Uwe Dulleck

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”.

Housing affordability is mainly driven by the supply of houses relative to demand, meaning that whatever we can do to increase supply will increase affordability. Missing on this list – in my eyes – is a "tax" on empty houses or apartments. Several European cities treat empty apartments and apartments that are not used as permanent residences with higher taxes, to reduce the number of residences that are not used most of the time. That could increase supply and affordability. Rental affordability and home affordability are for me of equal importance. In light of the cost-of-living challenges we face at the moment, I do feel lower income groups are hit harder, thus for equity reasons rental affordability deserves, in my eyes, currently more attention.

Rental Affordability

Provide more public housing, Fast-track training of home builders, Fast-track immigration of home-builders

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 payoff to clean-energy innovation has increased | To support homegrown emerging green technologies

Provide more grants to innovative firms across the entire economy

Given Australia's resources and environment, the country is a in strong position to lead or significantly contribute to green technologies. This can lead to "good" investments in human capital and drive the development and growth of a more innovative and entrepreneurial workforce.

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 building new transmission lines to connect renewable energy | Phase out non-electric vehicles | Introduce an economy-wide cap and trade carbon price

I do feel it's the combination of building the necessary infrastructure (in particular getting the grid ready for the transition) and getting prices right to facilitate this transition. Clear indications about where and how the fleet of vehicles can move (close to) zero emissions with again help to make this transition as low-cost as possible.

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%.

increasing enrolments in tertiary education, improving the quality of primary and secondary education, creating more incentives for business R&D

4

I am not sure whether this question makes a lot of sense. In the current situations the conditions are unusual in the sense that supply chain interruptions (post COVID) and potentially changes in preference to work challenge long term determinants of "natural rates" of unemployment (not to talk about the unemployment rates that non-accelerate inflation - besides the above, we do have a war, effect if migrations that affect inflation as well). For me RBA policy should be guided by consistency in RBA behaviour. Whatever the inflation rate they target, as long as that is clearly communicated, it will lead to (reasonably) good RBA policy.

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: I feel this budget tries to address the well-discussed and formulated government priorities, in particular helping those that most experience vulnerability in the current economic climate. At the same time it avoids playing costly favours to states or territories. Certainly this is much easier in a non-election year. Still, it makes for a reasonable budget. That cost-of-living relief is focussed on those most exposed keeps some limits on inflationary pressures. INFLATION COMMENTS: I still feel current inflation is more due to supply shortages than wage inflation. In that sense helping only those that really need support (and helping them with lump-sum transfers instead of subsidised prices) allows the price system to work.

Poll 58

When panellests were asked to find an extra A$20 billion per year to fund government priorities like building nuclear submarines and responding to climate change, Australia’s top economists overwhelmingly back land tax, increased resource taxes, an attack on negative gearing and extending the scope of the goods and services tax.

Photo credit by Joshua Hoehne on Unsplash

Efficiency picks: Wind back deductions for negatively geared properties Increase the GST Introduce inheritance taxes Equity picks: Wind back superannuation tax concessions Wind back franking credits Introduce inheritance taxes

Increasing government revenue is always a challenging topic but an important one to have, particularly in the post-COVID time where budgets have been strained. Politically difficult, but easy to implement would be increases of the GST (which is still comparatively low if compared internationally). Given the international comparisons I would not expect major negative impacts. Even though GST increases are theoretically questionable with respect to how they affect rich and poor people, in reality (looking at the data) it seems to be relatively equitable to raise revenue this way. The equity argument would be strongest for the introduction of inheritance taxes. A lot of wealth is passed on between generations in Australia, taxing this transfer is in my eyes sensible and can be acchieved without a too dramatic effect on (small) businesses in Australia. Removing deductions for negatively geared-properties wiould not only generate revenue but would be likely to lead to efficiency gains for Australia. The deductions subsidise Australians to invest in unbalanced portfolios, overweighting real estate, leading to (again in international comparison) overpriced housing (and limited access to family homes for people entering the market).

