Gigi Foster

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 or increase land taxes (possibly with cut in stamp duty) Wind back the capital gains exemptions on the family home Equity picks: Increase resource taxes Introduce inheritance taxes Tax windfall profits

Efficiency comments: Since the time of Henry George, who recognised that land could not run away, and that it changed in value in response to economic conditions rather than only in response to its owners' efforts, we have recognised in economics that taxes on unimproved land are some of the most efficient around. The Henry Tax Review recognised this as well. The barrier to implementation is mainly political, with some fixed costs of the transition from stamp duties and other transaction taxes to land taxes, and also ongoing costs of a land-tax-based system, that fall on the shoulders of particular (landed and hence able to lobby) groups. Let me add that the presumption of this question ? that we must raise taxes in order to fund expenditures on the particular listed things ? is not a statement that everyone would agree with. For example, I do not see it as obviously in Australia's interests to fund a transition to "net zero". Instead of taking it as given that it is, we should consult hard data, not just output of computer simulations, on what tangible benefits that expenditure will provide to Australia, and compare these benefits to the size of the expenditure being proposed. Equity comments: The resource super-profits tax, again something advocated in the Henry Tax Review, died for political reasons ? like the land tax ? but would have taxed the excess profits earned by MNCs using Australia's richesse to enrich their management and shareholders, rather than to enrich Australia. Returning the revenue of such a tax to the Australian people directly would be a progressive move. Note that to achieve the objective mentioned in the question of "reducing the burden on less-advantaged groups", technically (if the "burden" referred to is an absolute one, not a relative one) one would have to couple any new tax (like a resource super profits tax) with some sort of tax relief ? which could be for example to make child care free (child care fees are like a tax on wages for workers). Child care is a policy area in which Australia is woefully behind our peer nations. A universal basic child care system must be designed carefully, with a focus on reductions in red tape and provision of meaningful consumer choice, but other nations have done it and it would be a positive step towards intergenerational equity. So too would inheritance taxes (after a certain threshold, like say $2 million, and applied to real estate and other assets as well as cash holdings) and a few other of the options above. Superannuation in particular is a rort and treats wage-earners like untrustworthy children. The inability of poor families to use the money in their super accounts to finance necessary expenditures today is part of what keeps these families poor. We should instead make the aged pension scheme more generous and release control of retirement savings back to workers themselves, retaining the tax advantages of making retirement contributions in order to encourage them.

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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Government should not intervene

Most of the options suggested would exacerbate inflation (e.g. subsidising energy bills) or merely cover it up rather than solving it (e.g. instituting price caps or pushing the government in other ways to become an energy-market middleman), or simply have tiny impacts (e.g. providing information to consumers about using less energy). The price-fiddling suggestions remind me of the failed Nixon price-fixing tactics of the early 70s. Consumers are not idiots, and they will work out that they're paying a lot for energy as prices rise and will naturally then have incentives to scale back their demand to the extent possible ? that is basic economics. I was tempted to select the domestic gas reservation option, as I think that's the best of a bad lot of options here, but another option that didn't make it to the list is to re-institute the suspension of the fuel excise tax. That would really help consumers (including poor ones) at the pump, which is where a significant fraction of energy budgets go and would not be inflationary. It's potentially quite an effective quiver in the government's bow at a time when it doesn't have many.

Poll 56

Investing in Australians’ education is far more important than immigration in resolving the nation’s skills shortages, according to leading economists surveyed in the lead-up to this week’s jobs and skills summit.

The 50 top Australian economists polled by the Economic Society of Australia and The Conversation are recognised by their peers as leaders in their fields, including economic modelling, labour markets and public policy.

Wes Mountain/The Conversation, CC BY-ND

Education and skills Broader reforms to promote productivity Care jobs

Care jobs By "care jobs" I assume is meant jobs that are mainly about providing care for others ? including childcare, care for the disabled, and care for the elderly. Not only are these jobs at the top of the list of the types of work that most require and sustain our humanity, something that has been under significant strain over the past few years, but they also carry the potential to be hugely promoting of human wellbeing, through lifting the quality of life of those cared for as well as providing deeply meaningful work to the carers. They also liberate other labour sitting within our societies to be deployed elsewhere, as desired by the parents, children, or other people who presently do more care work than they would prefer to do if the alternative ? i.e., to buy at least some of that care on the market ? were acceptable, accessible, and affordable. Finally, high-quality child care in particular can make a significant impact on the health and happiness of future Australians. To invest effectively in care jobs requires relaxing much of the red tape that surrounds them, including overly burdensome formal education requirements, while empowering local care organisations (including family day care providers, community aged-care centre operators, and so on) to make decisions in line with market incentives and be periodically peer-audited rather than perennially hamstrung by government bureaucracy. If the government wants to help more, it could set up an online clearinghouse for the demand and supply sides of these markets to find, rate, and exchange information about one another.

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

Wind back government spending Extend the temporary cut in fuel excise due to expire in September Super profits tax on the mining sector Provision of more public housing

3%

The RBA wasn't wrong to view a 2-3% inflation rate as a healthy one ? so that is what we would like to return to. How to get there? The first obvious thing is to cut off at the knees all of the continuing expenses on COVID theatre (e.g., purchases of tests, masks, signage, vaccines, etc.) and ballooned bureaucracy focused on COVID that has grown up like a weed over the past two years. It is no longer achieving anything of human value, if it ever did, and it is a huge burden on the Australian purse not to mention a vehicle (through the wages of covid-focused bureaucrats and other expenditures on these wasteful and unproductive line items) for the injection of extra money into the economy. I would also favour measures that reduce the financial suffering of the man on the street without injecting more cash into the economy, so extending the fuel excise cut ticks that box. I've also been in favour of the mining super-profits tax for the decade or so now since it was first seriously floated, as a means of returning some of Australia's natural wealth to Australia (rather than having that wealth flow almost entirely into the pockets of multinational corporations who use part of it to pay fat cheques to a small group of people in Australia). And why not use those proceeds to build more public housing and thereby seek to lower house prices, a counter-inflationary measure that also directly helps regular Australian families with their housing budgets through increasing supply? I'll add that several of the other options offered in the list could be counter-inflationary, but I wouldn't recommend them because of other negative effects I would expect them to have. Also, inflation will eventually fall, as rates rise and more importantly as the fallout of the worldwide economic clusterbomb that the West set off with our disastrous COVID policies (which is mainly responsible for the inflation we are now seeing) settles, and people recover regular habits of thought, activities, and investments, and re-build their productive networks - but that will take time, and the above measures may help to speed the reduction of inflation while we wait.

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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Voters care most at the end of the day about issues that impact their wellbeing right now. After two years of having our machinery of state hijacked by the covid project, the Australian people will be wanting their politicians to acknowledge and attempt to rectify the massive damage that covid policies have inflicted onto their health and their economic situations. They will want to start to heal from the impacts of the ghastly governmental misfires of the past two years. Above all they will want to see compassion and care, rather than more rules and authoritarianism, coming from the mouths of their politicians. The politicians, furthermore, owe them that compassion (along with an apology of gigantic proportions). My selections above are my guesses about in which areas of their lives the Australian people are hurting most heading into the election, but employment, business support, wages growth, and taxation are also worthy contenders.

