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Author's Name: Hugh Sibly
Date: Tue 12 Feb 2019

Hugh Sibly

Dr Hugh Sibly

Hugh Sibly is a senior lecturer in the Tasmanian School of Business and Economics at the University of Tasmania, where he has worked since 1992. He has taught in the areas of industrial organisation, game theory, microeconomics and macroeconomics. He received his PhD from the University of Melbourne.

Hugh’s research interest is in price determination, particularly in the areas of experimental/behaviour economics, urban water markets, macroeconomics and industrial organisation. He has published papers in refereed academic journals and presented papers to academic conferences in all these areas. He has made numerous presentations to a variety of audiences on the use of pricing and competition as a mechanism to solve recurrent Australian water crises, including one to the ACCC Ninth Regulatory Conference in July 2008.

Hugh has also worked as an Assistant Commissioner for the Tasmanian Government Prices Oversight Commission and been a member of the Copyright Tribunal of Australia.

Subject Area Expertise

Experimental/behaviour economics, urban water markets, and industrial organisation

Website

http://www.utas.edu.au/business-and-economics/people/profiles/economics/Hugh-Sibly

 


Responses (22)


Waste Policy - August 2018

Poll 32

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

 

Uncertain (neither agree nor disagree)

9

It is difficult to form a definitive view on the basis of evidence I am aware of. Recycling and waste minimisation clearly have some benefits. However many of these process have hidden or 'opportunity' costs. For example, reducing food 'waste' often involves a significant amount of unpaid labour (and possibly other costs). It could be that the opportunity costs of this labour outweighs any benefit provided by the salvaged food.


Sugar sweetened beverage tax for Australia - July 2018

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 - Uncertain (neither agree nor disagree)

1 - The question assumes government should be involved in people's private dietary choices. This assumption itself requires some justification, which might be imperfect health insurance markets (premiums cannot be made contingent on a person's dietary choices) or that people do not suffer the full cost of their poor dietary choices (unavoidable costs fall on family and health services). In this case a broad sugar tax is likely to be efficient. But a narrower tax on SSBs will be less efficient than a broad tax on sugar.

2 - If a tax is imposed on SSBs people may possibly substitute to less healthy alternatives.


Electric vehicles and road-use pricing - June 2018

Poll 30

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

 

Agree

8

The proposition specifically refers to road use pricing. The efficient price for road use is equal the additional cost of road degradation caused by the road use plus congestion cost imposed by that road use. So the efficient charge for road use does not differ between equivalent fossil-fuel and electric cars. Of course this type of pricing is not used in Australia. The fuel excise tax is not a good approximation to an efficient road use charge, so applying some sort of equivalent tax to the small number of electric cars is unlikely to yield any significant efficiency gains. More importantly, the fuel excise tax has a role in pollution reduction. For this reason it is an efficiency increasing tax on fossil-fuel using machinery, and it is not efficient to apply an equivalent charge to electric vehicles (though it would be efficient to tax any pollution from electricity generators).


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

This proposition, as stated, will necessarily be true. Of course the important caveat is 'everything being equal'. What happens to the actual price of housing over time will depend not only on changes to the number of dwellings, but to the quality/character of those dwellings, as well as changes to demand conditions. For instance it is also certainly true that reducing demand for housing (for example by reducing tax concessions) would also lower house prices. The relative strength of these various effects could well differ across geographic areas.


US corporate tax cuts - March 2018

Poll 27

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

 

Disagree

8


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."

 

Uncertain (neither agree nor disagree)

8

It may be the case that at the moment some people working as subcontractors for these new types of firms will have inferior conditions to those who work in traditional jobs which are covered by traditional awards and conditions. However some of these new forms of employment do offer incredible flexibility. For instance, Uber drivers drive only at those times they choose. Over time there will be new entrants, hence increased competition, in these new digital industries. This will mean increased demand for labour. It will be very easy for workers to switch between platforms (as some drivers now switch between driving for Uber and Taxis). This will place an upward pressure on wages in these industries. It will also be relatively easy to identify good workers, who may end up receiving a wage premium for their performance.


Journalism as a public good - January 2018

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 - Agree

1 -

2 - It is extremely important that clear and accurate information regarding policy is provided to the public in a democracy. An unfortunate side effect of the rise of the internet and social media is that 'news' has become more about entertainment and less about information. Some government support could offset this drift. Of course the devil is in the detail. Exactly how does one ensure that government supported journalism is independent, accurate and enjoys public support? That is a difficult balancing act.  


