Peter Abelson

Poll 65

Panellists are unanimous in believing Australia’s housing market is in crisis.

Offered a choice of 14 measures identified by the Economic Society of Australia as likely to restrain prices for buyers and renters, none of the 49 leading economists polled picked: “do nothing, the market will determine appropriate prices”.

House rents and prices are complex issues. The following are some quick observations written while on overseas travel. The core message is that the “house price crisis” is in essence an income inequality crisis. Starting with rents, between 2008 and mid-2023, real rents rose by around 1% per annum, which was below the growth in average disposable income per household. For the top three income quintiles rents remained generally around 18% of disposable household income. But for the bottom income quintile, rents were often over 30% and sometimes over 40% of disposable household income. Even with Commonwealth rental income support, net rent was often over 30% of household income. This key issue arises because the distribution of household income is much greater than the distribution of housing rents. In the housing rental market, the problems are almost certainly exacerbated by higher-income households owning second homes and by the growth in domestic and international holidays and tourism supplanting regular rental properties. The extent is unknown, but it is potentially another unequal household income issue. Turning to house prices, reflecting lower mortgage rates, the mortgage repayment inclusive of interest on a median price housing property was a similar proportion of median household income in mid-2023 as it was 20 years earlier in 2003. However, the home deposit had risen substantially relative to household income. This has almost certainly impacted first homeowners. The exact impacts are unclear as some families, possibly many, benefitted from rising incomes and returns on capital and likely supported related first homeowners. Also, later marriages and increasing numbers of immigrants delayed housing purchases. The impacts on homeownership are unknown. But, again, ownership outcomes are driven in significant part by income inequalities. But why did housing prices rise faster than rents over the last 20 years? Essentially because interest rates, the cost of capital, fell. Between 2003 and 2023, housing prices rose pretty much in line with ASX prices. Currently, the housing market is out of equilibrium (ceteris paribus, housing prices are likely to fall), as it takes around 2 years for the housing market to adjust to major changes in interest rates, such as have occurred in the last 18 months. Of course housing supply matters, but it is a major misconception to attribute the escalation of house prices principally to lack of housing supply. Between 2003 and 2022 the national housing stock rose by 4% more than the national population. However, critically, public (social) housing fell from 327,000 dwellings in 1995 to under 300,000 in 2021, from 6% of all dwellings to 3%. Also critically, several high-quality econometric studies have shown that the house price elasticity of the housing stock is between -2 and -3. To put this in context, there are over 11 million dwellings in Australia. Increasing the annual supply from 180,000 dwellings to 225,000 dwellings would increase the housing stock by 0.4% and would reduce average house prices by around just 1%. In this context, it is noted that one of the options cited in this survey is “ease planning restrictions”. This unqualified option would be a very poor way to increase the housing supply. Planning rules are needed to ensure that the benefits of new housing exceed the costs, including impacts on local amenity, the natural environment, noise, privacy, views, traffic and parking and so on. What is needed are quality benefit-cost exercises of planning and development options inclusive of all significant benefits and costs. Do we need under-utilised horse racecourses in the centre of our cities? Do we need twelve 18-hole golf courses in Sydney’s high residential value Eastern Suburbs? And it should be noted that housing developments from start to finish often take 4-5 years. Rushing development approvals to save 20 days approval time is an inappropriate approach to good urban planning. But to return to the central point. Of course, we need more housing and relatedly better urban planning, but the core housing problem is income inequality. We need a very substantial increase in seriously neglected public housing (affordable private rentals are no substitute), more income support for low-income rental households, and more support for first homebuyers with low or modest incomes. Taxing the use of housing for second home use or domestic or international tourists would probably contribute little to solving the underlying income distribution problem. Reference: Abelson, P., [House Prices and Rents in Australia 1980-2023: Facts, Explanations and Outcomes](https://taxpolicy.crawford.anu.edu.au/publication/ttpi-working-papers/21492/housing-prices-and-rents-australia-1980-2023-facts). Working Paper 14/2023, TTPI, ANU.

Provide more targeted financial assistance to first homebuyers, Provide more public housing, Allow people to withdraw superannuation savings to purchase a first home

Poll 64

Panelists were asked to comment on two questions: 

Is the budget likely to achieve its aim of getting inflation back within the RBA target band by the end of this year and back to 2.75% by mid next year?

And

On May 14, the government delivered a budget designed, in the Treasurer's words, to "focus on fighting inflation in the near term and then growth in the medium term " - 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/

NOT SURE The budget expenditure is not itself especially inflationary. Various other factors, notably interest rates, import prices and the exchange rate also influence inflation. In any case, the RBA target band of 2%-3% is an arbitrary target. What matters is incomes relative to prices. While lower inflation rates are preferred, inflation of 3% to 3.5% may well be compatible with increasing real incomes.

