higher wages growth".  

Photo credit "Wes Mountain/The Conversation, CC BY-ND"

 

.

Measures to boost productivity growth;Measures to boost business investment


Does the budget rebuild our economy and create jobs?

Poll 43

"On 6 October, the Government delivered a budget designed, in the Treasurer's words, to 'rebuild our economy and create jobs'.  What grade would you give the budget given the objective?  A, B, C, D, E, F"

Photo Credit: Wes Mountain/The Conversation, CC BY-ND 

 

C


October Budget 2020 - preferred four programs

Poll 42 

"The October budget will see the government announce additional policies to support recovery.  Please nominate the four programs you think would be the most effective (for an intervention of a given size) over the next two years"

Photo Credit: Wes Mountain/The Conversation, CC BY-ND 

 

Permanently boosting JobSeeker (Newstart) beyond December 31, 2020, Infrastructure projects, Social housing, Funding higher quality aged care


Government Debt during the COVID19 Crisis

Poll 40

"Governments should provide ongoing fiscal support to boost aggregate demand during the economic crisis and recovery, even if it means a substantial increase in public debt"

Photo Credit: Wes Mountain/The Conversation, CC BY-ND 

 

Strongly agree

8

As with all things relating to government, timing really matters. There is a time to reduce public expenditure - but it is not now.


Wage freeze for economic recovery

Poll 39

"A freeze in the minimum wage will support Australia's economic recovery"

Photo credit: Wes Mountain/The ConversationCC BY-ND 

 

Disagree

9


Social Distancing Measures, May 2020

Poll 38

"The benefits to Australian society of maintaining social distancing measures sufficient to keep R<1 for COVID-19 are likely to exceed the costs"

 

Agree

8

Clearly, the cost impacts will vary greatly across individuals and sectors. For individuals with the capacity to work remotely the costs may prove trivial or even give rise to benefits (e.g. reduced travel time). Where this is not the case the impacts on individuals could be severe. It is also the case that the health benefits will likely be influenced by a range of other factors (e.g. degree of compliance). On balance, the Australian economy is well-placed to integrate social distancing - we enjoy geographic and technological advantages not available to others. However, given our status as a small open economy the big question is really about how particular measures adopted abroad impact our capacity to trade.


Sugar sweetened beverage tax for Australia - July 2018

Poll 31

Proposition 1: "The best economic policy instrument available to policy makers seeking to address obesity and related health issues in Australia is the introduction of a tax on sugar sweetened beverages (SSBs)."

Proposition 2: "The health and non-health benefits from a tax on SSBs are likely to outweigh the possible costs felt elsewhere in the economy."

 

1 - Strongly disagree

2 - Strongly disagree


Congestion pricing - November 2018

 

Strongly agree

9


Electric vehicles and road-use pricing - June 2018

Poll 30

"Pricing of road-use for electric vehicles should be the same as fossil fuel-powered vehicles."

 

Agree

7


Gig economy and worker welfare - February 2018

Poll 26

"The wages and conditions of Australian workers providing services in sectors affected by the rapid growth of digital on-demand subcontracting platforms will, on average, be expected to fall without further government intervention."

 

Strongly disagree

9

The supposition that government can somehow shield any set of workers from technological change is very hard to support. This is not to say there is no role for government - rather it's important to acknowledge the limits of the state in (a) predicting some of these changes (b) instigating responses that allow incomes to grow while dealing with potentially excessive inequality.


Journalism as a public good - January 2018

Poll 25

Proposition 1: "The modern phenomena of information overload and social-media-fuelled 'fake news' bring into focus the value of quality journalism. Quality journalism has a public-good dimension that warrants public support."

Proposition 2: "The Australian government presently provides funding for the ABC and SBS, Australia's independent public broadcasters. The Australian government should increase its financial support of quality journalism."

 

1 - Uncertain (neither agree nor disagree)

2 - Uncertain (neither agree nor disagree)

1 - Some information is clearly a public good, but the extent to which it is generated by journalism and the definition of 'quality journalism' is problematic.

2 - Any increased support for the ABC/SBS should be considered in the context of the gains from that investment, relative to other areas of public expenditure. Prima facie plenty of scope exists for diverting monies from other poorly designed projects at national and state levels that currently yield very little public good.


Same sex marriage - November 2017

Poll 24

"Assuming that the law will be changed to allow same-sex couples to marry in Australia, this will generate net economic benefits for the nation as a whole over the next 10 years."

 

Agree

6

Constraints that impinge on individuals' full participation in society necessarily reduce economic welfare. It follows that removal of those constraints should lead to some gains. That said, the change to allow formal recognition of this issue versus the informal workarounds are not likely so different as to generate massive changes on the economic front.


