Author's Name: Bruce Chapman Date: Tue 12 Feb 2019 |
Bruce Chapman, AO
Professor Bruce Chapman, AO
Bruce Chapman is a professor of economics at the Crawford School of Public Policy at the ANU. He has a PhD from Yale University and has published around 200 articles and several books including in the areas of: higher education financing and student loans; wage and unemployment determination; government as risk manager; income contingent loans; and the economics of crime, happiness, cricket and marital separation. He has extensive experience in public policy having helped design the HECS policy, as a senior economic adviser to Prime Minister Paul Keating, and as an adviser to the World bank, the OECD and the governments of a large number of countries. He received an Order of Australia in 2001 and the Distinguished Fellow Award of the Economics Society of Australia in 2015.
Subject Area Expertise
- Labour Economics
- The Economics of Education (higher education student financing)
- Economics Policy
- Applied Econometrics
- The Economics of Crime
- The Economics of Sport
Website
https://crawford.anu.edu.au/people/academic/bruce-chapman
Responses (37)
Budget 2024
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/
YES The energy package is very smart because it simultaneously subsidises electrification while reducing inflation.
B
It is a responsible budget and quite creative in regard to the energy package.
Transition to net zero - ape the US Inflation Reduction Act?
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)"
The most important way for the Australian government to act with respect to climate change is to subsidise alternative energy sources and remove all contributions to fossil fuel producers.
Provide more grants to innovative firms across the entire economy
There is no more important thing for the Australian government to do than heavily subsidise renewable energy activities.
Reintroduction of the Carbon Price
Poll 61
Worried economists call for a carbon price, a tax on coal exports, and ‘green tariffs’ to get Australia on the path to net zero
Introduce an economy-wide cap and trade carbon price | Phase out non-electric vehicles | Increase the carbon price presently paid by big polluting facilities via the safeguard mechanism
We can and should keep unemployment below 4%, says our survey of top economists
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%.
reducing out-of-pocket costs of childcare for families, better targeting immigration, creating more incentives for business R&D
3.5
The institutions influencing the so-called NAIRU have changed so much over the years that we need to constantly examine the relevance of the NAIRU notion. In the last two years or so international factors, such as the Ukraine war, have importantly influenced price inflation in ways that are not related to domestic wage bargains or our unemployment situation. It would be very helpful if monetary policy gave much less weight to the alleged price-wage trade-off - this has changed hugely over the years.
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: Tax windfall profits Equity picks: Tax windfall profits
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
Education and skills Broader reforms to promote productivity
Education and skills A major issue is the financing arrangements related to Vocational Education and Training (VET). VET funding is a mess and has been for a long time; there are up-front fees alongside no charge regimes, both of which are poor and inequitable. A small number of courses offer income-contingent loans along the lines of the university HECS-HELP scheme, but most do not. A universal broadly-based loans scheme for vocational education (including TAFE) along the lines of HECS-HELP would allow reasonable charges for these courses; money which could be used to expand and improve the system. Income-contingent loans would protect students from repayment hardships and default and put VET on the same healthy footing as hithe rest of post-secondary education. The VET system will not deliver propitious and fair outcomes until there is fundamental income-contingent loans reform. Governments should have been aware of this for the 34 years that HECS has existed, but have shown no leadership in the area.
'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
No need, inflation will fall back to an acceptable level without the need for any government action to back up the RBA Super profits tax on fossil fuel producers with revenue used to reduce cost of services
8%
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
.
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
8
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
9
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
All of these responses are useful and need to be considered in tandem. What could also have been mentioned is the value of the reduction of subsidies to the fossil-fuel industry.
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"
National advertising campaigns;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"
.
Reforming industrial relations to increase the use of enterprise bargaining;Reforming industrial rel
Transition to electric cars
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"
Subsidise the purchase of all all-electric cars, Subsidise only the purchase of non-luxury all-electric cars, Subsidise public charging points for electric cars
9
Top economists want JobSeeker boosted by $100+ per week and tied to wages
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
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
7
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 - Agree
2 - Agree
Congestion pricing - November 2018
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
7
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."
Strongly 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 - Agree
2 - Agree
1 - At some point very high debt means less capacity for budget flexibility because of interest rate payment obligations. But we are nowhere near this so the priority is not great.
2 - My answer is influenced significantly by my view that the case for either income or corporate tax cuts is very slight.
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
5
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 - Strongly agree
2 - Uncertain (neither agree nor 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."
Disagree
7
I can't see why this will generate net economic benefits. Even if more people decide to marry and this results in a boost for the marriage industry, the switch in expenditure has to come from other areas.
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 - Strongly disagree
B - Strongly agree
Technical change is always with us, and it is part of the process of innovation. There is no evidence that rapid technical change creates higher unemployment, although for some workers there will inevitably be displacement. Seen any blacksmiths around lately? We must remember that technical change, including the use of robots, increases efficiency and this tends to decrease prices and increase incomes. High purchasing power leads to higher levels of expenditure and this helps create employment. although the types of jobs inevitably are different.
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."
Uncertain (neither agree nor disagree)
10
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."
Uncertain (neither agree nor disagree)
10
I just don't know.
Social costs of gambling - December 2016
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)
10
I don't know what the evidence on this is. I am very confident that I don't know what the evidence is.
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 issue here concerns the capacity of the officials to make accurate forecasts. I don't think there is any reason to believe that a different body would do a better job than Treasury. If there is an inference that Treasury is not "independent" this suggests that the institution is prepared to make mistakes for political purposes even though this would tarnish the reputation of the institution, which I find somewhat implausible.
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
7
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)
9
RBA economic growth targets - August 2016
Poll 10
"The Reserve Bank of Australia should be tasked with targeting nominal economic growth rather than inflation."
Disagree
6
It is hard to know what the point is with respect to this suggestion.
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
6
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."
Strongly agree
8
Recent work by Eric Hanushek and Lugar Woessmann supports strongly the view that literacy and numeracy skills of the population are the most important contributors to long-run growth. So long as the additional education contributes importantly to these capacities there should be little doubt that expenditure in this area is of the most critical significance.
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
6
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."
Agree
8