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Author's Name: Matthew Butlin
Date: Tue 12 Feb 2019

Matthew Butlin

Dr Matthew Butlin

Matthew Butlin has been the Victorian Red Tape Commissioner since September 2015 and was recently reappointed until June 2018.  He works with businesses throughout the State of Victoria to identify and reduce red tape and regulatory inefficiency. His career covers both public and private sectors, including Chair of the Victorian Competition and Efficiency Commission, Commissioner of the Productivity Commission and senior executive roles in mining, management consulting and in several Commonwealth Departments.  He is currently a Professorial Fellow at Monash University’s Monash Business School and the Chair of the Advisory Board of the Melbourne Institute for Applied Economic and Social Research.  His has been a member of the Executive Committee of the Australian Department of Defence and a councillor of Leadership Victoria.  He is a graduate of the Australian National University and the Massachusetts Institute of Technology.

Subject Area Expertise

Public policy, productivity, regulatory reform, governance, organisational design and economic history.

Website

http://esacentral.org.au

 


Responses (30)


Royal Banking Commission (II) - February 2019

Poll 35

"There is no way to significantly increase the degree to which Australian retail banks act in the interests of consumers."

 

Disagree

8

The incentive structures for bank staff, from the top down, play a key role in shaping behaviour. A more complete set of performance measures linked to remuneration that strongly penalises behaviour not in the consumer interest would provide stronger incentives for better behaviour, especially when linked with reliable information on non-compliance going to management and ultimately the bank board and a requirement for both to take action.


Congestion pricing - November 2018

 

Strongly agree

8


Banking Royal Commission and the Credit Crunch - October 2018

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 - Agree

2 - Strongly disagree


Waste Policy - August 2018

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

The answer to this is highly location dependent.  And I assume diversion refers to recycling.  Where population densities are high, land is very scarce and there are public safety concerns from landfill, then the proposition is highly likely to be correct. But not where population density is low and land is scarce.


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

It is unclear whether this question assumes the current framework of road use charges or an ideal road charging framework that addresses congestion, impact on road and other impacts on the asset and other road users related to the use of the road. I assume externalities beyond those applying to other road users - especially green house gas emissions - are dealt with through other means such as the pricing of fuel. On that basis the road charging regime should treat fossil fuel - powered and electric cars equally.


Will building more homes make housing cheaper? - May 2018

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


Australian Federal Budget 2018 - Reduce government debt or provide tax cuts? - April 2018

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 - Strongly agree

2 - Agree


US corporate tax cuts - March 2018

Poll 27

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

 

Disagree

8

The real question is not "yes or no" but "how much". The effect of the tax cuts will be to improve - in isolation and all other things being equal - the attractiveness of the US as an investment destination compared with all other jurisdictions. There is some debate about the size of the improvement in comparison with Australian tax rates and hence the size of the likely impact. That said, taxation treatment is only one aspect of the investment decision. There are typically many other considerations including the availability of necessary inputs, logistics, proximity to markets, unit costs of production and so on.


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."

 

Agree

6


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 - Agree

2 - Disagree


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

5


Robots, artificial intelligence and the 'future of work' - October 2017

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 - Uncertain

B - Agree

On the first question, robots have been a significant element of manufacturing for many years.  It is very likely robots and AI will displace many jobs.  Whether or not this translates into long term unemployment depends significantly on the existence of other concurrently growing areas of new jobs and also the capacity of the education and training systems (broadly defined) efficiently retrain and reskill displaced workers.  In short, having flexibility in skills formation is very important and is an essential part of structural adjustment.  
On the second question, historically deep structural changes driven by technological change (e.g. the industrial revolution in Britain) have had a net increase to income but the distributional consequences have been particularly adverse for some groups in the adjustment.


Public borrowing for infrastructure investment - September 2017

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

All other things being equal, there is scope for more investment in infrastructure. A key point is that such investment needs to demonstrate a robust benefit cost ratio well in excess of 1. It is my understanding that the analysis and ranking of potential infrastructure projects by Infrastructure Australia indicates such projects exist.


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

Australia has successfully operated mixed provision (for profit and not for profit)of human services for many years - private schools and hospitals have been a feature of both education and health care. In either case - public or private provision - there can be incentives for inefficiency and cutting corners. As framed, I disagree with the proposition. Private provision does not necessarily and directly lead to worse outcomes - what is especially important is having well-designed incentives in the system that reinforce and reward good outcomes and penalise abuse and over servicing.


Gender diversity in the workplace - role of government? - June 2017

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."

 

Uncertain (neither agree nor disagree)

7

I have a problem with how the question is formulated. It is not clear what "breaking down gender segregation" means, although the implication seems to be gender equality. I note there are notable examples of corporations and businesses that have expressly set out to break down internal labour market barriers / gender segregation within their organisations. That has been done - as far as I am aware - as a matter of enlightened self-interest and organisational values / principles rather than as a result of government intervention. I also note the strong support (starting from the top) the Economic Society is giving to enhancing the standing of women in the economics profession through the Women in Economics Network. As a matter of leadership, governments can and should emphasise merit as a key principle in labour markets. There is a government role to identify and remove regulatory barriers that prevent or diminish the effect of that principle, especially in relation to women.