Poll 57

Australia’s top economists have overwhelmingly endorsed intervention to restrain gas and electricity prices, with only three of the 47 leading economists surveyed believing the best thing the government can do is to leave things to the market.

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

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Targeted subsidies for low income consumers

Prices are high for reasons - they reflect scarcity in the market, they incentivise supply to increase, and the demand side to look for opportunities to reduce consumption (changing consumption patterns, looking for more efficient use options). Policies that subsidise demand won't solve the problem with respect to demand ? the artificially lower price may even increase demand and scarcity, thus the subsidy will be fully absorbed by high prices. The effect of increasing increase supply remains, but over the short term, it may only lead to small increases. Over the long term, we see increases in supply. Depending on the perspective to be taken (do we care only about Australians or not), a reservation for domestic markets of gas produced, can increase supply on the domestic market, and given the high profits currently to be made on the international market, I wouldn't expect companies to forego those opportunities because the need to deliver to the Australian market. The trick here ? as with a smart and targeted subsidy for low-income consumers ? to have a system that keeps incentives at the margin to play their role in getting consumers to use gas/energy more efficiently. That is, a subsidy should be a lump sum, and consumers should face market prices, at least for the "last units" they purchase (the marginal consumption). Similarly, forcing producers to sell "base" production at lower prices (via the domestic reservation) or to take part of the profit generated from those base levels, should not change incentives to increase supply if marginal units can be sold at market prices.

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

Migration policy Education and skills Green jobs

Migration policy Migration policy is an easy fix, with the additional benefit that Australian experience and evidence/data strongly supports a relatively liberal skill based migration policy as a policy tool to foster growth and productivity growth. A focus on getting education and skills aligned with where the future lies (and Green jobs play an important role here) will be important to ensure sustainable growth, and the ability of the Australian economy to adapt to future needs. The requirement to adapt and change will be faster in the future than it is now, and education and skills that are flexible and transferable, will be important to manage the needed changes.

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

Increase immigration

4%

I still find it likely that inflation will come down naturally ? with COVID we had a lengthy period of "forced savings" ? people couldn't spend what they earned or received in support payments. This, combined with interruptions to the supply chain, including a shortage of labour, leads to inflation resulting from temporary higher demand combined with lower than usual supply. Any intervention that at the same time taxes and uses the income to reduce prices, will not have the required effects, as the intervention could at best affect relative prices between different products. Reducing labour shortages would at least address domestic shortages in supply (particularly with respect to domestically produced food, including fruit and vegetables).

Poll 54

Panellists were asked: 

"From this list, please pick the three issues you think will be the most important for the incoming government and should be the most important in the election".

Wes Mountain/The Conversation, CC BY-ND

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I am not sure whether an incoming government can solve a the climate crisis (or whether Australia has an measurable impact) but getting ready for the impact, and getting on board in a joint international effort to address climate change will be crucial - and stays difficult to communicate with the Australian public. But the recent challenges - or fires and floods - should give momentum. Immigration has been for a long time the life blood and main driver of Australian growth. We should rediscover this, and not enter another slump by trying to protect what we have for the Australians that are here. I think history (should have) told us, that doesn't work. The over reliance on real estate for investments, as well as the focus (and overinvestments) on owning your own house creates every specific challenges for economic stability in Australia. The affordability question is then one that adds social stability challenges. There are no easy answers here, but starting to at least develop a strategy would be very important.

Poll 52

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

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

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

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190,000 is not enough

I am not sure there is a definitive answer to this question. In the current situation my worry is more that with all the policy interventions we saw with the pandemic, net-migration may actually be negative - more recent Australians may consider to move closer to their country of origin, and potentially Australia becomes less attractive as a destination as the cost of geographic distance may be perceived as higher (after all, it may be the case that you cannot visit loved-ones as easily as we thought was normal before). If that is the case (more out-migration, less in-migration), getting this number right will be difficult. So, in that sense, the increase in this number may simply send a signal that Australia is looking for people to move here - that signal may help to get somewhere close to the net-migration we want to achieve. Without question, migration has always been an important driver of Australian growth.

