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Author's Name: Nigel Stapledon
Date: Tue 12 Feb 2019

Nigel Stapledon

Dr Nigel Stapledon

Andrew Roberts Fellow and Director Real Estate Research and Teaching, Centre for Applied Economic Research, Australian School of Business, UNSW

  • Commonwealth Treasury 1980-86.
  • Westpac Banking Corporation 1986-2003; Chief Economist, 1993-2003.
  • President, Economic Society of Australia, NSW, 2001-05.
  • Member, NSW HSC Economics Exam Committee – 2011-14.
  • Associate Head of School, UNSW School of Economics –2008-13.
  • Andrew Roberts Fellow and Director Real Estate Research and Teaching, Centre for Applied Economic Research, Australian School of Business, UNSW – 2013 to date.

Subject Area Expertise

Broad area of expertise is in macro-economics, reflecting experience at Treasury and Westpac. More recently, specialised expertise in the area of real estate/urban economics, covering microeconomic and macroeconomic aspects of housing.

Website

Linkedin URL:  https://au.linkedin.com/pub/nigel-stapledon/2b/4a9/80b

 


Responses (8)


Social Distancing Measures, May 2020

Poll 38

"The benefits to Australian society of maintaining social distancing measures sufficient to keep R<1 for COVID-19 are likely to exceed the costs"

 

Agree

3

The health benefit is very clear. Sustained R>1 implies exponential outbreak. But R<1 could be elimination or containment, and the economic cost of the two could be very different. The more nuanced question would be the cost of elimination (and stay eliminated) strategy vs containment strategy (able to put out spot fires) which implies taking some risks. Elimination could free up the domestic economy but would for example require borders closed for a long period. For an open economy like Australia that will impose a large cost (on international traded services). It would probably preclude even the small risk with say allowing foreign students to return - down the gurgler for universities. We need to take some non-zero level of risk. Otherwise, the cost will be probably be too high.

Agree

3

The health benefit is very clear. Sustained R>1 implies exponential outbreak. But R<1 could be elimination or containment, and the economic cost of the two could be very different. The more nuanced question would be the cost of elimination (and stay eliminated) strategy vs containment strategy (able to put out spot fires) which implies taking some risks. Elimination could free up the domestic economy but would for example require borders closed for a long period. For an open economy like Australia that will impose a large cost (on international traded services). It would probably preclude even the small risk with say allowing foreign students to return - down the gurgler for universities. We need to take some non-zero level of risk. Otherwise, the cost will be probably be too high.


Will building more homes make housing cheaper? - May 2018

Poll 29

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

 

Strongly agree

10

Clearly demand (and tax) factors do matter. But Australia is not unique in having high house prices so blaming factors (pretty much) unique to Australia (e.g. negative gearing, capital gains (our cg rate is not low)) is 'easy' but does not stand up to scrutiny no matter how many times it is repeated. More importantly, on the argument that says that supply does not matter, the issue is that restricted supply (zoning, urban boundaries) means that the market for land is not competitive, or the supply curve is highly inelastic. The argument that households grew by 10,000 and we supplied 10,000, therefore supply could not have been the issue, misses that point entirely. Outside the overly-defensive planning fraternity there is very little support for the supply does not matter proposition - because it is based on dodgy economics. (Would anyone argue that building less would reduce prices?) In the US, the Obama report of 2016 very clearly stated that supply was the crucial factor, explaining in their case the high cost of housing in say San Francisco, etc - cities like our Australian cities and without the easy excuse of negative gearing. See my Chapter 1 in the CEDA report.


Gig economy and worker welfare - February 2018

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

6

I started off agreeing but then thought about [it]. The factor which might be expected to put downward pressure on wages is the competition it will generate. However, to the extent that this and other new technology increases productivity, that will ultimately feed through into higher real wages, including for workers in this sector. As with the impact of all technology, the notion that government intervention is required must be highly problematic. On what basis is this technology different? Do we advocate against making markets competitive?


CGT deductions - March 2017

Poll 16

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

 

Disagree

7

Not clear whether this question relates to investors or owner-occupiers or both but I assume the latter. It is obviously true that if the cost of capital is raised for buyers it will dampen demand. But housing has and always will be cyclical, the key being that it is a leveraged investment by both investors and owner-occupiers, and we observe this volatility across countries with a range of different tax treatments. There is an inflation tax component to capital gains and if we look at the equity market experience since 1999, the effective tax rate has been high. Tax changes need to be made with all asset markets in mind not just the housing market and not just the short term. The origins of the current boom (in Canada, UK, NZ, coastal markets in the US, and Australia) are interest rates which now appeared to have passed their low, so the probability is that tax changes will hit a market on the way down.The other point is that, beyond the short term, the real issue with housing is and remain supply constraints. I might just mention that Hilber (2016) estimated that regulatory controls add 35% to the cost of housing in the UK - rough estimates suggest that the impact is also very significant for Australian cities. That too may economists appear to support the populist view that tweaking the tax system is the answer rather than fundamental reform on the supply side is disappointing.


2016 US Election - November 2016

Poll 13

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

 

Agree

3

In terms of temperament, Hilary Clinton is clearly the better candidate. But she is also divisive and will have a very weak mandate. In terms of policies, not clear exactly what Hilary Clinton will do. Will she also close down the TPP free trade agreement which would be good for Australia (and also good for the US). Beyond all the rhetoric and heat, how much will actually change in the US? I suspect not much.


Immigration - November 2016

Poll 12

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

 

Agree

6

While the economy should benefit, it is contingent on policy. In the case of cities, the increase in population means higher rents and prices. But this can be moderated by adequate investment in transport infrastructure and less restrictive policies on supply.


China services boom for Australia? - April 2016

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

5

Whereas Australia's comparative advantage in resources is fairly clear, it is not so evident that Australia has a comparative advantage in services. That is there will be a lot more competition. In finance, doubtful that we have much to offer. In tourism, we will get a share of a big pie as we did with Japan but Europe and other destinations are also close to China. Ironically, in mining services we do have a comparative advantage.


Penalty Rates Reform - November 2015

Poll 2

"Aligning Sunday penalty rates for hospitality, entertainment and retailing industries with the current levels for Saturday, as proposed in the Productivity Commission's draft report, will lead to more employment and greater availability of services in these industries on Sundays."

 

Strongly agree

10