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

Australia is a nation of immigrants, and that is a formidable advantage. Our economy and our society benefit enormously, in many dimensions that are not all captured in economic statistics, from the different thoughts, ways, and dreams of a myriad of people blending here from around the world. Pre-covid we were seeing tens of thousands of skilled immigrants with valuable human capital walk in every year to bolster our industries and enrich our communities. With the disaster of the past two years (including tanking of our immigration inflows) behind us, and a danger of Australian retreating into parochialism or even xenophobia due to the social divisions and restrictions that have featured in our covid policy responses, we have ground to make up over the next few years in order to back-fill our workforce and refresh our society with the alternative perspectives and challenging new ideas of immigrants. While working hard to increase our immigration inflows, the government should also set about creating a welcoming destination for them, without the threat of legislatively unjustified freedom restrictions, and with the goal not to see people of the same source country settling within enclaves, but of seeing immigrants settle and assimilate within the fabric of Australian society - a goal that is furthered by retaining a basic English language requirement and requiring immigrants to demonstrate a commitment to Australian values. Goodness knows we'll need all the help we can get in the coming years rebuilding our institutions so that they reflect those values. The challenge is not so much what numerical target to set, but rather, how to convince immigrants that it's appealing to come here, in spite of how our governments have behaved in the COVID era.

Poll 51

Our panellists were asked whether rate hikes would be necessitated in the United States, Britain and Australia.

Despite appearances – especially in the United States – the era of high inflation isn’t set for a comeback in the view of Australia’s leading economists, and most see no need for the Reserve Bank to lift interest rates next year.

Question 4

"Following the next Federal election, the incoming Federal Government should commission an independent Review of the Reserve Bank of Australia."

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

Disagree

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

5

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"

.

4

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

4

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)

Disagree

The reason that achieving net zero is sold as the right thing to do is its alleged connection to reducing the pace of climate change. Even if this benefit is real, it would not accrue to Australians due to Australia's own consumption and production choices, because Australia accounts for such a small portion of anything global, including emissions. If we decided not to dig up and sell coal to the Chinese anymore because we don't like how they burn it, someone else would sell to them instead, so nothing would be gained that way either other than a "clean conscience" (pun intended). Leaving aside that most frequently cited alleged benefit, if transitioning to cleaner energy options like solar and wind were economically appealing at the moment, then if markets were operating competitively, businesses would discover that off their own bat, and everyone would be better off (and that is already happening, to an extent - although heavy concentration and corruption in the resource-extraction industries is an impediment to this process). This poll, however, expects government to get involved, at cost, to speed up the process of transitioning Australia away from industries in which we have clear competitive advantages, like coal, to industries where our comparative advantage is less mature. We may have potential comparative advantages in things like solar power and maybe wind, but first it's unclear whether the whole-of-system impact of such technologies is actually "cleaner" than coal, and second it will take time and be costly in money and welfare terms to develop these now rather than letting the market discover their potential. Other countries have already gotten head starts over us in a number of such technologies, making the benefit to Australia even less clear. On the plus side, there may be some direct benefit of pushing for an earlier-than-"natural" transition in terms of cleaner local air, although I doubt this benefit would outweigh the costs from a significant action by government, leading me to disagree with question one. However, i would add two big caveats: (1) if we were to start investing in nuclear power, with a plan to transition to it entirely by 2050, i do think that decision would deliver a net benefit for Australia over a long enough time horizon, and hence my answer would change. The nuclear option seems so politically unpalatable that i have assumed it's not what Q1 had in mind as a mechanism. (2) if government action in this area were to significantly disrupt some of the rent-seeking going on by the powerful companies in the resource extraction industries of Australia and replace it with more competition, this would be expected to increase Australian welfare. Again I am assuming that would not be an outcome of the government action being envisioned to "achieve net zero". On Question 2, if we are to do something, a market-based system like cap-and-trade would be my pick. It allows the nomination of a specific "acceptable" level of pollution, making the trade-offs clearer than in the case of direct subsidies; it creates a situation where the companies for whom it is most costly to switch to cleaner sources are the ones to whom the right to pollute is allocated, unlike direct subsidies; and it has been used successfully in the past to deliver lower emissions and thereby cleaner air (which would be the main benefit, rather than climate change mitigation, for reasons outlined above).

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"

No additional measures

The choice of whether to be vaccinated should be an individual's, in consultation with his or her GP, based on the expected benefits and risks for that person of that vaccine compared to the expected harms of the illness that the vaccine protects against. The vaccines are a valuable component of our arsenal against covid, but the present environment in which decisions about whether to have the vaccine are occurring is heavy with social shaming, goading, moralizing, and in some cases outright coercion ? as evidenced in the alternative answers to this question, which speak of vaccine mandates, cash prizes, and other strong incentives. In such an environment, free and unhindered consent for a medical procedure cannot be given. The "incentives" we have seen governments, businesses, and schools already implement to try to twist people's arms into getting the vaccine set a dangerous precedent. Further politicization of what should be a personal health decision would take us further down the path trodden by the Nazi scientists who ran medical experiments on non-consenting people. If the vaccine were so beneficial relative to the disease ? for example, if we were dealing with the highly deadly disease of smallpox, and its dangerous but highly effective vaccine ? then people would voluntarily get vaccinated even with no "incentives". What has happened to "my body, my choice"?

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;Reforming industrial relations to boost the bargaining power o

The question underlying this month's poll is "what causes wage growth"? The two main things that cause wage growth are (1) higher labour productivity, and (2) a higher share of productivity gains flowing to workers, rather than to owners of capital. I have selected the two options in the list above that align with these underlying reasons. However, because of the absence of economic gain in the long run from bickering over a fixed pie, I would only advise that the government actually pursue one of these - the "measures to boost productivity growth". These "measures" are quite broad, from investments into better-quality school curriculums to efforts to reduce the ownership concentration (and hence increase competition, thereby spurring innovation) in different industries.

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 public charging points for electric cars

6

The EV question relates strongly to the core economic ideas of externalities and public goods, as well as to the age-old question that needs to be answered in order to justify government intervention in a market: "what is the market failure here?". On externalities, the emissions of combustion engines carry third-party costs (dirtier air for everyone) and this is something addressed in many countries, including Australia, with petrol taxes. So, one option the government has at its disposal if it wished to intervene more in the market for vehicles would be to adjust the rate of the fuel excise tax. This would then also be an effective tax on electric generators of all sorts, which also emit. EV do still produce emissions - just at the source of electricity generation, rather than via the tailpipe - so the argument for adjusting the fuel excise tax would have to be about either wanting to switch the location of pollution, or to recognise the lower (not zero) net emissions of EV compared to combustion engines, and thus the lower externality caused by driving them. However, adjustments to the fuel excise tax weren't on the list for this question. I would add that some options on the list are interventions that compel market actors to take particular actions - like bans and mandates - and these are generally a bad idea in the land of economic policy: they seek to apply direct control, rather than to remove market failures. For a similar reason, subsidising a specific good (like all-electric vehicles) is generally a worse option than adjusting marketplace incentives more broadly through correcting market failures. The reason that public goods are relevant to the EV question is that infrastructure to support driving is already funded by the government, as a public good (more or less - congestion happens of course, and some tolls exist). In the case of EV, special infrastructure is needed in order to make these new cars viable and competitive with combustion-engine cars - particularly in light of Australia's vast driving distances. Subsidies for re-charging stations along some major intercity highways would help level the playing field for EV, given that in the absence of sufficient EV traffic on the roads, the private market will not provide this public good in sufficient quantities. It's sort of like a chicken and egg problem where the government can help by buying the chicken. Again, this sort of investment only makes sense if we perceive that there is an externality problem to correct: i.e., if the net emissions of EV are expected to be lower than those of combustion engines, or if the location of emissions matters to the total externality cost paid, which could be argued to be true here because of the denser populations in big cities where the bulk of driving occurs.