B

This is a well-balanced and responsible budget that provides important though modest social income support for individuals in need and funds for important social services. The budget expenditure will assist employment and output without creating significant excess demand.

Poll 63

April Poll - panellists were asked about the GST deal with Western Australia.  The following two questions were posed: 

"Is the long-standing arrangement broadly the best method of distributing the nationally-collected GST revenue?" and "Should the 2018 changes be kept or scrapped?"

YES - This is a very fair principle and has no major (inefficiency) disincentive features that would make it an inefficient principle. Of course, it is a difficult principle to achieve, notably in identifying the differential needs of different communities, but that should be dealt with by open conversation and communication.

Scrapped

Poll 62

Panellists were asked "Which of the options set out below best describes the kind of approach the Australian government should take to the US Inflation Reduction Act? (Pick 1)"

To support homegrown emerging green technologies

Provide more grants to innovative firms across the entire economy

I support grants to innovative companies if they are providing, or are likely to provide, public or third party benefits. It is not as open-ended support for innovation with only, or mainly, private benefits. Thus, my support for providing more grants to innovative companies across the economy is qualified.

Poll 60

Australia’s leading economists believe Australia can sustain an unemployment rate as low as 3.75% – much lower than the latest Reserve Bank estimate of 4.25% and the Treasury’s latest estimate of 4.5%.

improving the quality of primary and secondary education, better targeting immigration, reducing out-of-pocket costs of childcare for families

5

A certain amount of unemployment is frictional and largely independent of macroeconomic conditions. This is assumed here to be 1 in 20 workers (i.e., 5% of employment), but more informed research could provide an alternative percentage. It should also be observed that macroeconomic policy may affect (a) the amount of underemployment and (b) the participation rate. Macroeconomic policy should take into account (a) and (b) as well as the "non-accelerating inflation rate of unemployment".

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: B - Keeping inflationary pressures in check: C

B

OVERALL COMMENTS: This was an excellent well-informed and delivered budget focused on the important needs of our community and delivered with appropriate expenditure constraint in the current inflationary environment. While it has been criticised by some for not being radical enough on both social support and tax reform, this was a sensible first step in these directions, including confirming the sensible 30% tax on superannuation balances over $3 million. INFLATION COMMENTS: Our recent inflation has been substantially a supply side phenomenon. The budget should not unduly inflate demand-driven price increases.

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 superannuation tax concessions Broaden the set of goods and services captured by the GST Equity picks: Wind back superannuation tax concessions Introduce or increase land taxes (possibly with cut in stamp duty) Introduce inheritance taxes

Efficiency comments: Taxes on any of these three categories are unlikely to have significant negative production effects. But the same comment applies to some of the other categories. Equiity comments: Generally, most of the revenue from these three taxes would be levied on more affluent households. But, again, there are other equitable options.

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

.

Reserve domestic gas equivalent to 15% of LNG production from each LNG export project (ie making the

Reserving a percentage of LNG production for domestic use is the most robust and practical approach to alleviating the domestic energy shortage, albeit it may take time to take effect. This could be supplemented by short-term subsidies for low-income households until prices come down. Regulating the already complex domestic market may distort energy production, have unforeseen effects, and have administrative costs.

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

No need, inflation will fall back to an acceptable level without the need for any government action to back up the RBA Boost childcare subsidies Reserve a portion of gas and other commodities for domestic use Super profits tax on fossil fuel producers with revenue used to reduce cost of services Increase immigration

7%

The question how high an inflation rate should we be willing to tolerate is not well time-defined. In the short run we can accept a high inflation rate because much inflation is driven internationally and outside local fiscal decisions (though the belated return to monetary normality did not help). In a 12 month perspective, international conditions may stabilise (in the sense that they do not get worse), so we should not panic into stringent fiscal controls at this stage.

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

.

Prioritising government actions is principally about identifying and declaring social priorities. These are essentially personal value judgements rather than technical economic questions. Of course these objectives need to be economically achievable at acceptable costs. In our affluent high wealth society, more should and can be done for the less well-off and other less fortunate members of our society, including refugees, and for the climate well-being of the world.

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"

.