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

8

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"

.

7

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

5

Without question, the experience with RBA policy over the last couple of years has been positive. My main reason to support a review of the RBA is that I do find the political pressures on the RBA have changed. The (in my eyes inflated) house/real estate prices limit the ability of the RBA to increase interest rates without creating instability, as I feel many household in Australia are over exposed to in creases in interest rates. This situation, in my yes, leads to unpredictability - as market may bed/expect RBA interventions and whether and when such interventions are limited in their effectiveness is unclear. At the same time, these increases in real estate prices increase inequality by making it harder for first home owners entering the market. My worry here is that this will cause in the long term social instability, which then may trigger economic instability. But given that this would be a secondary effect, it may not be captured by the remit of the RBA.

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

Australia is a country rich in renewable energy sources - we have the space and conditions for wind and solar farms - which are likely to create more jobs (maybe not as well paid) as in current technology mines, and jobs that will not only be there in the setup phase but also in maintenance. There is much to be gained once we have a clear target. This is on top of the argument that the alternative would expose us to carbon tariffs (or other countermeasures) of major trade partners reacting to a delay in Australian carbon reductions. And, not surprising, as an economist I believe price signals are by far the most effective way to achieve the reductions, by increasing the cost of (avoidable) carbon emissions and providing incentives for innovation and technology development. A well designed system may even open up opportunities for a double dividend - using the revenue from the system to offset other distorting taxes, or using it for the support of R&D and/or education to get Australia future ready, or offsetting inequality in the effects of the policy on different groups in the Australian society.

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)

The main policy to "solve" the vaccination problem is to have a clear policy regarding a way back to normal life. Once supply is no longer a constraint, a clear timeline until restrictions are lifted would help to let people make the choice whether they want to take health risks or not. Vaccine passports for say international travel and really high risk events or situations can be added ? if data points towards high risks of running out of hospital capacity. The pandemic and the space it takes in the news should ensure that most people that choose no to get vaccinated do have a good idea about the health risk ? and letting them make this decision themselves, but saying there will be no further restrictions for others (lock downs) to protect the unvaccinated ? this is now treated like a normal infectious disease, will get vaccination rates where they should be and it does not hold the majority hostage to a small group. Would cash or other incentives (lotteries) work - yes, maybe a little bt ? but would that be ethically better than a form of coercion? Do we need more advertising ? I think the news provide free advertising and the people who don't engage with that information may not be reached by a campaign either. If at all, making access to the vaccines even easier (taking it to the people) could help to reach some that actually want to get vaccinated but struggle with the 'how'.

Poll 48

Our panellists were asked

"Higher wages growth is now a top priority of the RBA in its efforts to sustain stronger economic growth. Please identify the three of these government policies you think would best help deliver higher wages growth".  

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

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

I do feel public investment, can achieve the other two levers to increase wages - it increases demand - and if we talk about infrastructure investments, these will stay in Australia to have the effect on the labour market. More importantly, if done well these investment should increase productivity as well. If higher wages in themselves are the aim, then I doubt the best way to achieve it, is to increase the power of unions - I am not sure whether this type of wage growth is the most beneficial for the country Where I am certain that we may get only a very limited and, if at all, short lived effect is by reducing labour supply in any way. I am quite certain that new migrants increase wages for Australians - for the simple reason of their demand increasing aggregate demand, and their willingness to seek employment, creates jobs (and many for people with higher qualification levels).