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

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C

Things to commend off the bat include the further investment in employment services, traineeships, and apprenticeships, and the tax cuts for low and middle income earners. The former group of programs is useful in helping employees and employers connect with one another in mutually beneficial ways, after many links in the labour market were severed over the past year (whether before or after the conclusion of JobKeeper). I also liked the targeted support for industries hard hit by the events of the past year, although that funding (as with JobKeeper) only seems intended to keep things afloat until a return to comparative normalcy, rather than investing into Australia?s future. It was no surprise, in light of recent dramas involving the very politicians and party standing behind this budget, to hear so much spruiking of the budget?s attention to women. Funding for sexual harassment, domestic violence, childcare, medical services and even the super guarantee (itself a bad idea as it increase the cost paid by employers when they hire lower earners, and because superannuation companies are making money hand over fist from fees with every dollar saved in superannuation packages) were all presented in a woman-centric way, despite the fact that all of these things also affect men, whether directly or indirectly. There was also mention of allowing home purchases with only a 2% down payment for single parents (presumably mostly women), which is irresponsible in my view. Such a policy may sound empowering, but in fact such light down payment requirements saddle these vulnerable people with mortgage debt disproportionate to their earning potential and make them even more vulnerable if interest rates rise. Speaking of childcare, while the pre-school investments announced tonight sounded promising, I was hoping for a wiser overall childcare package in this budget. The $1.7 billion advertised as being spent on childcare appears to be only about cost relief. Where is the supply-side intervention required to make childcare services sustainably accessible and of high quality? One way to make progress here would have been to announce funding for public-private partnerships to build new centres or refurbish existing ones. The government would be well-advised to take a leaf from its own aged care package book, which with a whopping price tag of $17.7 billion aims to ?significantly improve the system? by offering a range of innovative supports, from more home care packages to training places, retention bonuses, and respite services for carers. But for childcare ? for which less support is given in this budget than for the rollout of a vaccine for one illness that mainly affects older people and has so far claimed fewer than 1000 lives in the country ? we see only a surface-level (though expensive) fiddling with the sticker price. Childcare should be viewed as the social infrastructure that it is, and invested in as such. Instead, when we heard ?infrastructure? tonight, it was mainly code for ?transportation?. A staggering amount of spending was announced for the vaccination program ? even more than (for example) the digital strategy (including cyber security, digital skills cadetship, etc). What is this eye-watering amount of money going to fund, exactly? I confidently expect that a large chunk of it will be spent on pointless consulting projects that merely serve to enrich entrenched interests without actually helping Australians. How about investing in local Covid vaccine development following more traditional manufacturing techniques that people are more likely to trust ? such as the program being pursued now at Griffith University? Extending the asset write-offs for businesses was not unexpected, but represents more easy stroke-of-the-pen measures likely to be taken advantage of by businesses that don?t really need extra assets anymore, but can get them for a song (and perhaps hope to store and then re-sell them later, rather than deploying them for innovation). Instead of this I'd have liked to see a HECS-style revenue contingent loan scheme. The ?patent box? tax relief idea (targeted for health and biotech, to be expanded to energy) may create some valuable innovation, but as the tax relief that will come from being able to tick that box represents a big financial incentive, I expect it will also trigger some abuse of our patenting system in the absence of close independent monitoring. Finally, the unemployment rate hasn?t yet been measured post-JobKeeper, and won?t capture all the damage done to the labour market during the Covid period anyway. Underemployment and poor matching of employees to employers are still significant concerns that will depress GDP going forward. Because the damage we?ve done to ourselves is worse than what one might glean from the conventional economic statistics we?ve seen so far, I don?t really believe the rosy growth forecasts bandied about tonight. Non-fiscal measures ? such as stopping the silliness of stop-start domestic lockdowns and other Covid protocols, and opening our international borders ? are required to actually recover from the situation we?ve boxed ourselves into over the past year.

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."

Other

Setting the right amount of unemployment benefit such that the unemployed are both able and motivated to seek work is a challenge for any government. After long languishing without real increases and now at punishingly low levels, the base rate of NewStart/JobSeeker should increase. As regards indexing of payments, I like the idea of a combination of CPI indexing and indexing in accordance with prevailing economic conditions. In recessions and times of higher unemployment, JobSeeker could have a supplement (as indeed it has had recently); in booming economic conditions, when it is easier to find work, this supplement could be scaled back and extra support provided instead not in monetary form but towards in-kind assistance for those still remaining in unemployment even in times of low unemployment - who are more likely to be our long-term unemployed. This would help to address the needs of the long-term unemployed that run deeper than simply a lack of money. Assistance could take many forms, such as re-training subsidies, personal coaching in how to re-enter the labour market, and/or a government jobs guarantee. Also by the way: what an antiquated idea to index the pension to the male wage. If it's going to be indexed to wages, why not to the wage of everyone?

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

B-minus really. What I liked: Bringing forward the personal income tax cuts for low and middle-income earners; some higher funding for social housing, mental health, and local infrastructure; development of the YourSuper tool to compare fees and returns of superannuation packages; some attempts to kickstart investment by small and medium-sized businesses (asset write-offs, loss carrybacks). What I didn't like: Not even an attempt to move in the direction of universal childcare provision. Out-of-pocket childcare costs are a tax on working, and free childcare is therefore a massive stimulus to young workers. Fully-funded, high-quality, accessible childcare offers a triple benefit for Australia: it releases labour and raises welfare today, it creates jobs everywhere (including in the regions), and it creates a more productive, happier, healthier next generation. I also didn't see enough support for aged care in the budget. In general, going forward we need to move away from quick and easy stimulus policies (like JobKeeper, the asset write-offs, and the JobMaker subsidies for hiring young workers), avoid the well-worn trap of funneling money into boondoggle infrastructure projects that mainly serve to enrich large, well-connected companies, and move towards longer-term, sustainable support to release supply and demand from SMEs and everyday Australians that will help lift the economy back up over the next few years. Some options include a revenue-contingent loan scheme for small and medium-sized businesses, an income-contingent loan scheme for individuals, and the re-establishment of a national bank to make Australians less dependent for their everyday banking needs on the rent-seeking commercial banks and also make it easier to deliver stimulus (like income-contingent loans!) quickly when needed now or in future recessions. Like establishing universal child care, none of these options is a 'stroke of the pen' initiative: they take time, thought, and resources up-front to ensure good design and good implementation.

