Alison Booth

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: Wind back deductions for negatively geared properties Increase resource taxes Tax windfall profits Equity picks: Tax windfall profits Wind back superannuation tax concessions Increase resource taxes

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

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Increase taxation of resource rents for gas producers and use proceeds to reduce electricity and gas

Picking a single policy from this list doesn't make sense, as Chalmers also makes clear in his statement that "any responsible government... needs to consider a broader suite of regulatory interventions than they might have considered in years gone by". My recommendation would be to utilise the following policies: (i) resource taxes (ii) windfall tax for oil and gas producers, given global energy price hikes (iii) the use of WA's 'trigger mechanism' to ensure there's supply to home-based consumers (iv) expand subsidies for renewables like solar, wind, hydrogen and battery storage The goal is to cushion Australians from the misery associated with a declining standard of living as energy costs rise, while at the same time providing an affordable alternative to coal, gas and oil and doing some heavy lifting to reduce our deplorable carbon emissions.

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

Green jobs Care jobs Equal opportunities and pay for women

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

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Poll 52

"What do you think the intake of permanent migrants should be in coming years"

Australia’s leading economists have overwhelmingly endorsed a return to the highest immigration intake on record, saying Australia should aim for at least 190,000 migrants per year as it opens its borders, up from the target of 160,000 per year set ahead of COVID.

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

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Less than 160,000

Tossing numbers around in this context is superficial. For this reason I have. checked the lowest numbers box. One cannot consider this topic without thinking also about what the optimal population levels should be for an arid country like Australia. We want not only to maintain our standard of living but also to prevent this continent being destroyed through environmental degradation. Growing population numbers puts pressure on fragile resources and infrastructure, and we need slow population growth to manage our fragile resources better - much better. (And at some point we may need to open our borders to refugees from Pacific Islands whose land is being inundated by rising sea levels.) In addition, why do we need population growth? Many smaller countries ? like some of those in Europe ? have managed to have high GDP growth rates with a static population, so it?s not clear why we need high population levels to increase growth. Increasing productivity and education levels might be alternative strategies. Other issues that should be considered before determining the number of permanent visas are net population flows ? immigration and emigration.

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

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

10

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"

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6

2023

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

9

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

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"

Mandatory vaccination for higher risk occupations;Vaccine passports for higher-risk settings (eg. flights, restaurants, major events)

We will soon have an ample supply of vaccines. Since we need to consider the social good as well as that of the individual, I would advise implementing the following as soon as possible. (i) Vaccine passports for higher risk settings (people can always choose not to visit these higher risk settings if they don't want to be vaccinated). My guess is that the vast proportion of the population would be happy with this. (ii), mandatory vaccination for higher risk occupations (health, quarantine workers and the like) There are interesting issues for other workers of high mobil ? eg plumbers who work across multiple locations, taxi drivers etc. If there were vaccine passports, potential users could request to view the vaccine passport of such workers. One can imagine getting into a cab in which the driver displays not only has his/her cab driver licence but also his/her vaccine passport.

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"

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Measures to boost productivity growth;Maintaining high government spending in order to boost aggrega

Poll 47

This month, our panellists were asked whether Australia should take action to speed the transition to electric cars.

"As part of efforts to reduce carbon emissions, Australian governments should take action to accelerate the take up, or take no action to accelerate the take up of electric cars"

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

Remove the luxury car tax from all-electric cars, Subsidise public charging points for electric cars, Set a date to ban the import of petrol and diesel cars

7

Set a date to ban the import of petrol and diesel cars. Also (i) introduce an export ban on our petrol and diesel cars to prevent dealers exporting them to developing countries (ii) introduce a scrapping subsidy for diesel and petrol cars.

Poll 46

"On May 11, the government delivered a budget designed, in the Treasurer's words, to 'secure Australia's economic recovery and build for the future'.  What grade would you give the budget given that objective, A, B, C, D, E, F?"

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

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C

What was missing: ? Climate change and environmental issues. Given the government is spending to provide jobs and avoid recession (great idea), why not spend on innovation and works with a high marginal social value and with longer term as well as short term goals? ? In addition, why not consider expanding the tax system on eg resources taxes, carbon pricing and in so doing not only expand the tax base but also meet our international responsibilities wrt climate change? ? Vaccine rollout and further development of a vaccine manufacturing base. Given quality of our medical and related researchers, worth investing in them to make us, if not world leaders, then at least not world laggards. ? More quarantine facilities. Important, given the likely future for further pandemics. (Howards Springs quarantine facility took over Inpex?s buildings. Are there more ?villages? like that that could be exploited? If not, why not build some remotely? Or close down a few coal mines and put returning Australians into fly-in, fly-out facilities for workers?) ? Arts funding. The arts sector is labour-intensive. It employs more workers than coal mining. What the budget did for some arts institutions was good as far as it went, but it could go further. ? University funding. Blindingly obvious but see the points above.

Poll 44

"Ahead of a decision about any permanent increase expected early next year, The Conversation and the Economic Society of Australia asked 45 of Australia’s leading economists where they thought JobSeeker should settle."