Poll 47

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

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

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

Remove the luxury car tax from all-electric cars, Subsidise only the purchase of non-luxury all-electric cars, Subsidise public charging points for electric cars, Set a date to ban the import of petrol and diesel cars, Make charging points compulsory in new homes and new carparks

10

EVs will be the future of individual mobility, the earlier Australia can set up the infrastructure, the more will Australians benefit from its engineering capability, developing industries and contributing to setting the standards. I feel Australia, with its high rate of urbanisation lends itself to EVs. At the same time, developing these in urban areas allows us to engage now in the debate and the developments how to develop a strategy to cope with the long distance travel that is also part of the Australian situation.

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

.

F

Compared to last year's COVID budget where the focus was on dealing with the crisis, this budget strikes me as a very political budget. Substantial expenditure items address current political crisis (gender equality), aged care, instead of considering structural reforms. With all the focus on recovery, I do miss a real focus on using this spending to get Australia future ready. That universities - with education being a major export of the Australian economy - not receive substantial support, can in my eyes be only explained by political considerations, and it likely will be costly to not only the university sector but the economy at large. While recovery is big in this budget, I see a lack of perspective of how to re-open the economy. Australia needs international tourists and international students to return. The strategies to achieve this are still underdeveloped.

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 

D

No question, the COVID response looms larger over this budget and the government sees the need to help the economy on its recovery. This makes it to me more of a pass than better. I feel more could have been done to use this budget to get the economy future ready. Instead of investing in coal, we should be thinking about the energies of the future. With infrastructure, I feel the investments proposed lack the important aspect of creating jobs fast (when jobkeeper runs out) - as planning is often needed - as well as being investments in our future. As an example, investing money in the NBN is a good idea - but why not replacing the last mile of copper - that would create jobs at the same time getting the NBN to full potential.

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

Australia's choice for these payments is that it is needs based. That should determine the level. The consumer price index maybe closest to capture that but a more specific basket of goods as a basis may be a better choice. Thus discussing a level on increase is a guestimate. One also wonders whether payments require some regional element, as the rate maybe sufficient to support a life in some areas it's likely to insufficient elsewhere.

Poll 42 

"The October budget will see the government announce additional policies to support recovery.  Please nominate the four programs you think would be the most effective (for an intervention of a given size) over the next two years"

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

Infrastructure projects, Social housing, Incentives for renewable energy, More funding for education and training

Any expansive fiscal policy we engage in now should be judged by its potential to contribute to future growth. Hence, of the list infrastructure (roads etc. as well as digital), renewable energy investments (a more sustainable economy), and education and training fall into that category, maybe social housing does to some extent. More money in aged care may address another policy problem we have at the moment, but I see less of growth effect of that investment - similarly subsidies for child care could increase labour supply - which I feel could help at a later stage of recovery. Tax reduction in any way, seems to be difficult to square with a climate where an expansive policy is needed.

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 

Proceed as planned

8

Given that for the majority of Australians saving for retirement is mainly done via the compulsory contribution to super, an increase in contributions is beneficial for this majority. Research, as I see it, indicates that income replacement ratios offer super at retirement seems to be too low for most people - showing that other instruments to increase this voluntarily seem not to work. It is also unclear what the incidence of the increase in contributions will be, i.e. even in this time part of this increase are likely to be paid by employers.

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

9

Given that the economy was in a reasonable healthy state before the crisis, a lot of the effect we currently see is a lack of demand. Boosting demand - in particular by helping those of low income that were hit hardest - that are likely to spend most of the support they receive - can help to boost demand, leaving the economy in a better shape once we get out of the crisis.

Poll 39

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

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

Disagree

7

At currently just under $20 I don’t think that a modest increase in the minimum wage will have a major effect either way (a pre-COVID Resereve Bank of Australia study points in that direction). In the current situation, I would expect that a higher minimum wage will lead to higher income and more domestic consumption. Trying to support businesses suffering under the crisis with such a regulation, is in my eyes too costly, as the main beneficiaries will be businesses who do well after the crisis (employing many workers) - they may not be the once most in need. Those that need help should receive it in a more targeted way, and they may benefit much more by increases in domestic demand.