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, Social housing, Funding higher quality aged care, Increasing subsidies for child care

By "increasing subsidies for child care" I have in mind investments towards the universal provision of free high-quality, accessible childcare to all Australian families. By "social housing" I have in mind interventions to encourage the more efficient use of existing housing stock - such as providing incentives for empty-nest families to move out of large homes, and for young people to house-share - and also investment in a particular type of what could be termed local infrastructure, such as subsidies for the construction of well-located, lower-rent high- and mid-rise apartment blocks targeted to younger and lower-income segments of the population. By "funding higher quality aged care" I mean investments into discovering what works best to support quality and quantity of life for elderly people, and implementing these changes (which may include changes in the training of workers in the aged-care industry) together with changes as necessary to the government-run long-term-care financing scheme. By "expanded investment allowance" I mean adopting a well-designed small-scale HECS-like loan scheme for small and medium-sized businesses to encourage these businesses to invest with minimal downside risk over the next 6 to 12 months. The first two of these interventions are intended to boost aggregate demand in the short run; the first three, to invest in the longer-run productivity and wellbeing of Australia; and the fourth, to support the supply side of the economy in the short to medium term until demand recovers. However, the best thing the government could do with its money to help the economy right now is to buy border re-openings from whoever is responsible for keeping Australia's domestic and international borders shut. Obviously there is no direct market for this, but there is for sure an indirect (politically-mediated) market.

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 abandoned

6

In the present circumstances, we should be far more worried about spending power today than in the golden years of present-day workers. Increasing the super guarantee would also put more money into the hands of super fund managers, while our focus right now should be on those at the other end of the income spectrum - low-income workers. To help these people have a decent retirement we should opt for changes to the age pension instead of changing rules around superannuation. Leaving more money in their hands (rather than squirreled away for their retirements, with a fraction paid to fund managers) will not only be better for their standard of living today, but also promote higher aggregate demand, due to their higher propensity to spend compared to higher-income workers.

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

9

The debt is not a problem per se. Government expenditure during a downturn (which accumulates debt) is a concern if it is directed toward purposes that will not serve to support Australia's economic stability and recovery, or if it is so substantial and/or financed in such a way that it creates inflationary pressure. Neither appears to be the case now.?

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

The main reason to agree with this proposition is that businesses in industries that have been particularly hard-hit by the recently-induced economic downtown are disproportionately likely to depend on minimum-wage workers (particularly hospitality and retail). Those industries are going to suffer business closures regardless of what we do, and on the margin some closures of well-run businesses that we would like to see continue might be averted by keeping the wage bill down. Also, a frozen minimum wage means that we can spread the wage bill of a given company around to more workers, helping to reduce inequality in the impact of the downturn. Some prior research has found that higher minimum wages do not translate into more unemployment, but those studies have been run in normal times, with robust demand in place and with businesses not operating as close to the margin of profitability as what we are seeing now (and likely to see for many months). The final arguments in favour of the proposition are that Australia's minimum wage is already quite high by the standards of peer nations, and that the majority of workers in Australia are covered by award rates or EBAs. For them, the minimum wage does not bind.

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."

Part1 - Disagree

10

A couple who chooses to have children can organize this in any number of ways around one or both parent's careers. It requires forward planning and coordination, and how easy it is depends heavily on whether the couple chooses to have one person stay at home (the man or the woman) or work part-time to look after the children. My responses should not be interpreted to mean that there is nothing Australia could do to make it easier for people to combine children and careers. However, the focus on the plight of mothers versus fathers distracts from the real issues, such as the scarcity of affordable, high-quality daycare with attributes that align with the needs of working parents.

Part 2 - Disagree

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"

Disagree

7

The key word is "likely", and the hidden implication of the question is that we are comparing the costs of a policy environment in which "eventually everyone gets it" to the costs of a policy environment in which it is "eventually eradicated". The latter state of the world is unlikely to be achievable. Many people in Australia likely already have had the virus, without knowledge or symptoms (but hopefully, now, with antibodies). Moreover, trying to resume operations domestically and with the rest of the world while at the same time moving towards eradication of the virus through implementing the degree of social distancing required to drive R below 1 will create continuing, massive economic costs that I suspect are far greater than the (quality life years-reckoned) cost of the COVID-19 deaths and suffering that we would thereby avoid. I think it is far more likely that the ex-post optimal thing for Australia to have done is to never have had an enforced lockdown, to have encouraged people to continue to operate as normally as possible while taking sensible precautions (see Sweden), and to have moved over the past few months towards more and more young and healthy people building immunity in order to protect our most vulnerable people moving forward, including potentially into the second and later waves of the virus.

Poll 31

Proposition 1: "The best economic policy instrument available to policy makers seeking to address obesity and related health issues in Australia is the introduction of a tax on sugar sweetened beverages (SSBs)."

Proposition 2: "The health and non-health benefits from a tax on SSBs are likely to outweigh the possible costs felt elsewhere in the economy."

1 - Disagree

2 - Disagree

1 - Obesity is mainly the result of psychological/mental problems, so a long-run strategy to address it needs to involve policies that improve the psychological/mental health of those at risk for obesity.  Policies that try to make the ambient environment less obesogenic (like the SSB tax, but also efforts to improve access to exercise infrastructure and healthy food options for the poor) are likely to be somewhat helpful, particularly for children for whom poor choices and the development of poor habits in childhood may have lasting impacts into adulthood, but they do not treat the root cause of obesity.  The root cause is much harder to influence through conventional economic policy.  Broadening the definition of economic policy, we might consider imposing requirements on day care programs or schools that receive public funding to embed interventions like self-positive programs, self-discipline training techniques, and local contests that elevate interpersonal support and community production.  Confining oneself to conventional economic policy, one could implement a fat tax - i.e., have all ATO offices install scales, and every taxpayer who falls under a certain threshold BMI (like 30) qualifies for assessment at a lower marginal tax rate, or gets a tax credit, or something - and if hefty enough and publicized enough i'd expect such a tax policy to shift weight, but something tells me that this approach wouldn't be particularly politically palatable.  It would also be regressive, as would virtually any economic policy measure that targets obesity, because obesity and income are strongly negatively associated.

2 - This is a margin call. The main benefits would probably be in terms of reductions in weight and dental cavities, which can be estimated with reference to recent evaluations of SSB taxes that have been imposed in other countries. The drawbacks of an SSB tax include that it is likely to be regressive, and that drink makers may switch to artificial sweeteners that come with their own negative health consequences.