160,000 is about right

This is a deep question with many impacts on our economy and community. I think that 160,000 is sufficient for a positive economic impact. I have two reservations: 1. In the city likely to attract most migrants (Sydney), much of the city already experiences high to extreme traffic congestion and increasing amenity challenges with high residential densities. Housing an extra 40,000 residents a year is a challenge. 2. I would prefer refugees to make up a higher proportion of our immigrants. Their needs are greater, often much greater. Of course, this is principally a social view, not an economic one, though many refugees may be quite productive.

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"

Agree

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

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"

.

5

2022

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"

Uncertain

8

The main problems with ultra low interest rates over an extended period are disproportionately high asset prices, especially but not only in housing, that are not included in standard measures of inflation, including the CPI. Focusing almost exclusively on the CPI has created housing affordability problems and risks of loan defaults and financial instability when asset prices fall. Raising interest rates slowly now would steady asset prices and be a stabilising influence on the economy without having significant negative impacts on employment and output.

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

A carbon price broadly reflecting the marginal costs of CO2 emissions is the most efficient way of proceeding. Informed businesses can then make environment efficient decisions. However, and this is a significant caveat, the price must be in place, and expected to be in place for 10 to 20 years, along with regulations indicating how it may change over time. This could be supported by some government subsidies to encourage development of new technologies. But these would be supportive, not prime, policies and not deter private firms responding to market signals. Over the last 10 or so years, government has shown itself to be hopelessly inept at developing or supporting carbon reduction technologies. Making government the anchor of such developments would likely lead to slow and inefficient outcomes.

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;Mandatory vaccination for higher risk occupations

Covid is a public health issue. People who are vaccinated should be allowed to participate in business and society (with freedoms dependent on the social vaccination rate). Those who decline to get vaccinated and are prone to infect others with Covid should be required to adopt other safety actions.

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

These questions are difficult because they are a partial approach for a much broader question. Our preferred policy is to tax CO2 emissions, not to subsidise one alternative out of many ways to reduce CO2 emissions. If the broad policy is to subsidise alternatives that reduce CO2 emissions, then it would be appropriate to include electric cars. But fundamentally greenhouse gas emissions require a comprehensive policy platform, not a piecemeal one.

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

.

C

The budget is the heart of government policy. Therefore, it is difficult to review a budget separately from the whole of government policy. As a Liberal-National Government budget, we score this budget as a pass (grade C). Increased funding for higher unemployment benefits, childcare, aged care, women?s safety and carbon emissions reduction is welcome. But as several commentators have pointed out, the annual increases are modest. Citing 4-yearly total amounts is misleading rhetoric. In our view, the current level of debt at around 50% of GDP is not a concern, especially at current interest rates. Government debt-to-GDP ratios are over 100% in many OECD countries. Although it may be noted that our debt is due mostly to recurrent budget deficits, and not (more appropriately) to funding capital expenditure. However, from a more social democratic perspective, the budget is unduly conservative. The levels of social assistance, especially for the aged care and disability sectors and for job seekers, remain modest. In our view, there should be more focus on a well-being budget along OECD lines. Foreign aid has been reduced. And apparently there is no funding for a badly needed Federal Integrity Commission. Nor is there any serious tax reform: no tax on high levels of wealth, continuing low tax on some very high incomes from superannuation funds, no resource taxes, no carbon prices and no broadening of the GST (where our tax base is much narrower than in most other OECD countries).

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 broadly met the government's rebuild economy / jobs objectives, though more support for child care would have helped these objectives more. But it could also have met these economy / job objectives with more empathy and social equity with greater support for social housing, aged care support and job seeker assistance as well as child care.

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."

Be indexed in line with wages

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 

One-off cash transfers to households, Wage subsidies or hiring bonuses (beyond JobKeeper), Social housing, Increasing subsidies for child care

I was reluctant to respond because the criterion set - raising economic activity in the next two years - is a narrow one and does not explicitly incorporate short (or long-term) social objectives. Answers that fail to recognise more than one narrow short-term objective could distort decision making. My responses are based on social values as well as economic activity. And I assume that one-off cash transfers would be income related.

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 abandoned

7

In the medium term, super contributions are paid mostly out of wages rather than as add-ons to wages. Thus a compulsory increase in the contribution would lower take home wages. The preferred option is to raise take home wages and allow workers to choose whether to add some additional super.

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

9

When monetary policy is at or near the effective lower bound as it is now, fiscal policy support is critical.?

Poll 39

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

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

Strongly disagree

7

As per the proposition that a wage freeze would help the economy, the major issue is the elasticity of demand for low paid labour. If the demand for low paid labour is inelastic (an elasticity below one), which is the most common estimate, an increase in the minimum wage will increase low paid labour income and spending. Further, political and bussiness leadership needs to show respect and inclusiveness. Labour productivity rises with respect for the workforce � and falls with disrespect. Thus, raising the minimum wage will help the economy. A wage freeze would not.

