Allan Fels, AO

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”.

.

Home affordability

Tighten the negative gearing and capital gains tax concessions, Ease planning restrictions, Provide more public housing

Poll 64

Panelists were asked to comment on two questions: 

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

And

On May 14, the government delivered a budget designed, in the Treasurer's words, to "focus on fighting inflation in the near term and then growth in the medium term " - What grade would you give the budget, given that objective? A, B, C, D, E or F

Wes Mountain/The Conversation, CC BY-ND https://creativecommons.org/licenses/by-nd/4.0/

NOT SURE

C

Poll 62

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

To support homegrown emerging green technologies

Provide more grants to innovative firms across the entire economy

These are difficult questions. No easy answers.

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 | Expedite building new transmission lines to connect renewable energy

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: B

B

INFLATION COMMENTS: The starting point is that the budget has a small surplus suggesting it may not be inflationary as a whole.

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

.

Cap the price at which producers can sell gas domestically (for already agreed supply)

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 Care jobs

Migration policy This is the best and quickest way of meeting today's problems but a longer term emphasis on education and skills is critical.

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

Super profits tax on fossil fuel producers with revenue used to reduce cost of services Reserve a portion of gas and other commodities for domestic use Increase immigration Increase income taxes with revenue used to reduce cost of services Boost childcare subsidies Push for below-inflation wage rises in the Fair Work Commission A strong competition policy

4%

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

.

I chose social support, housing availability and affordability, and health as my priorities because all are chronically underfunded. Also, most of those investments pay off in the long term, as well as creating a fairer Australia which seeks to minimize social and economic disadvantage. I support in principle more spending on defence but it usually is wastefully done. The case for government infrastructure spending is especially weak in present circumstances.

Poll 52

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

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

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

.

160,000 is about right

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"

Disagree

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"

.

8

2023

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

8

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

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"

Mandatory vaccination for higher risk occupations;Vaccine passports for higher-risk settings (eg. flights, restaurants, major events);National advertising campaigns

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"

Subsidise only the purchase of non-luxury all-electric cars, Make charging points compulsory in new homes and new carparks

8

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

Poll 44

"Ahead of a decision about any permanent increase expected early next year, The Conversation and the Economic Society of Australia asked 45 of Australia’s leading economists where they thought JobSeeker should settle."

Be indexed in line with wages

Poll 42 

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

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

Expanded investment allowance, Wage subsidies or hiring bonuses (beyond JobKeeper), Permanently boosting JobSeeker (Newstart) beyond December 31, 2020, Social housing

The question is narrowly framed as to which intervention would have the biggest stimulatory effect.Probably the answer is direct government spending done immediately. But policy should be broader than that and treating the stimulus effect as just one albeit major factor So my answer is partly conditioned by wider policy considerations . Social housing is top of my list

Poll 40

"Governments should provide ongoing fiscal support to boost aggregate demand during the economic crisis and recovery, even if it means a substantial increase in public debt"

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

Strongly agree

8

Poll 39

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

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

Agree

6

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"

Uncertain

10

Poll 36

Proposition 1: "Professional accreditation for the economics profession would attract more people to economics as a career."

Proposition 2: "The benefits of professional accreditation for current and prospective economists would exceed any possible costs"

Part 1 - Disagree

7

Part 2 - Disagree

8

Poll 27

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

Agree

7

Poll 29

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

Disagree

5

The question as framed requires the answer "yes" but the question of whether it would make a significant difference gets a "no" from me.

Poll 35

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

Strongly disagree

7

I believe that a great deal can be done to increase the degree to which Australian retail banks act in the interests of consumers. Quite strong and comprehensive measures will be required. The following are the most important: There should be a legislated separation of bank activities in marketing their own products and in purporting to provide independent advice to customers about what are the best products on the market as a whole. There needs to be an external authority to monitor and supervise the bank handling of remediation. The remuneration systems of financial institutions have got out of hand. The best starting point to this complex matter is to prohibit commissions and percentage payments and the like and to replace them with a fee for services e.g. an hourly fee for advice. We need a radical improvement in the performance of ASIC and APRA. In particular they need a change of culture. This will prove to be harder to do than it sounds. People have been talking for over twenty years about the ASIC and APRA culture needing improvement. Similarly there needs to be a change of culture in the banks. This will also be quite difficult and requires a radical overhaul of everything from Board membership; to new management arrangements; and to the establishment of incentives for good customer oriented service etc. There needs to be a strong follow-up to the Hayne Commission by the government. This also presents major problems. I do not have great confidence in politicians fixing the problems. The capability of government departments, even the Treasury department, is somewhat limited in relation to the scale of problems they will encounter. I am not enthusiastic about setting up a raft of new Commissions nor am I confident that the established regulatory constitutions on their own can solve the problems while so many difficulties lie ahead. Even so, I believe that significant changes can and will occur. The Royal Commission hearings, processes and report are themselves important drivers of cultural change. These comments are made on the day before the final report of the Royal Commission.

Poll 33

Proposition 1: "There is a significant risk that, either as a result of the findings and recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry or as a result of the financial institutions' response to those findings, credit will become less readily available to Australian households or businesses."

Proposition 2: "Assuming credit becomes less readily available to Australian households or businesses, this will in turn have adverse consequences for the performance of the Australian economy."

1 - Agree

2 - Agree

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

Poll 24

"Assuming that the law will be changed to allow same-sex couples to marry in Australia, this will generate net economic benefits for the nation as a whole over the next 10 years."

Strongly agree

10

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 - Agree

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"

Uncertain (neither agree nor disagree)

3

If governments were to make independent, transparent and public business assessments of projects, and then in general select those ranked by benefit/cost ratios, then I would support the statement. However, given that current federal and state governments of all political colours prefer to pick winners primarily with reference to murky short term political objectives favouring big ribbon cutting options in marginal electorates, there is a high probability of poor choice of infrastructure projects; so denying the option may be second best.

Poll 20

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

Agree

8

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

8

I have heard claims for many years that this does not require intervention as the private sector will take care of the problem. Not enough has happened and we now need intervention

Poll 15

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

Agree

8

Poll 14

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

Agree

8

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."

Agree

8

Poll 13

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

Strongly agree

10

I am concerned at her attitudes to trade. Having said that, the major trade agreements under discussion now have many limitations.

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

7

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

8

Poll 6

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

Agree

6

Poll 4

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

Agree

7

Poll 3

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

Disagree

8

Small gifts are about personal relationships. In this context cash is cold and contributes little to the personal relationship. A considerate small gift brings a wider pleasure to the recipient than just the gift itself. It may also confer pleasure on the giver.If I were talking about big gifts, the situation could be different. If I were thinking of giving a substantial gift to a close family member, say a car, I would probably give cash instead leaving them free as to how they use the money.Behind this rather trivial question lies a bigger question about the role of vouchers and personal budgets. Economists are very familiar with the arguments in favour of direct payments to the disadvantaged. It gives them choice, it enables them to spend the money as they think best suits their personal needs. It empowers the consumer and disempowers the service provider.What I find interesting, however, is that voucher schemes often impose some limitations on how the money is to be spent.

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

8

The case for this reform is very strong. It is worth noting that the 7-Eleven case and other disclosures indicate considerable non compliance with this law in a significant number of cases.