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

4

Part 2 - Disagree

8

A system of professional accreditation makes sense in the case of professionals to whom authority is delegated to make important decisions on behalf of an individual, group, or company - such as those who manage money for clients (https://www.fma.org/finance-certifications) or those who complete others' taxes ("certified public accountant"). These certifications are a way of addressing the problem that the services of a professional acting directly on one's behalf are credence goods: we don't know their quality, instead choosing whether to believe in it (a job made simpler with accreditation as a signal!), until after the service is rendered, or possibly never. By contrast, while some economists, such as economic consultants, do provide advice, they typically do not take direct action on behalf of clients. This, combined with the large costs and known problems with barriers to entry that an accreditation system would create, tips me against supporting professional accreditation for economists. With the barriers to entry created, I doubt that professional accreditation would draw more people in on net, though it's hard to be sure. Perhaps such a system would make it clearer to some young people that we actually do useful stuff, and thereby increase demand. That said, there is a credence good type problem in curriculum-setting for economics, given that the main forces steering economics curricula in secondary and tertiary settings today to reflect bona fide economics content are the unseen commitments to promoting bona fide economics arising from the prior indoctrination of existing economists (if any) who are consulted in preparing such curricula. These forces are strong, but others forces that are not strongly aligned with embedding authentic, high-quality economic content into our curriculum are also strong - forces like profit-seeking for dodgy education providers and the desire for turf control for state-wide curriculum-setting committees. Bearing in mind that the quality of an economics curriculum is best judged by an experienced economist, my suggestion related to this month's propositions would be to exploit the existing institution of TEQSA, which is supposedly tasked with quality control of university education, to contract the Economic Society of Australia to set up and run a system of certification for tertiary curricula based on the National Learning Standards in economics that have already been developed and endorsed by the ESA (https://www.economicslearningstandards.com/). The ESA would hire experienced economists from Australia or overseas to perform these reviews periodically, creating a "curriculum certification" rather than a "professional accreditation" scheme. This is along the same lines as what some of our most prestigious universities opt into when they seek EQUIS or AASCB accreditation, but would be specifically designed to review and certify (or not) the economics education on offer at any Australian university, helping to address the credence good problem in economics curricula.

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

The question asks whether there is at least one existing tax that reduces welfare more than a congestion tax, a question to which the answer is almost surely yes. A congestion tax is likely to be progressive, as it will be paid disproportionately by those who must travel at peak hours (i.e., people with jobs), although some incidence may fall on low-wage workers who do not have the labour market power to escape the tax. For this reason we should be careful in implementation not to apply the tax to all methods of transport at peak hours - for example, to leave buses out of it, and/or car travel on secondary roads. As with sin taxes, the behavioral distortion induced by a congestion tax is likely to be pro-social: a reduction in costs paid by others due to the behavior that is reduced (though those others will in fact be the same people who pay the tax, rather than second-hand smokers who are not paying the tax). What taxes are likely worse for welfare than a congestion tax? Some likely candidates are stamp duty, personal income tax on any bracket below the top, the Medicare levy. A final caveat though that in implementation, tax revenue often gets earmarked for particular expenditure categories, and this political problem could make a congestion tax less appealing: for example, if the money raised by the tax gets ploughed into building a highway expansion that only the rich really need, rather than spending on welfare programs or extending the subway lines to under-served poorer suburbs.

Poll 27

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

Disagree

5

"No impact" is too precise a prediction to agree with. However, the much-fanfared changes to the US's headline corporate rate mask many details in relation to state tax rates, exemptions, and other rules and opportunities that combine to make the change in the effective US corporate tax rate in all likelihood far less dramatic than the change in the headline rate. Furthermore. corporations do not base their investment decisions entirely, or even primarily, on differences in taxation regimes between countries. Australia will continue to offer companies a unique mix of inputs, infrastructure, institutions, and market access in the Asian region. Yet the rate changes are being noisily advertised, which is likely to prompt some businesses to at least reconsider their international positionings. I would expect the new rules to trigger more changes in the global distribution of where companies park their profits than in the global distribution of where they invest or conduct business. Australia may be affected somewhat by the former and probably not much by the latter, to the extent that the latter occurs more than negligibly.

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 - Uncertain (neither agree nor disagree)

2 - Agree

1 - The debt-to-GDP ratio is an odd bird in the first place, as by combining a stock measure corresponding to the government's position and a flow measure corresponding to the entire nation's position, it is not interpretable using conventional economic logic. It does not capture the government's ability to re-pay its debt since it does not accommodate tax rates and regulations, and it does not capture the nation's ability to keep growing as it does not capture the suite of things funded by the debt (which could be any number of things, running the gamut from education to defence). The ratio is arguably a noisy signal about the economic health of a nation but it is a symptom, not a cause, and the cause can be of very different economic import for different nations. Whether slowing up the recent growth we've seen in the Australian debt-to-GDP ratio is something that should be "a priority" is hard to answer mainly because it depends crucially on how it's done.

2 - Australian tax rates are of the same order of magnitude as those of its peers. Despite the media frenzy about Trump's latest tax cuts having ripple effects for other countries as they lose their international competitiveness, I don't see that as a major concern for Australia. I just do not think the sensitivities of the decisions of individuals or corporations to tax rates in isolation are strong enough. Hence the reason to respond "Agree" to this proposition is that I disagree that tax cuts should be on the table at all at this time.

Poll 29

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

Agree

10

As written, this is an econ 101 sniff-test question. Of course increasing the supply of a good drives down its equilibrium price, holding everything else constant. In the case of the Australian housing market, however, the signs indicate that much of the housing supply being created is actually not meeting the demand in the market that is feeling the unaffordable prices. Many new homes are built in areas where few people want to live (sometimes due to zoning restrictions, as indicated in the RBA report), and many homes are snapped up by rich and/or foreign investors (because they can, and are further encouraged by various Australian tax and other laws) who are not the less well-off Australian residents presently prevented from accessing good housing to live in who generate a lot of what we think of as the unmet demand in the market. Phillips and Joseph find that housing supply growth has outstripped local household growth, yet still this seemingly steep growth has not saturated the market to the point that prices stop rising. This perhaps perplexing fact is a signal of the disconnect between who is trading in the goods being supplied, on the one hand, and who is forming the demand-side source of the felt shortage, on the other. Through this lens, the Australian housing market is a dual market: one for the rich and/or foreign investors, and another one for Australian residents who need homes in decent places to live in. The first of these markets is humming along fine, and the second is massively under-supplied. All of this said, there is some overlap between these two markets. In a counterfactual world where the houses recently built had not been built, and everything else was held constant, prices would have been even higher than they are in our actual world.

Poll 30

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

Disagree

7

The proposal is an impossibility, given that there is no single price for road-use paid by fossil-fueled vehicles: the fuel tax impacts different fossil-fueled vehicles differently, depending on the very factors mentioned in the question. Electric vehicles do enjoy some advantages that the government could withdraw, which counterbalance to some extent their disadvantages (e.g., high price, inconvenience of re-charging, limited range), but the fact that fuel-powered vehicle sales still vastly outnumber sale of electric vehicles in Australia shows that the median Australian consumer still prefers the former - so present policy settings are not creating a significant distortion in favor of electric vehicles. As electric vehicles become more competitive with fossil-fueled vehicles in terms of price and other features, it may make sense for governments to change their road-maintenance funds collection mechanism away from fuel taxes and towards other types of taxes, tolls, and/or levies. As a more general point, moving ourselves away from fossil fueled vehicles and towards vehicles that create emissions through draws on the national electricity grid rather than at point of operation may make it easier for policy-makers to monitor and/or manage environmental pollution.