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"

Disagree

3

I disagree with the statement because it implies that we (Australia) must maintain substantial social distancing measure to keep R<1. It appears to me that going forward we (Australia) can keep R<1 with substantial reductions in the existing social distancing measures (not maintaining present social distancing restrictions as implied by the statement) and thus with relatively low economic costs going forwards. However, this premise is essentially a public health prediction on which economists should take advice from the relevant experts. Consequently, as an economist I put low certainty on this view. I note also that this does not include changes to other restrictions, such as relaxation of international travel restrictions.

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

7

Part 2 - Disagree

7

The issue of professional accreditation was discussed several times when I was Secretary of the Society from 1993 to 2006. There was always quite firm opposition to accreditation. The neo-liberal view was that the market should decide who are economists and who not. The pragmatic opposition was that there is no simple test of who is an economist. The pragmatic problem was twofold. What university qualifications would be required? And post university, some would practise economics and others not ? how would this be factored in? In about 2004, following a survey of falling standards in economics courses at universities, I proposed that the Society should sponsor a national third year UG course which would become part of university degrees in economics. There was very little support for this either from strong universities or less strong ones. So, the pragmatic problem remains. To conclude I remember an anecdote from the UK. Some dozen or so years ago, when the Head of the Economic Service in the UK Government retired, he was asked what is was like working as an economist in the UK government? He replied: ?Ninety per cent of the work we do in government is 101 Economics; but people are any good at this only after they have done it for 10 years?.

Poll 34

"In general, using more congestion charges in crowded transportation networks — such as higher tolls during peak travel times in cities, and peak fees for airplane takeoff and landing slots — and using the proceeds to lower other taxes would make citizens on average better off."

Agree

8

Poll 27

"The recent US corporate tax cuts will have no impact on investments in and capital flows into Australia."

Disagree

7

Saying that the US corporate tax cuts will have "no" impact on capital inflows to Australia is too strong. But, in my view, the impacts will be minor as companies need to support existing investments and Australia remains an attractive destination for new capital investment.

Poll 28

Proposition 1: "Slowing the growth in the debt to GDP ratio should be a priority for Australian governments."

Proposition 2: "Slowing the growth in the debt to GDP ratio is a higher priority than income or corporate tax cuts."

1 - Disagree

2 - Disagree

1 - The statement talks about growth in debt rather than the current level which complicates response. Overall, current net debt is manageable. Unfortunately, budgets often mix capital with recurrent expenditure. Borrowing for productive capital investment capital is reasonable. Extending the debt significantly for recurrent services is not justified under current economic conditions.

2 - Again the question is overly complicated. This respondent disagrees on the basis that modest income tax cuts would be slightly preferred policy.

Poll 29

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

Agree

8

There have been many studies of the impact of housing supply on house prices showing elasticities varying between -1.1 and -3.5. Girouard et al. cite 20 studies. Oxford Economics cite 4 studies. Two points should be noted. One, these are national studies. Increasing housing supply in one city alone would have much less effect because net immigration into that city would increase and restore the prior spatial equilibrium relativities. Two, these results refer to changes in housing stock, not housing flows. A 50% increase in completions (flow) in one year, will typically add only about 0.66% to the housing stock and reduce house prices by the order of 1.5%. Thus, increasing housing suppl;y would have a small impact on house prices. The much greater driver of house prices is interest rates. Abelson, P., Joyeux, R., Milunovich, G. and D. Chung, 2005, ?Explaining House Prices in Australia: 1970 to 2003?, Economic Record, 81, pp. S1-S8. Girouard, N., Kennedy, M., van den Noord, P., and C. Andre, 2006, Recent House Price Developments: The Role of Fundamentals, Economics Department Working Paper, No. 475. OECD, Paris. Oxford Economics, 2016, Forecasting UK House Prices and Home Ownership (1992 to 2014) https://www.oxfordeconomics.com/my-oxford/projects/351906

Poll 30

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

Uncertain (neither agree nor disagree)

8

The pricing principles should be similar. Road user charges should reflect congestion costs, road wear and tear and third-party environmental costs. These charges may vary with vehicle type.

Poll 32

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

Uncertain (neither agree nor disagree)

7

Unfortunately the question is too broad to allow for a specific response. In my view, there would be net benefits in diverting some waste from land fills but not in diverting other wastes.

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."

Uncertain (neither agree nor disagree)

8

This is a classic "it depends" problem.

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 - See below.