The Finkel Review - August 2017

Poll 21

"The Finkel Review has recommended a mandatory certificate scheme that obliges electricity retailers to purchase a certain proportion of the electricity they sell from sources of electricity whose emission intensity is below a defined level. This is preferable to conventional approaches to the pricing of externalities, such as an emission tax or cap and trade scheme."

 

Strongly disagree

9

Cap and trade remains the  preferred option on economic grounds, although the politics of energy generation in this country makes a first-best solution remote.


Does privatisation of human services hurt outcomes? - July 2017

Poll 20

"For-profit provision of human services like health and education leads to poor client outcomes and high costs to government."

 

Disagree

8

The critical question is 'to what are we comparing?' Benevolent government agencies? The risks of government failure are at least equal to those of market failure and each instance of provision needs consideration on its relative merits.


CGT deductions - March 2017

Poll 16

"Capital gains tax deductions for housing investment should be removed because they overstimulate the housing market, contributing to rising house prices."

 

Agree

8

The rationale for removal of favourable taxation arrangements for specific assets is broader than concerns about high housing prices.


Economics teaching - micro before macro - February 2017

Poll 15

"It is more effective to teach an introductory course in micro-economics first before an introductory course in macro-economics."

 

Agree

9


Australian Federal Budget 2017 - Outsourcing Economic Forecasting - May 2017

Poll 18

"Given the Commonwealth Treasury?s ongoing difficulty in making accurate forecasts of some of the key economic variables underpinning the Budget ? in particular nominal GDP growth ? the Government should ?outsource? the economic forecasts used in framing the Budget to an independent agency (such as the Parliamentary Budget Office), as now happens in the United Kingdom."

 

Disagree

7

The supposition that 'outsourcing' forecasts will lead to better outcomes misses the point. The challenges with public finance relate more to the lack of political will to tackle some of the underlying problems, than any notion that one set of forecasts is superior to another.


2016 US Election - November 2016

Poll 13

"Hillary Clinton is likely to be the superior US presidential candidate for the Australian economy and for Australia."

 

Strongly agree

10


RBA economic growth targets - August 2016

Poll 10

"The Reserve Bank of Australia should be tasked with targeting nominal economic growth rather than inflation."

 

Strongly disagree

8


The Brexit - impact on UK citizens - July 2016

Poll 9

"Assuming it is implemented, Brexit will deliver net economic benefits, on average, to UK citizens within its first 5 years."

 

Disagree

7


Spend on education or business tax cut - June 2016

Poll 8

"Australia will receive a bigger economic growth dividend in the long-run by spending on education than offering an equivalent amount of money on a tax cut to business."

 

Uncertain (neither agree nor disagree)

9

Education adds to productivity (amongst others) but that doesn't automatically arise from an increase in spending on education by government. Clearly, it depends on how the money is spent. The same caveat applies to tax cuts - i.e. the basis and criteria for the cuts will determine their impact.


Efficiency of tax Government investments in major sporting events - February/March 2016

Poll 5

"Government investments in major sporting events usually generate net benefits for the city or region where the investment is made."

 

Uncertain (neither agree nor disagree)

8

It's not always clear who are the winners and losers as much of the detail is suppressed. In any case this represents a redistribution of any benefits rather than 'new' benefits per se. In addition, the market failure that justifies government intervention in this domain is generally missing from the debate.


Efficiency of tax incentives - February 2016

Poll 4

"New tax incentives for investments in technology and innovation businesses and start-ups are likely to be inefficient."

 

Agree

9


Bah Humbug Australia - December 2015

Poll 3

"Giving specific presents as holiday gifts is inefficient, because recipients could satisfy their preferences much better with cash."

 

Strongly disagree

9

In a conventional sense, recipients of benefits are better off with cash. However, in the case of 'gifts' there are at least two additional considerations. First, if recipients do not fully understand their own preferences (i.e. have imperfect knowledge) a friend may do a better job by providing a gift than we can do ourselves - some friends know us better than we know ourselves. Second, efficiency is about the overall welfare of society. In many cases giving a gift provides welfare to the giver so any efficiency analysis needs to account for the welfare that attends altruism. This hinges on the extent to which givers feel happier about giving a gift versus cash and will obviously be context specific.


Penalty Rates Reform - November 2015

Poll 2

"Aligning Sunday penalty rates for hospitality, entertainment and retailing industries with the current levels for Saturday, as proposed in the Productivity Commission's draft report, will lead to more employment and greater availability of services in these industries on Sundays."

 

Uncertain (neither agree nor disagree)

7

The presumption in this statement seems to be that all services in these sectors are equivalent and that labour is easily deployed to various tasks across them. Whilst this policy change would likely put downward pressure on pay rates, highly skilled practitioners in these sectors (many of whom may be in scarce supply on Sundays) should have some bargaining power. This also raises questions about the quality of service received on different days (depending on the service being provided of course and the skill levels required) and the willingness of customers to accept variations. "Greater availability of service" might not translate to "greater availability of the same service".