Poll 35

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

Disagree

7

There are ways to do this, but they have so for proven infeasible for political reasons. Some options are: (1) the (re-) creation of a state bank, whose remit is to handle basic banking and mortgage services, leaving only the complex and high-margin business for the retail banks to compete over (this reduces the welfare take of retail banks overall, while concentrating the take that remains amongst Australia's richest consumers and businesses); (2) the introduction of third-party regulation of banks, ideally by international parties that have no financial or political stake in the outcome of their reviews; (3) government subsidization and coordination of Australian consumers' access to overseas providers for particular services that are particularly over-priced or unavailable here, such as superannuation management or educational savings management. What you need is either to increase competition for the business that Australian retail banks presently hold a joint monopoly on, and/or to authorize a dispassionate party to (at least temporarily) take away the right to trade from retail banks shown to be gouging consumers.

Poll 32

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

Disagree

6

Setting high landfill charges is a brute-force and misguided way to try to encourage recycling in a setting where the market's capacity to accommodate recycling is inadequate.  Also, the breakdown into landfill versus recyclable waste in Australia's current waste management system is on par with peer nations.  Rather than narrowly targeting how much we are putting into landfills, the government would be better advised to subsidize the domestic recycling industry in the short run in order to build up our capacity to process the quantities of recyclables that Australia generates. The money to pay for such a subsidy could come from levies on companies that use environmentally unfriendly (i.e., landfill-bound) packaging or in other ways leave high environmental footprints via the production and sale of their goods.

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 - Uncertain (neither agree nor disagree)

1 - Both due to changes in regulatory requirements and due to banks' strategic incentives (as distinct from economic necessity), there is a reasonable chance that lending restrictions will become tighter.  Banks of course are shouting loudly about the negative impact the Royal Commission's review will have on Australians, because that argument makes them look like stewards of our welfare rather than businesses that have been spoilt by a sweet sham called "industrial self-regulation" under whose banner they have abused the trust and reduced the welfare of Australians for years. The Royal Commission's report intends to cast light on this latter concern, which is far, far more economically important in the medium and longer run than the credit tightening that the banks are tsk-tsking about.

2 - To the extent that credit is allocated more efficiently (i.e., to borrowers who will produce more with it, pay it back with higher likelihood, and so on) as a by-product of less of it in total being given out, this may have positive longer-run economic consequences for the country.  Certainly one must expect a clean-up of Australia's financial industry as a whole, of which the Royal Commission's review is a first step, to have positive long-run economic consequences.

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."

Uncertain (neither agree nor disagree)

8

On the one hand, the reduction in involvement of central wage-bargaining bodies that should be expected to accompany a rise in contractual labour in a given occupation should be expected to put downward pressure on wages. On the other hand, many of these workers' wages will already be bound by award rates or the minimum wage. Also, the conditions of workers who are sub-contracting might improve from the perspective of having greater flexibility to choose their working hours and types of jobs, although other conditions might become worse.

Poll 25

Proposition 1: "The modern phenomena of information overload and social-media-fuelled 'fake news' bring into focus the value of quality journalism. Quality journalism has a public-good dimension that warrants public support."

Proposition 2: "The Australian government presently provides funding for the ABC and SBS, Australia's independent public broadcasters. The Australian government should increase its financial support of quality journalism."

1 - Strongly agree

2 - Disagree

1 - While the independence of public broadcasters is never fully immune from political threat, in a democracy a public broadcaster is in theory not primarily motivated by either political ideology or profit-seeking. The providers of all other sources of "news" do have one or both of these motivations, both in theory and in practice, which can imperil their ability to claim unbiased reporting.  One force working against the total debasement of private reporting is the professional ideal of 'quality reporting' that characterises the journalistic profession itself and helps to keep journalists in line through self-monitoring, but even this ideal (a public good itself) is indoctrinated (or not) through the education system, which is largely state-funded.  Another countervailing force is the ability of the population at large to smell a rat and thereby keep fake-news from getting too far away from reality, and that (in)ability too is a product of education.

2 - The ABC and SBS reach the vast majority of Australian households - the primary decision criterion on this question - and offer a variety of types of programming to suit a reasonable number of tastes for learning and entertainment.

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

9

Apart from the additional wedding expenses and other joint investments on the margin that might not otherwise be spent (joint investments by heterosexual couples are higher in marriages than in co-habitations, and I'd expect the same for homosexual couples), legalising same-sex marriage will allow Australian parliamentarians and the public to move beyond this contentious issue and focus on other things. My answer reflects an optimism that the time and effort freed up after same-sex marriage is legalised will be spent on things that will in fact result in net economic benefits for Australia. Same-sex marriage legalisation may also be seen by some as a tick in the box of "we are all in this together," a message that is good for the collective morale (and hence productivity) of the nation. I see no economic downside to legalising same-sex marriage.

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 - Uncertain

AI is the latest form of capital that throughout its history has combined well with skilled humans, leading in the latter part of the last century to what economists christened "skill-biased technological change" in which people with higher levels of human capital saw their wages go up faster than those with lower levels of human capital due to being able to combine their skills with technology.  As with previous technological changes, the AI revolution will not only increase the marginal productivity of labour for highly-skilled workers, but will significantly change the content of many jobs.  Human mediation will nevertheless still be required to apply AI effectively to production and distribution processes, and some of those mediation and support jobs will not require exceptional levels of intelligence or skill.  Human service provision in certain industries will also continue to constitute a differentiated product from AI provision, with accompanying demand for it.  The binding constraints we see now on productivity in many industries will change, and the nature of many jobs will change, but we will adapt without huge increases in the count of long-term unemployed even if the government does nothing to help.

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)

8

I agree with this statement up until the final word: infrastructure. Australia's government debt levels relative to its peers are not alarming (https://data.oecd.org/gga/general-government-debt.htm) and in the current environment of low interest rates, it is sensible to review the government's investment portfolio against what Australia's needs are likely to be in 10 to 20 years' time. Rather than tangible infrastructure, my pick for increased investment would be research and development - particularly blue-sky research funding, which delivers historically large long-run returns on investment, and funding of research in areas of potential industrial comparative advantage for Australia (such as solar power generation) - and this is an area where Australia lags its peer nations (https://theconversation.com/infographic-how-much-does-australia-spend-on-science-and-research-61094). Some R&D costs would be classified as infrastructure, hence my response of "uncertain".

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."