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

This is a challenging question for an economist, one where several assumptions are needed. First, without question, at the current stage, the lock down saves lives - it is hard to allocate value in $ of GDP to that - this is my first reason to disagree with a general statement like this. The second is maybe closer to where economists can have a say. Even if we only look at GDP, with the implication that lost economic activity implies less resources to invest into a health system that can reduce Australian?s exposure to (other) health risks, I find it likely recovery is dependent on succeeding in controlling the virus. Our economy will not be able to fully recover if people do not feel safe to interact. In particular now that almost everywhere in the world people have experienced COVID as a threat to them (and in particular for younger cohorts the risk may be inflated) they will not easily engage in many parts of the economy if that is risky. This may be particularly obvious With tourism and (International) education as important segments of the Australian Economy. Demand, In this sectors as well as in most others, is an important factor for Australia?s growth and on people feeling safe. In that sense the cost of protecting Australia (and in the future tourists and international students when they can return) depends on successfully controlling COVID and I feel the costs - at least in the medium to longterm - are not higher than the benefits.

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

9

I am not sure whether we discuss the right problem, as a statement this is a double dividend argument - we gain by getting more efficiency into using a scarce resource and have revenue to reduce taxes. The economics is sound. The problem I see is in the political economy of the question ... we do not have a price on carbon for reasons that we do not want "new taxes" - the same debate will start on congestion pricing. Whether the political economy stacks up is the real challenge and there I am much more skeptical.

Poll 27

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

Uncertain (neither agree nor disagree)

8

I find it difficult to predict the impact of these changes to US taxation. In the long term, I feel the uncertainty that we see around public policy under the current American administration may have more effects on investment than the tax cuts. Furthermore, it is unclear whether these changes are sustainable - I do expect them not to be. All of these reasons indicate for me that long term impact is unpredictable - as is most of US policy at the moment.

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 - Uncertain (neither agree nor disagree)

1 - The debt to GDP ratio itself is a poor measure off smart fiscal policy, it does depend a lot on the type of investments the government makes with the borrowed funds. Interest rates are low and good investments can increase future growth. These opportunities need to be carefully considered. There cannot be a simple choice regarding a priority.

2 - As above, we should think a bit further tax cuts (whether company or income) than just these two options.

Poll 29

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

Strongly agree

10

Yes, the laws of demand and supply apply to housing as well. I may miss the subtlety in the question, "all else equal" is maybe problematic as it will be difficult to build more houses as close to city centers as we did in the past. Economics at its best?

Poll 30

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

Agree

7

I am not sure whether I need to pick agree or disagree, it sounds that under current rules the same 'pricing of road-use' implies lower (or no) luxury car taxes for normal electric cars, i.e. the higher price should be reflected in the tax regime, whether this is currently done sufficiently is a good question. Another question is whether the (luxury) car tax purpose is to tax road use, that would be better done by taxing use not ownership. With modern technology it could be done based on km driven with a car, maybe multiplied by a factor depending on weight of the vehicle. If it is about road use and maintenance of the infrastructure, I guess, that all of this is not that important as heavy trucks will be the main issue. This question is then just about raising revenue for government. Is it the worst of all taxes? No! But it doesn't make too much sense to think about this purely from a 'user pays' perspective.

Poll 35

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

Disagree

9

I am not sure that the regulation of financial services and products will do the trick, but outcome/performance based regulation would make a difference. We can identify underperformance and publish observations and regulate minimum performance (ruling out clear misconduct, selling dominated products) is doable for a large share of customers.

Poll 32

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

Strongly agree

9

Relatively simple policy changes can help to make us use our resources much more efficiently. The focus on waste is just one way to achieve such efficiency gains. While we still may have enough space for landfill, the long term cost of this strategy is likely to be underestimated.