Remain indexed in line with the CPI

The reduced Jobseeker allowance is insufficient to cover recipients' subsistence and maintenance costs. (See ANU's Ben Phillips recent report for estimates of the numbers who will fall into poverty as a result of this policy change of cutting the allowance.) In view of the level of uncertainty about the economy and COVID-19, and the difficulty of finding working in this uncertain climate, the Jobseeker allowance should stay at its current level at least until the vaccination program has been implemented and the level of uncertainty reduced. It also should not be forgotten that recipients' expenditure from the allowance not only helps them maintain their health but also feeds back into the economy. Whether Jobseeker is indexed in line with the consumer price index or in line with wages is of second order importance at this time, though I have a slight preference for keeping it indexed to the CPI.

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

The budget contained some sensible measures (such as tax write-offs for business investments and wage subsidies for young people), but there are some major omissions and a real lack of imagination. In particular, the budget largely ignored investment in the renewable energy sector as a way to boost the economy, and it chose not to consider incentives to boost clean energy technology. The budget also largely ignored sectors of the economy that have been hardest-hit by the pandemic (which are predominantly female), and neglected to consider affordable childcare, higher education, the arts and admin sectors and permanently boosting jobseeker payments, all of which would potentially boost the economy.

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 

Infrastructure projects, Social housing, Incentives for renewable energy, Increasing subsidies for child care

Poll 41

"The legislated increases in compulsory super contributions, which are set to climb from 9.5% of wages to 12% over the next five years should...."

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

Be deferred

10

Now is not a good time to introduce these changes, with an employee?s redundancy probability likely to increase (and/or his or her hours of work reduced) if this reform is brought in when currently scheduled. I would recommend delaying for a year or two until the economy is in better shape.

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

10

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"

Strongly agree

9

It is vital to relax social distancing slowly in order to monitor infection rates, gain more information about the pandemic and its behaviour, avoid the costs of having to reimpose tighter restrictions, make sure we have plentiful supplies of protective equipment, target research to vaccination development and also treatments so we are prepared in case (as is likely based on other countries? experiences) R starts growing again. At the same time, policy should be directed towards cushioning the impact on the less well-off of this major shock to our economy. For example, we should think about an intergenerational compact - which is to say how the winners of continued lockdown (the older folk, typically) might compensate the losers (the younger folk, particularly those in insecure employment whose prospects are so poor). Policy should also be working to restructure our economy in imaginative - and social-welfare enhancing - ways, as has sometimes occurred in postwar reconstruction. This could be done to take into account the goal of reducing climate change, which could well be our next big shock to the economy.

Poll 39

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

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

Disagree

7

It is not a good time to freeze the pay of employees covered by the minimum wage (the majority of whom are female), and many of whom contributed to helping keep the economy ticking over during lockdown (think health-care workers, school and hospital cleaners, supermarket staff, distribution etc., all vital to our society during the pandemic). At a minimum the minimum wage should be maintained in real terms in order to allow covered workers to maintain their usual consumption bundles. This will also help the economy. This is one of those partial equilibrium questions that are impossible to answer definitively, since the effects will also depend on what is happening elsewhere in the economy.

Poll 37

Proposition 1: "Without changes to existing public policy or private sector practice in Australia, motherhood will always negatively affect a woman's career."

Proposition 2: "In Australia, fathers are more restricted than mothers in fulfilling a caring role while in employment."

Part 1 - Strongly agree

9

Part 2 - Disagree

7

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 - Agree

2 - Agree

1 - Australia is one of the highest soft drink consuming countries in the world.  It also has a growing proportion of the population that is obese and suffering from diabetes and heart disease. Better  than taxing only soft drinks would be to tax companies according to the sugar content of their products – any products, not just soft drinks. So ideally one would tax not only soft drinks but also all sweets and confectionary.  Taxes  on sugar  are a great incentive for producers to reduce the sugar content of their products.  An argument  for taxing only sugary drinks is that they are easy to tax. It’s more complicated administratively to tax every sugary food, it is argued. However, I do not see why it is any more difficult to tax confectionary than it is to tax sugary drinks. The evidence from Mexico for example on the effects of taxing sugary drinks indicates that the policy is working. Britain has introduced the tax earlier this year. Australia should follow. If we have managed to tax successfully cigarettes, I don’t see why we shouldn’t tax sugary products since the health disadvantages  of sugar consumption are so well documented. Diabetes and heart disease are very costly both individually and to society and there is no doubt that sugar Is associated with these diseases.

2 - See previous comment

Poll 36

Proposition 1: "Professional accreditation for the economics profession would attract more people to economics as a career."

Proposition 2: "The benefits of professional accreditation for current and prospective economists would exceed any possible costs"

Part 1 - Disagree

10

Part 2 - Disagree

9

Poll 29

"A sustained increase in the number of new homes constructed each year, all else equal, will make housing cheaper than otherwise."

