Brian Dollery

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”.

The housing crisis is caused by ridiculously high immigration levels.

Home affordability

Restrain immigration

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/

NO The budget outlays are too high.

E

The budget has obvious stimulative characteristics

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 longstanding system was widely understood and broadly accepted.

Scrapped

The system should be changed back to the earlier model.

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 ensure Australia can be part of newly-developing US-linked supply chains

Provide access to credit for firms in industries that will supply the US projects, such as nickel an

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

Expedite the development of nuclear energy

Nuclear energy is the best option since it can take advantage of the existing distribution network.

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 the level of Jobseeker payments, better targeting immigration, cutting immigration

5

The subsidization of unemployment through dole payments has generated a large chronic 'unemployment' problem.

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: D - Keeping inflationary pressures in check: F

D

OVERALL COMMENTS: The budget treads a tenuous line between outlays aimed at easing living costs and not inducing further inflation through public expenditure. It is unlikely not to have an inflationary impact. INFLATION COMMENTS: The budget treads a tenuous line between outlays aimed at easing living costs and not inducing further inflation through public expenditure. It is unlikely not to have an inflationary impact.

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 inheritance taxes Equity picks: Broaden the set of goods and services captured by the GST

GST has the best efficiency characteristics of the options offered.

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 supplies has worked well in many real-world cases, including WA.

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

Workforce participation Migration policy Industrial relations

Migration policy The Labor Party will try to force through high migration, despite its negative impact on real wages. The ACTU will display its Gramscian tendencies by agreeing.

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

Reserve a portion of gas and other commodities for domestic use Wind back government spending

2.5%

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

.

Immigration is an explosive question, especially having depressed real incomes for the past two decades at least, as well as undermining social cohesion and the quality of life in Australian cities. Unfortunately, both major parties support mass immigration under the guise of addressing labour shortages.

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"

.

Less than 160,000

High migration puts downward pressure on real wages.

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"

Uncertain

6

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"

.

8

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"

Agree

7

The RBA is now at odds with national and international money markets on inflationary expectations.

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"

Government support to develop and roll out emissions-reducing technologies

Disagree

While most countries will commit to net zero by 2050, compliance with this commintment is likely to be limited, as it has been previously. As long as China fails to curb carbon emmissions, global efforts will have the characteristics of a classic Prisoner's Dilemma.

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

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"

.

Restraining growth in labour supply by cutting temporary migration (including international students

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"

.

8

Market forces should determine the uptake of electric cars, especially given the vast distances in Australia, and the huge differences in transport infrastructure between metro, regional and rural areas.

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

.

B

With loose monetary and fiscal policy, the Australian economy faces potential inflationary conditions. We are already seeing rampant asset inflation, with general price rises next in line.

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 

B

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

Evidence has already emerged from the Australian agricultural labour market of the disincentive impact of the dole, with unemployed Australians disinclined to work at harvesting.

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 

Bring forward legislated personal income tax cuts, One-off cash transfers to households, Infrastructure projects, Social housing

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

5

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 

Agree

8

A lot depends on what form expansionary fiscal policy takes.

Poll 39

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

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

Agree

8

Small and mediam sized enterprises will struggle over the short and medium term to retain existing staff once federal government wage subsidies cease. A freeze in minimum wages after the federal wage subsidy ends will assist in maintaining employment.

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 disagree

8

The opportunity costs of maintaining current measures in terms of both community health and economics are growing. A better mix is required, which opens the economy but targets vulnerable groups, like frail elderly persons, for ongoing protection.

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 - Agree

8

Part 2 - Agree

7

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 - Agree

7

Part 2 - Strongly agree

9

Accreditation has been used by numerous professions to erect barriers to entry and thereby force up remuneration. There is little reason to believe the same could not be done in economics.

Poll 27

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

Strongly disagree

8

Since US corporate tax cuts change relative rate of return on Australian investments there will obviously be an effect. However, the strength of this effect cannot be known with any degree of precision.

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

Poll 29

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

Strongly disagree

10

While obviously an increase in the the housing stock ceteris paribus will put downward pressure on prices, the question is biased since the ceteris paribus assumption is ridiculous in current policy context. The massive increase in both the absolute and the relative price of housing in Australia, most marked in capital cities, can be ascribed predominantly to historically unprecedented levels of immigration. Immigration has not only resulted in a massive increase in housing prices, but also suppressed per capita increases in income. Quite apart from its negative impact on social capital, immigration has thus served to depress the living standards of Australians in both of these ways.