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 - Uncertain (neither agree nor disagree)

2 - Uncertain (neither agree nor disagree)

1 - This question has several aspects to consider. In general better regulation of banking services should increase the quality of service, thus increasing demand for the service and potentially leading to better investments. If we do trust our institutions, it may actually lead to better outcomes and maybe even more funds being available. If the regulation is implemented poorly, then yes this will increase costs to customers and credit will become less readily available ... but that this risk is larger than that new trust in the sector increases the supply of funds, is uncertain to me.

2 - I struggle with the premise. If currently the banking system is inefficient and (at least in some segments maybe even fraudulent) then getting this right may have a lot more benefits than costs to the economy. A more efficient banking system may even balance out the assumed drop in credit availability.

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

7

As always, it is not so much about the industry you work in but the extent to which your work is substitutable. For simple work in then digital economy (plain vanilla web development, but also proof reading, etc.) wages will drop as the international competition will bring down rates and it is difficult to see how to regulate against that. For customised and specialised work, and this in my [opinion] includes the social capital agents bring to the market, the effect will not lead to a downward pressure it may even lead to better and more opportunities.

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 - Maybe more important than the public good character of good journalism is that it gave us a common reality to have policy discussions. I am not sure that this problem is solved by publicly supported media that cannot compete with the ‘customized‘ social media newsfeed. Unfortunately the consumer prefers his/her own reality.

2 - Let’s put it slightly different, in a time we see cuts, I definitely think it would be good to have support for public stations. But, we may need to think about who is served by these stations and couldn’t they afford/ pay for the service w/o burdening the public at large?

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

6

I am not sure whether this will make much of a difference but, if at all, having weddings and the parties that go with them will add to Australia's events and tourism industry. As friends said, lots of couples that do not need to have their weddings somewhere overseas (NZ, Canada ...) but can have them here.

Poll 23

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

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

A - Disagree

B - Strongly Agree

On question A: I find it likely that further automation (robots and AI) will shift more employment towards personal service jobs, I find it likely that labor demand in these sectors will on the aggregate be more stable, hence people will transition quicker.

On question B : The crux is in the could ... as usual there will be more than enough gains from automation but that they will be shared in a way that allows the workers losing from this transition to be compensated is very unlikely.

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

In principle, I do agree. (Smart) Investment in infrastructure (and education for that matter) are likely to pay for themselves in the future. This is particularly true in times that interest rates are low, and, maybe more importantly, the economy is slack. It is this latter aspect that in my eyes provides the limitations of this statement, if Australia waits too long it may crowd-out demand from the private sector.

Poll 21

"The Finkel Review has recommended a mandatory certificate scheme that obliges electricity retailers to purchase a certain proportion of the electricity they sell from sources of electricity whose emission intensity is below a defined level. This is preferable to conventional approaches to the pricing of externalities, such as an emission tax or cap and trade scheme."

Disagree

8

Poll 20

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

Disagree

9

To avoid a race to the bottom with respect to quality of service, I do indeed believe that for profit provision requires smarter regulation, forcing providers to be compensated at least partially on outcomes not inputs into the service (for education, think about part of the fees being only paid when a student has a job). If good regulation is in place, I do not think that the statement applies and the "usual" cost savings may realise.

Poll 16

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

Strongly agree

9

Lower taxes on one form of investment over another will increase relative prices for the assets in question. Thus for reason of biasing investment decisions alone this is not a good policy (even when one ignores the public finance and distributional implications). Whether property prices are affected depends on the capacity of the construction industry and the elasticity of supply. I find it likely that the elasticity of supply is not sufficient to compensate for the overinvestment in this asset leading to increased property prices. The increase in supply may have beneficial effect on the rental market or at least in segments of the rental market. Unfortunately, given a shortage of supply, I do expect that rents have increased with the increase in housing prices.