2 - These two propositions  are truly a poisoned chalice. Accurate information does have important public good qualities. And relying on market forces, billionaires such as the Kochs, Rupert Murdoch, the Mercer family or Berlusconi, to provide unbiased journalistic information is absurdly unrealistic.  Unfortunately, it is almost equally unrealistic to expect elected representatives such as Trump, Erdogan or Berlusconi to promote and finance independent quality journalism.  But as Churchill reputedly said, democracy is the worst form of government, except for all the others. In a similar spirit, I support taxpayer support for independent quality journalism.

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."

Strongly agree

8

A healthy and inclusive community is more productive than an exclusive one.

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"

Strongly agree

8

As advocated in “Rebalancing Monetary and Fiscal Policies” (ESA Conference July 2017) with co-author Tim Dalton, borrowing to invest in infrastructure (subject to cost-benefit standards) is good economic policy when interest rates are low, productivity is low, there is under-employment and there is plenty of fiscal space (a low debt-GDP ratio). These conditions apply to some extent in Australia. Lower interest rates would be ineffective, somewhat regressive via higher asset prices and prudentially risky.

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

8

Poll 16

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

Uncertain (neither agree nor disagree)

7

Arguably CGT should be less concessionary across the board (though not on CPI component of gain) but change should be general not discriminatory on one asset class.

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."

Agree

4

Prefer nudge to regulation and note that Government might have to start by nudging itself.

Poll 15

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

Disagree

7

I think economic education should start with presenting big picture concepts to students - the subject matter of economics, circular flow model of the economy,  GDP, employment, role of capital and labour, role of government, income distribution, inflation, productivity and growth. Logically, macroeconomics comes next and then microeconomics.

Poll 14

"The social costs of gambling exceed the benefits (including consumer surplus from recreational gambling and tax revenue for governments)."

Uncertain (neither agree nor disagree)

7

The proposition is plausible but evidence is needed to support the assertion.

Poll 13

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

Strongly agree

10

Poll 12

'The total benefit of current levels* of migration to Australia will outweigh the total costs to Australia's economy'.

Agree

8

A fair to high proportion of migrants are working age, moderately or well qualified and motivated to work.

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."

Disagree

7

The proposed regulatory solution is third best. The best ways are to introduce peak pricing of power to manage energy demand and consistent carbon pricing policy to encourage renewables and guide investment by other possible energy sources.

The total benefit of current levels* of migration to Australia will outweigh the total costs to Australia's economy.

Agree

7

Useful insights include loss aversion and individual responses to probabilities, but many insights were incremental to existing knowledge rather than wholly new.

Poll 11

Part 1: 'Behavioural economics provides new and useful insights into individual behaviour.'

Part 2: 'It is unethical for governments to use behavioural economics to "nudge" citizens.'

PART 1 - Uncertain (neither agree nor disagree)

8

It depends. Some nudging (advertising) is highly appropriate (tobacco consumption, drugs, gambling etc) but nudging like advertising can be abused by governments, sometimes badly so.

PART 1 - Uncertain (neither agree nor disagree)

8

It depends. Some nudging (advertising) is highly appropriate (tobacco consumption, drugs, gambling etc) but nudging like advertising can be abused by governments, sometimes badly so.

Poll 10

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

Disagree

8

This objective is too crude. For example, it implies raising the bank rate when real growth increases and the inflation rate is constant, which may not be appropriate. The criteria for the RBA should be more nuanced.

Poll 9

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

Disagree

8

Poll 7

"The recently released 2016-17 Commonwealth Budget projects that the Australian Government's underlying cash balance will return to surplus by 2020?21*. Australian politicians should rebalance the budget with greater urgency."

Agree

6

I accept the target as reasonable given our economic and net financial position, but agree with this statement because I doubt that the target will be achieved.

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)

10

Benefit depends primarily on negotiation over economic rent (profit) which belongs to the event promoter. This is so sensitive that the Australian (Victorian) Grand Prix Corporation would lose the right to run the GP if it revealed to any third party its payment to the F1 Corporation.

Poll 4

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

Uncertain (neither agree nor disagree)

5

In my view, the incentives are likely to induce only small changes in behaviour, innovation or investment (as innovators and investors in this space are not seeking marginal gains) and the concessions could be rorted. However a tick for a culture shift to encourage new business over old.

Poll 3

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

Disagree

8

My wife (a psychologist) and I have been invited to a X-mas party. I ask my wife whether we should take a bottle of wine, chocolates or flowers or whether we should maximise our host's utility by presenting her with $20. My wife replies that if I am going to embarrass her by behaving like a silly rational economist she won't come with me to the party.

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."

Agree

7