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."

 

Strongly disagree

8

The Treasury is the government's chief adviser within the official family and draws on expertise and information from the RBA, ATO, Department of Finance and so on that is not available to external forecasters. In addition it has acces to the array of published forecasts of private providers. It is highly appropriate that the Treasury is accountable for the economic forecasts used in the budget, and that it has the expertise to do it as well as reasonably possible. That said, it would be useful to include a sensitivity analysis in the forecast to key assumptions (eg commodity prices, exchange rates, international events and so on) and a comparison with contemporaneous private sector forecasts.


Energy shortages - reserving Australian gas - April 2017

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."

 

Uncertain (neither agree nor disagree)

5

Ultimately economic efficiency is served by pricing the gas at its opportunity cost - the international price. Currently the internal price is said to be above this level driven by an excess domestic demand over available domestic supply arguably due to a downward spike in supply - indicating a significant inefficiency. Reservations coupled with a tax to achieve the international price for gas is an option.


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

6

In my view the case for increasing capital gains tax on investment in property is that by reducing returns to property investment it reduces speculative exuberance in the property market and moves closer to taxing the real return on property in a low inflation world.


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

6

On balance, I believe it is more effective to teach macro-economics first, provided it is well-motivated in terms of its connection to real economic issues.  However, I note that I am not in the business of teaching economics although I do the odd guest lecture that undoubtedly sits in the general area of micro economics.


Part 1: 'Behavioural economics provides new and useful insights into individual behaviour.' Part 2: 'It is unethical for governments to use behavioural economics to

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

 

Agree

8


Immigration - November 2016

Poll 12

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

 

Agree

6

The time-frame for this net benefit depends on the composition of the immigrant population, including the demographic and skills make up of the intake.  Historically Australia has benefited from migration being a significant component of the population increase but it has required significant investment in infrastructure and government services.


Behavioural economics - September 2016

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 - Agree

6

I am OK about nudging providing governments explain to the electorate what they are doing and why. My answer changes significantly to oppose nudging if the manipulation is either covert and/or the policy matter is ethically dubious.

PART 2 - Agree

6

I am OK about nudging providing governments explain to the electorate what they are doing and why. My answer changes significantly to oppose nudging if the manipulation is either covert and/or the policy matter is ethically dubious.


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

In my view this is question of the right assignment of policy instruments.  Monetary and fiscal policy both have important (separate) roles in macro-economic management, with monetary policy most appropriately assigned to inflation, not inflation and real growth together.  This assignment is not without absolute qualification - performance against an inflation target range should also have regard to key real economy indicators such as the rate of unemployment.


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."

 

Uncertain (neither agree nor disagree)

5


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."

 

Agree

6


China services boom for Australia? - April 2016

Poll 6

"As the Chinese economy makes its transition from investment-led to consumption led growth, the Australian service sector which currently accounts for around 20% of total exports, will produce a second 'Chinese economic windfall' for Australians."

 

Agree

6

Windfall is too strong. That the growing market and its proximity (location and timezone) creates (and has created) opportunities is without doubt. But there should be no presumption of an opportunity that is easily won, and Australian services businesses will have to craft offerings that are appropriate to the Chinese marketplace, including having regard to the different institutional arrangements that apply between the countries.


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."

 

Uncertain (neither agree nor disagree)

7

The answer depends on the design of the incentive, the stage of the business and the other necessary elements for successful start ups. The availability of finance, access to technical skills and capacity, level of managerial capability, access to markets and the profitability of the business are all critical considerations. A policy based solely on tax incentives is likely to be far less successful (and hence inefficient) if it does not also address these other elements.


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."

 

Agree

7

This question oversimplifies. Specifically it does not come to grips with the all important interpersonal dimensions of gift giving and receiving, especially the key question of how much effort went into the choice of gifts for (say) a significant other. If the recipient's (significant other's) utility function also incorporated a perception of how much time, and insight went into the choice of gift then problem is more complex. Cash ranks high on flexibility but low on perceived effort, while a specific gift may not be the optimum gift but may rate highly on perceived consideration, effort and valuation of the recipient by the giver. The two dimensional problem is more challenging and real!


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."

 

Strongly agree

9

This change will make employment profitable to a service provider at lower levels of demand for the service provided - for example meals and personal services covered by the current structure of penalty rates. All things being equal, this would increase the supply of services in areas where current levels of demand are below what is currently required to make the service profitable as well as areas where there is currently high demand. This could be expected to favour non-metropolitan areas disproportionately - that is, to increase the choices to consumers in those areas in particular.