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

9

Government policies currently or in the past affected gender equality in the labour market - differences in parental leave are maybe the most obvious example - without changes to policies and/or citizen's expectations and perceptions at least in these areas, change will be difficult. Apart from that, I find the topic important enough to merit government intervention to speed up an otherwise slow process.

Poll 15

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

Agree

7

Not particular interesting this question, but yes, I am still believe it makes sense to understand the foundations first. I feel one of the more interesting questions is how this will change with the change of the micro curriculum given the advent of behavioural approaches. We may enter a time where its less clear that macro builds on micro.

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)

8

I am not sure whether this statement is well crafted. The basic challenge is how to aggregate welfare across different individuals. Behavioural Economics tells us that gamblers hardest hit from an addiction to play suffer self control problems and most likely a revealed preferences argument does not apply, hence these gamblers do not only cost society but we cannot even be sure that they derive welfare out of this activity. Thus in this case we definitely have social costs that are higher than the benefit. If we assume that cognitive biases do not play a role (not a very reasonable assumption), we end up in a situation where the it all depends on how one aggregates costs and benefits, including government revenue from gambling. This aggregation problem is in my eyes the crux of the problem, who counts (what about family members that are adversely affected), how to compare monetary and non-monetary costs.To get back to Behavioural Economic arguments, I do feel that "Nudges" in this space can and should play a larger role. Allowing, even forcing, people to set unrestricted limits for the amount of money they want to spend on any night (when they are in cold state of decision making, i.e. before entering a hot state while gambling) are hard to argue against, if one believes in the rationality. Such interventions, would make it much easier to argue that gambling is likely to increase welfare and choices.

Poll 13

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

Agree

10

I do feel that a Trump presidency will have a strong impact on the world, and maybe most importantly for Australia, the Chinese economy. Given the role trade has for Australia, this Has to have direct effects on the Australian economy. In the long term one may argue that a Trump presidency may bring us to the end on the American hegemony, with China likely to taking the lead next. In the long term, this may be beneficial for the Australian economy (but there is a lot of uncertainty with regards to China's rise and what would be the impact of China's rise).

Poll 12

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

Agree

8

Migrants are, by and large, highly motivated people. As such they are very likely to contribute to society if we let them.

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

9

This type of intervention can only work in the short-term. For the long-term smarter regulation is needed to avoid ending up (dis-)favoring one source of energy over another.

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

Agree

10

I agree in principle - but we are taking very much an economics perspective here. I feel Behavioural Economics combines insights from behavioural sciences with the normative backbone of economics - that is the power it has. Having said that, its main contribution are not "useful insights into individual behaviour", that is only true for the economists who worked for too long with the fictitious character of the homo economics, the main contribution is identifying "inefficiencies" resulting from cognitive biases and providing solutions how to help people to make better decisions affecting their health, wealth and happiness (to cite Thaler and Sunstein).

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

10

No question, we do not want a Department/Ministry of Truth (ala Orwell's 1984) but a) any choices that government presents to its people will come with one form of choice architecture or another, using behavioural insights just says, we should use scientific approach to design these choices; b) is where the economists come in, at least in the spirit of Thaler and Sunstein, Nudge is about presenting choices to people in a different way, i.e. it is not about ruling out options, it is about helping people to make better decisions for themselves and society; c) this is where Economists come in 'Nudge' in my eyes is that we identify decisions that are likely not rational or unintended by the individual and help them to make better decisions. As an example if a superannuation system does provide "free money" to people that sign up (opt-in), and only 50% do so, I feel we can be certain that this is due to a bias, an changing the system to an opt-out instead of an opt-in as a nudge, is simply not unethical. There may be cases where more oversight is needed, but where we stand at the moment, not helping people to make better decisions for themselves and their families when we know that they (and we all) fall victims to cognitive biases that are part of our nature is in my eyes unethical.