Poll 35

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

Strongly disagree

8

Numerous methods exist that can oblige banks to act in the public interest. For example, prudential regulation on mortgages can be adjusted to tighten lending and reduce mortgage default rates. Similar, legislation can beenacted obliging banks to be transparent on fees and charges.

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

8

Workers who still retain their positions in the industries in question will be employed under conditions where capital/labour ratios have risen. It can thus be expected ceteris paribus that total factor productivity will rise, thereby exerting upward pressure on the wages of workers who remain in these industries.

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 disagree

2 - Strongly disagree

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 disagree

9

SSM likely to generate considerable legal costs in terms of conscientious objection. This kind of expenditure would represent DUP outlays with a negative multiplier.

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

8

Reckless and socially destructive levels of immigration have meant that public infrastructure, especially in large Australian cities, is now woefully inadequate. While debt-financed infrastructure investment is a second or even third best policy option behind reigning in immigration, it is better than nothing.

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 16

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

Strongly disagree

9

The current capital gains tax regime predates the the present boom in house prices. It cannot thus be held responsible for the rapid rise in housing prices in Melbourne and Sydney. Instead other demand factors, especially high levels of international immigration which is concentrated in Melbourne and Sydney, are much more important.

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."

Disagree

8

This comment was updated on 08/08/2017We know from the work of James Buchanan and other economists working in the public choice tradition that affirmative action inevitably generates inefficiency and inequity since state intervention is invariably captured by persons the policy was not intended to benefit. This is especially true when rent-seeking coalitions in the Tullock sense, comprised of highly educated and motivated people, are formed to advance the material interests of members through job preferment, especially in the public sector. Thus, for example, in contemporary Australian universities senior management positions have been awarded to highly organised well educated women rather the most suitable candidates because they have 'captured' the recruitment process. This has contributed to the fact that Australia now has badly run university system marked by rapidly declining standards.-Monash University and Monash Business School are committed to creating an organisational culture that is inclusive and in which female staff participate equally at all levels in our pursuit of excellence. The views in the above comment do not reflect Monash's stated position, or that of the Economics Society of Australia, on gender equity.

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

9

The accuracy of assumptions underpinning budget estimates have consistently been too optimistic. This may be because it serves to suggest that the federal government is addressing budget repair adequately. There is thus a strong case for an independent body to prepare forecasting assumptions.

Poll 12

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

Disagree

7

Despite the vaunted Australian 'points system', in practice legal migration to Australia is subject to severe 'gaming' by means of forged qualification certification, falsified English language proficiency tests, extensive 'family reunion' often involving false claims of family connections, serial arranged marriages, and the like. The net outcome of these and other practices is evident in both crime and social security statistics for different migrant groups, with some groups way above national averages. This serves to raise the 'hidden' external costs of the migration program.

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

Agree

7

Behavioural economics is a work in progress. It is still much better to approximate motivation using maximisation assumptions otherwise economics will end up in the morass psychology is stuck in.

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 - Strongly disagree

9

PART 2 - Strongly disagree 

9

Poll 10

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

Disagree

8

An optimal approach would be for the RBA to consider economic growth, inflation and unemployment in setting policy.

Poll 9

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

Agree

8

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."

Disagree

8

Empirical work has shown a weak relationship between education expenditure and growth-enhancing human capital acquisition and there are not thus strong grounds for assuming education expenditure will boost growth.

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."

Strongly agree

2

Turnbull Government budget is based on heroic assumptions and thus expenditure and revenue projections are implausible, to put it mildly. It would seem that both sides of Australian politics have simply given up on the urgent task of 'budget repair'.

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."

Disagree

8

With Chinese growth continuing to fall, together with its comparatively low per capita GDP, it is highly unlikely imports of services from Australia will compensate adequately for the ongoing fall in Australian resource exports to China.

Poll 5

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

Agree

7

As a general proposition this seems valid, but it is easy to find historical examples to the contrary, such as hugely expensive Football World Cup tournaments, the Olympic Games, and the like, which require immense infrastructure investment.

Poll 4

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

Strongly agree

9

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