Strongly disagree

7

The rationalisation provided in the Finkel review for adopting a certificate-based scheme rather than some other means of market intervention towards lowering emissions due to electricity generation does not convince me that the authors fully understand the alternative market-based mechanisms of achieving emissions reductions.  It is possible that the institutional history of the Australian electricity sector and/or the ambient sophistication of its players would make another type of scheme tricky to implement in this country, but a convincing economic case for why a certificate-based scheme would be easier to implement is not made in the report.  Political arguments are offered instead - to quote from the report:  "The Panel notes that many stakeholders have expressed strong support for an EIS [emissions incentive scheme, the primary alternative to a certificate-based scheme that the report considers]. The Panel also notes that to date the Australian Government has ruled out implementing an EIS."  In general, economic logic tends to favour interventions to account for externalities that rely less on regulation and (costly) local enforcement, and more on creating an institutional backdrop for market activity that gives rise to incentives that will work all by themselves at the local level with minimal (costly) local monitoring and enforcement.

Poll 20

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

Uncertain (neither agree nor disagree)

7

Both health and education services have a strong credence-good dimension, due to information asymmetries about service quality between suppliers and consumers, and both also often involve some of the biggest and most influential investments of people's lives. For these reasons, the institutional backdrop against which for-profit delivery of such services occurs must be set up very carefully. The potential for scams, particularly in the case that providers have no existing long-run institutional reputation to protect and/or serve each of their customers only once (reducing the market-facilitated punishment for poor service), is high. Ideally, for-profit providers would be allowed into such markets only when there is already an accessible, low-cost, good-quality public provider, so that real choice is available to consumers; when a cap is set on the fees that can be legally charged, in order to reduce the size of the profits obtainable by any for-profit entrant; and in the presence of a quality-certifying mechanism operated by independent (i.e., not captured) monitors. There are examples of good-quality health and education services delivered by for-profit providers both in Australia and overseas, so it's not impossible to engineer.

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

There are obvious things that the government could do to help women access traditionally male-dominated positions in Australia, such as prioritizing quality, flexible childcare access for all parents. The government could also mandate the removal of gender-biased ("maternal", "paternal") language or conditions within parental leave policies, and invest in programs that try to embed the notion that women can succeed in traditional male occupations (like CEOs) and men can succeed in traditionally female ones (like nursing). However, it's impossible to force people to take up certain jobs, and even were access to every occupation exactly equal for the two genders, for the foreseeable future we will continue to see occupational gender segregation due to preferences. If these preferences are driven mainly by entrenched cultural norms, then we may see them change over time (and for this reason i disagree with the absolutist statement that gender desegregation can ONLY be achieved through government intervention). To the extent that different work-type preferences by the different genders are hard-wired, we may be stuck with them and their labour market consequences.

Poll 18

"Given the Commonwealth Treasury?s ongoing difficulty in making accurate forecasts of some of the key economic variables underpinning the Budget ? in particular nominal GDP growth ? the Government should ?outsource? the economic forecasts used in framing the Budget to an independent agency (such as the Parliamentary Budget Office), as now happens in the United Kingdom."

Disagree

7

Accurately forecasting national macroeconomic aggregates for Australia is a difficult job that many private-sector organizations already have an incentive to do. International organizations also try to do it. While an argument could be made that these incentives for other players imply that generating official government forecasts in-house is optional, forecasting the country's progress is a natural role for a competent government to take on: it has a public-goods aspect, can inform policy (including the development and refinement of economic measures), and nurtures economic competence within the country's public service. Whether to split the forecasting job off from other Treasury responsibilities and give it to a separate government department is a second-order question to which the answer depends on factors like the degree of bureaucratization and the returns to scale and specialization within the public service.

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."

Agree

7

What's initially unappealing about this proposal is that it constitutes an intervention in a market that doesn't appear to be exhibiting an obvious market failure. However, there are two reasons to support this policy. The first is that unlike in the case of most protectionist-style policies, the group benefiting from it would be not a small subgroup, but rather all of Australia - anyone who uses natural gas, which is essentially everyone. Australian politicians have previously failed to find ways of extracting some of the surplus created by the country's rich natural resources and channeling it towards the people (with the shining example of this failure being the mining tax debacle), and gas reservation constitutes an alternative mechanism for doing basically the same thing. Second, the world price of a crucial productive input like natural gas may be affected by things other than "traditional" market factors, such as financial speculation on future prices, and protecting Australian consumers from unpredictable price fluctuations in core commodities due to socially unproductive speculation is a pro-social thing for the government to do.

Poll 16

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

Disagree

5

The longer-run effects of implementing full capital gains taxation on housing investment are not obvious, but may well include upward pressure on housing prices due to weaker incentives to develop and supply properties to the market. If the policy goal is increased housing affordability, then other levers should be considered, such as government auctioning of the right to re-zone urban areas in order to build upwards.

Poll 15

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

Agree

7

The reasons why macroeconomic aggregates move as they do are found ultimately in the responses of individual economic actors - consumers, producers, exporters, importers, workers, employers - to changed circumstances.  Each agent reacts individually to changes in the prices, constraints, competitors, information, and so on that s/he personally faces.  These myriad individual reactions combine to create dynamism in the whole economy that we can analyse using the tools of macroeconomics.  Teaching how single agents are likely to respond to changes in their economic circumstances, which is the focus of basic microeconomics, is therefore a natural first step on which to build a deep understanding of macroeconomics.

Poll 14

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

Disagree

3

Quantifying the social damage for which gambling is directly or indirectly responsible is not easy. As with other "sins" (e.g., drinking, smoking, drug use, prostitution) there are many potential costs and benefits both to individuals and to whole groups, and which of those materialises in any given instance is both hard to measure and dependent on unseen factors like stress levels and cultural norms. Any answer to this question hence requires making a call on the net influence of these background factors, plus a commitment to some taxonomy of good and bad (e.g., is it "good" or "bad" for people to get high once in a while?). As with other sins, the canonical economic advice would be to keep them legal (if regulated) so as to avoid pushing them into a black market, enabling society to see the behaviour: the government can then use that visibility not only to tax the behaviour, but to try to work against the worst of its negative effects.

Poll 13

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

Agree

9

Clinton provides superior stability and policy certainty, and she is also a bigger supporter of free trade policies, and these aspects of a Clinton presidency would both work in Australia's favour.  Also, if Trump were to become president, the political influence of the USA on the world stage would likely decline at least temporarily, and this would indirectly affect Australia as an ally of the USA.

Poll 12

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

Strongly agree

9

Australia's strongly skill-biased immigration program creates a modest flow of mostly English-speaking immigrants that almost surely adds to the country's net economic capacity now and in the future. The only reason not to agree with the statement is if one took an alternative scenario in which we had higher levels of immigration - quite possibly more favourable to the country than the present level - as the counterfactual. As it is written, the question appears to assume a "no-immigration" scenario as the counterfactual. Arguably this is silly, however: have we ever had zero immigration? Australia is largely a nation of immigrants and we have built upon and benefited from their/our diversity and innovations over generations. Why stop now? The main priorities in this policy arena should be to keep the immigration flow reasonably skilled, and to support the cultural assimilation of immigrants in the medium run.

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

Strongly agree

9

Many aspects of real-life decision-making have no clear analogue or explanation in the world of traditional economics in which self-interested, atomistic, fully-informed agents allocate their resources by applying cold and near-perfect optimisation. 'Behavioral economics' is the umbrella term under which sit many attempts by economists over the past 20 years or so to explain these aspects of decision-making in ways that are consistent with an expanded notion of economic reasoning and can be integrated with existing economic models. The lessons from these attempts have been both new (to economics) and useful (to policy-making and, potentially, to welfare).