PART 2 - Strongly disagree

10

No question, we do not want a Department/Ministry of Truth (ala Orwell's 1984) but a) any choices that government presents to its people will come with one form of choice architecture or another, using behavioural insights just says, we should use scientific approach to design these choices; b) is where the economists come in, at least in the spirit of Thaler and Sunstein, Nudge is about presenting choices to people in a different way, i.e. it is not about ruling out options, it is about helping people to make better decisions for themselves and society; c) this is where Economists come in 'Nudge' in my eyes is that we identify decisions that are likely not rational or unintended by the individual and help them to make better decisions. As an example if a superannuation system does provide "free money" to people that sign up (opt-in), and only 50% do so, I feel we can be certain that this is due to a bias, an changing the system to an opt-out instead of an opt-in as a nudge, is simply not unethical. There may be cases where more oversight is needed, but where we stand at the moment, not helping people to make better decisions for themselves and their families when we know that they (and we all) fall victims to cognitive biases that are part of our nature is in my eyes unethical.

Poll 10

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

Disagree

7

Given how difficult it is to set long term goals for any part of government, I believe it would be a mistake to change the focus of the RBA from inflation to economic growth. Nominal economic growth seems to be a mistake for sure. The reason for the lower level of confidence and the "disagree" instead of a "strongly disagree" comes from the fact that with a short-term perspective, it may make sense in the current situation to consider changing targets for a limited time. Again, I feel the political process is beyond short term changes. In that respect, I feel the suggested alternative cannot be supported.

Poll 9

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

Strongly disagree

9

While I am uncertain about the effect on Europe, I am pretty convinced that leaving the EU is bad for the average UK citizen. Investment in the UK will drop as companies do not like to be exposed to two sets of regulation, I expect this to happen in manufacturing as well as in financial services. This has to be counteracted by changes/reductions in company taxation (as discussed already) to compensate. These will have direct adverse effects, some of them with ongoing effect as services, including health and education, provided decrease. All of this leads me to expect not only a recession in the short to medium term but also an ongoing loss in economic growth.

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

4

This is a difficult question and I guess personal beliefs will play a bigger role than what economics can tell us. I do believe that investment in education has very high returns and I believe where Australian business currently sits (the still existing focus on resources) the payoffs from good investments in education are likely to outperform the effect of additional incentives in the form of low taxes for companies.

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."

Disagree

8

I don't think Australia faces the budget emergency that is/was mentioned frequently in the past. Given that I see Australia still on a growth trajectory (if only due to ongoing population growth via net-immigration) there is no urgency to reduce debt levels - which are anyway low in international comparison. So, as long as Australia does not go on a (sustained) spending spree, there are no major risks to its economy.

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

9

Whatever (positive) happens in China will be beneficial to the Australian economy, this follows simply from the sheer size of China compared to the Australian economy. That Australia is a "big" exporter of education (and that situated in a nice and save environment) is just an additional benefit.

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)

9

Poll 4

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

Disagree

8

I do believe that the climate towards innovation is not the best in Australia. Such a bias can be seen as an externality on the business. A tax incentive could be a way to offset this bias. In this sense, I see that such incentives may increase efficiency in the way the Australian economy operates. The big challenge is how to define the technologies and businesses that merit the tax break.

Poll 3

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

Strongly disagree

10

Yes, if you believe that a Xmas present is about "transferring" something to someone else, then money would be the better present (at best you could do as well with your present as this person could do with money) but, presents are a signal that you care about the other person, the more personal a present is "picked"/the more effort you put into the process, the better the present ... once we talk about signalling and how important that is, we are ultimately wrong with "money as the best present".

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 is a bit of Economics 101 that is very likely to work, the harder judgement is to judge whether a) this is wanted per se (taking family time from at least some families but offering more potential for joint experiences to others - hopefully also at lower prices) and b) whether one supports the implied redistribution of surplus away from workers that currently enjoy higher penalty rates on Sunday. But both of these do not affect that it will increase employment and service available on Sundays.