Uncertain (neither agree nor disagree)

2

Homes are heterogeneous- they can come in all different shapes and sizes and qualities . So without knowing the type of houses that would be built (supply) and if they are designed and marketed to attract investors in second homes or to attract those on lower incomes, it is hard to say whether or not they will be affordable by potential purchasers (demand).

Poll 32

"There are clear net benefits for Australians from (further) increasing the diversion of waste from Australian landfills."

Strongly agree

10

While I agree with the proposition, I would have preferred to see some discussion of what alternative policies might be. The waste sector is an environmental sector, and this is one in which the federal government has shown itself  to be very weak. Managing waste is important for productivity, and the environment – and through the latter, the welfare of future generations. Firms and individuals are unlikely to take into account the externalities associated with waste, and this is a clear example an an area in which there are externalities that government needs to manage. (There are some rare examples of companies shifting towards more environmentally friendly packaging, for example, and a decent government could use fiscal incentives to encourage thistrend. Unfortunately our government is not that imaginative.) A further problem is that waste  management  affects all levels of government, so there is also a coordination problem.  Moreover, Australia will not be able to continue exporting some of our waste overseas, as other countries are now showing more enlightened policies towards management of the environment and waste than we are. Taking action to manage waste is needed now to mitigate risks to long-term sustainable growth and to contribute to emissions reductions.

Poll 33

Proposition 1: "There is a significant risk that, either as a result of the findings and recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry or as a result of the financial institutions' response to those findings, credit will become less readily available to Australian households or businesses."

Proposition 2: "Assuming credit becomes less readily available to Australian households or businesses, this will in turn have adverse consequences for the performance of the Australian economy."

1 - Disagree

2 - No opinion

1 -

2 - I strongly dislike the wording of these propositions. Clearly the RC was important and showed how much banking requires reform. How this reform can be achieved is what we should be focusing on next.

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."

Disagree

5

The proposition is rather imprecise. The answer surely depends on whether the workers’ services are complements or substitutes for the digital on-demand subcontracting platforms, and we are not given this information.

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 - Agree

2 - Agree

1 - While news undeniably has a public good aspect, any government support needs to be provided in such a fashion that the news media are guaranteed independence. There should be no room for governments to intervene in any way if they happen not to like the news that independent news media are providing.

2 - Same caveat as before.

Poll 23

Question A: "Holding labor market institutions and job training fixed, rising use of robots and artificial intelligence is likely to increase substantially the number of workers in Australia who are unemployed for long periods."

Question B: "Rising use of robots and artificial intelligence in Australia is likely to create benefits large enough that they could be used to compensate those workers who are substantially negatively affected for their lost wages."

A - Disagree

B - Agree

Poll 22

"As interest rates are at low levels by historical standards, federal and state governments, despite their public debt levels, should be borrowing more than they currently are to invest in infrastructure"

Agree

7

However there is considerable heterogeneity across states and territories in their debt levels, so as far as the states and territories are concerned they should be – and would be – considered on a case by case basis.

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."

Disagree

8

Where the goal is to limit or reduce carbon emissions, the mandatory certificate scheme is a second best alternative to an emissions tax or a cap and trade scheme, both of which are far superior solutions to the problems of  how to reduce carbon emissions. However, the politics of the situation in Australia are  unfortunately currently  unfavourable to either the emissions tax or the cap and trade scheme. In this situation, it may well be desirable to have the mandatory certificate scheme rather than the short-sighted situation of no scheme.

Poll 20

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

Agree

6

Poll 19

"The recent Parliamentary Inquiry into "Gender segregation in the workplace and its impact on women's economic equality" was asked to examine measures to encourage women?s participation in male-dominated occupations and industries. Although there is growing awareness of the productivity gains of gender diversity, the private market alone is unlikely to steer the Australian labour market toward gender equality in male-dominated industries. Breaking down gender segregation in the labour market can only be achieved with some degree of government intervention."

Strongly agree

10

There are a number of policy initiatives that have been shown to improve outcomes. These include imposing quotas, as well as introducing/subsidising initiatives to encourage women to enter - and to stay in - the STEM fields and in Economics (also disproportionately male), and also to enter the male-dominated trades. (There are too many candidate initiatives to list here.) These policies are best managed by government intervention. Other initiatives to improve the lot of women and of children are good quality childcare for all, and again this requires some government intervention to maintain standards and to avoid the likelihood that some families will slip through the net. There should also be pressure by non-governmental organisations (WEN is a good example of such a group that is developing a strong voice) to ensure that women are not passed by, and a government concerned about gender equity might think of how these groups could be supported and encouraged. Moreover, while great improvements have been made in the position of women in the public sector, there is still a long way to go to achieve gender equity, although not as far as in the private sector. It would be fair to say that, with regard to gender equity, the extent of government failure is smaller than the extent of market failure, and it therefore makes sense to have government intervention.

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."

Strongly agree

6

Poll 17

"In response to energy shortages around Australia, government policies requiring gas producers to reserve some production for domestic consumption are a good way to ensure that Australian consumers have access to sufficient gas supplies while still allowing for gas exports."

Agree

7

How much is 'some'?