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

Let's get real: governments "nudge" people all the time, intentionally and unintentionally (though usually the latter). The "extra nudging" that may result from an active attempt on the part of some sub-group of policy-makers to encourage people to make (slightly different) decisions (slightly differently) will, in any modern democracy like Australia, be overwhelmed by the multi-dimensional chaos of phenomena that characterises the interaction of citizens with government-influenced constraints. Even if there were a meaningful effect, if the government's objective is to increase aggregate welfare, I see no ethical dilemma:  it is the government's job to maximise social welfare, so one could argue that not using proven insights to design better policy would be negligent of the government, and hence unethical. Would it be possible for a governmental official to attempt to "use" behavioural economics to lower aggregate welfare?  Yes, and that attempt, even if unsuccessful, would arguably be unethical, but then we are mainly talking about corruption - not behavioural economics-guided nudging. (I am assuming throughout that we are speaking of reasonably well-proven and robust insights, not merely conjectures on which the health of the realm should not be bet.)

PART 2 - Strongly disagree

9

Let's get real: governments "nudge" people all the time, intentionally and unintentionally (though usually the latter). The "extra nudging" that may result from an active attempt on the part of some sub-group of policy-makers to encourage people to make (slightly different) decisions (slightly differently) will, in any modern democracy like Australia, be overwhelmed by the multi-dimensional chaos of phenomena that characterises the interaction of citizens with government-influenced constraints. Even if there were a meaningful effect, if the government's objective is to increase aggregate welfare, I see no ethical dilemma:  it is the government's job to maximise social welfare, so one could argue that not using proven insights to design better policy would be negligent of the government, and hence unethical. Would it be possible for a governmental official to attempt to "use" behavioural economics to lower aggregate welfare?  Yes, and that attempt, even if unsuccessful, would arguably be unethical, but then we are mainly talking about corruption - not behavioural economics-guided nudging. (I am assuming throughout that we are speaking of reasonably well-proven and robust insights, not merely conjectures on which the health of the realm should not be bet.)

Poll 9

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

Disagree

4

The popular vote in favour of Brexit seems to have resulted mainly from fear amongst Britain's citizens that the free immigration flows into the country from the rest of Europe were having negative effects - such as increased competition for domestic jobs and increased risks of violence at home due to radical Muslim influences.  Britain's contributions towards propping up Greece and the other PIIGS may also have scored some influence. Whether and how these aspects of Britain's relation to the rest of Europe will change with Brexit depends entirely on the terms of that exit, which have yet to be negotiated. What we do know is that the markets seem to think that Brexit was a bad idea in the short run (the GBP fell), and that policy changes that make it more difficult for Britain to do business with the rest of the world, like increased tariffs on British goods shipped to other European countries, would be predicted to damage Britain in the medium and long run.

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

In the long run, the engine of economic growth is not the dissemination of existing knowledge but the discovery of new knowledge. The judgement that education investments are more likely than business tax cuts to lead to innovation assumes that some of the proposed education spending will flow to the university system, where much new knowledge generation occurs; it also assumes that businesses' elasticity of knowledge generation with respect to tax obligations is small, which is the case if the proposed tax breaks mainly increase profits or salaries without spurring knowledge-discovery investments. This is likely to be true in many of Australia's oligopolistic industries. Further, preserving a healthy state is essential for long-run growth, and investments into training the next generation of Australian citizens are more likely to maintain a healthy state than reductions in the funding provided to the state by the businesses that benefit from its present institutions.

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

Many OECD nations have quite similar fiscal situations as Australia, and politicians' harping on about the national deficit - like the harping on about national debt - seems driven mainly by the desire to be seen by voters to care about something important rather than to do what best promotes social welfare. The plan to recover surplus gradually by 2020-21 seems reasonably aligned with the strategy of spending into deficit when times are tough, in order to prop up the economy, and getting back into surplus at a steady pace (as well as spending down the national debt, when possible) during better times. Some opportunity to recover fiscal strength was lost during the mining boom, but that is a story for another question.

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

7

The commodity-led boom Australia experienced due to Chinese demand for our raw materials is unlikely to be echoed in a boom led by Chinese demand for our services in the coming years because, while they cannot copy Australia's raw materials deposits, the Chinese are largely able to copy Australia's service sector products in the medium run. Our educational exports are likely to remain strong for some time, but Chinese universities are developing quickly and over time a larger share of the best Chinese students will be educated in China. Other services Australia could provide will gradually become home-grown in China as that country develops, and from the perspective of Chinese consumers these services will be not only in a preferred language and location, but likely cheaper than what Australia can offer with its high labour costs.

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)

7

Major sporting events stimulate consumer spending on merchandise and other event-related goods, generate some local employment and occasionally some new infrastructure, and also strengthen patriotic or at least region-specific sentiment. However, government funding for such events crowds out spending on other goods and services that provide benefits to a wider swathe of society, and/or whose benefits last for a longer time (e.g., basic infrastructure, education, health). Hence, the "net" effect on the city or region is difficult to be sure of in the abstract.

Poll 4

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

Strongly agree

8

Complex tax laws are an open invitation to taxpayers to find creative ways to gain from special concessions or complicated loopholes, because a law's complexity increases the difficulty faced by government in monitoring compliance. Taxes make up a big chunk of gross earnings, so the incentives for taxpayers to find ways of violating the spirit of the law but not the letter are also high. For these reasons, the waste generated by the present proposal - in terms of government support for bad projects and taxpayer resources spent on creative tax accountants - would likely be significant. Far better to support innovation through more direct and more efficient means, such as direct competitive grant programs and other tournaments, subsidized job fairs and other contact-making events, and wise investments into the basic infrastructure and higher education that are inputs into innovation.

Poll 3

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

Disagree

6

This may be true for some people - even those whose preferences (like most people's) include things like being loved, understood, and cared for. However, a norm in our society is that the existence of these intangibles of love and understanding is outwardly proven partly via personalized material gift exchange on special occasions. For this reason, NOT giving a thoughtful gift to a loved one at the holidays would be seen by many people as a slight. A lesser slight can still be felt at the receipt of a simple money gift, which betrays no personal understanding of the recipient.

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

The Commission's arguments are well-founded theoretically and accurately describe current realities. These realities include frustrated would-be Sunday buyers, long hours of weekend work by owner-managers who cannot afford Sunday rates, and dysfunctional incentives for workers to substitute Sunday work - if they can find it - for investments in further skills. Arguably the very social activities that the Sunday pay rates supposedly support are presently hampered by the inaccessibility of places to buy goods and services that are complementary to those activities (e.g., cafes, restaurants, alcohol, etc.). The potential countervailing force against employment rising as a result of this change is workers' unwillingness to work on Sundays. I suspect that this imagined unwillingness is not the binding constraint in the market at present, and that the binding constraint is instead the present unwillingness of employers to provide jobs on Sundays at outlandish rates of pay.