Robots, artificial intelligence and the 'future of work' - October 2017

Poll 23

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

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

 

A - Disagree

B - Agree

History suggests that new technology does not increase unemployment after a period of adjustment. New technology would be expected to raise productivity and thereby raise national income. In principle it would therefore be possible for winners to compensate losers. Whether this happens will depend in part on policy. It might be expected that appropriate education and training policies could assist with the adjustment process and thereby reduce some of the negative impacts of the technological change.


Public borrowing for infrastructure investment - September 2017

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"

 

Strongly agree

9

Australia seems prone to under-investment in Infrastructure. This is plainly evident in the case of transport infrastructure in the major capitals. Possibly the fear of incurring debt is deterring governments from undertaking this investment. One way of offsetting these concerns would be for the community to start accepting the benefits of user-payments to cover some or all of the costs of the infrastructure. For example, road congestion charges would create a stream of revenue, and additionally lead to a more efficient road network.


Australian Federal Budget 2017 - Outsourcing Economic Forecasting - May 2017

Poll 18

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

 

Agree

6

Political debates around the validity of particular economic forecasts are, for the most part, unproductive. This debate is fuelled by claims that Treasury forecasts are distorted by the political requirements of the government. The proposed move should help de-politicise the development and discussion of economic forecasts. Hopefully, then, public debate could be more usefully directed at the trade-offs the government (and thus the country) faces when framing budgets, in particular raising revenue and directing spending.


Energy shortages - reserving Australian gas - April 2017

Poll 17

"In response to energy shortages around Australia, government policies requiring gas producers to reserve some production for domestic consumption are a good way to ensure that Australian consumers have access to sufficient gas supplies while still allowing for gas exports."

 

Disagree

7


Economics teaching - micro before macro - February 2017

Poll 15

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

 

Agree

9

All economics is built on the key foundations of microeconomics, i.e opportunity cost, individual choice, issues of competition etc. So that it is important that those studying macro have exposure to a micro course. Ideally micro would come first, so students can fully understand the underpinnings of macro analysis while they are learning it.


Social costs of gambling - December 2016

Poll 14

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

 

Strongly disagree

8

The question as posed appears  ambiguous  to me. I have interpreted it as saying that the social cost of gambling in Australia necessarily outweighs the benefit. The implication being then that gambling should be prohibited. Currently in Australia there is certainly a significant social cost arising from problem gambling. For instance, there is a great deal of concern remains about the social cost of the over use of pokies and the inappropriate promotion of gambling on broadcast sports events. Such problems certainly lower the social benefit from gambling, and are best controlled through regulation as indicated in the Productivity Commission's 2010 report.


Part 1: 'Behavioural economics provides new and useful insights into individual behaviour.' Part 2: 'It is unethical for governments to use behavioural economics to

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

 

Strongly agree

10

More precisely, experimental  economics has provided sound evidence that people behave in ways modelled by behavioural economics. For instance, extensive and consistent evidence from lab experiments using the dictator and ultimatum games suggest that care about the social dimension of their economic decisions.


Behavioural economics - September 2016

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

To be classed as a "nudge", a policy must not alter the set of choices open to people. So it could be argued that the responsibility for a given choice,  and its ethical consequences, remain with the individual. To the extent that a nudge changes behaviour in a way that in beyond conscious control (for example placing good/bad food at eye level in shops) or provides some forms of information (for example  setting defaults on superannuation contributions), presumably it is the ethical standard of the  policy rather than the use of a nudge which  determines whether it is  ethical. Indeed, in the examples just cited, any action taken could be classified as a nudge, so 'nudging in these contexts' is unavoidable.

PART 2 - Strongly disagree

9

To be classed as a "nudge", a policy must not alter the set of choices open to people. So it could be argued that the responsibility for a given choice,  and its ethical consequences, remain with the individual. To the extent that a nudge changes behaviour in a way that in beyond conscious control (for example placing good/bad food at eye level in shops) or provides some forms of information (for example  setting defaults on superannuation contributions), presumably it is the ethical standard of the  policy rather than the use of a nudge which  determines whether it is  ethical. Indeed, in the examples just cited, any action taken could be classified as a nudge, so 'nudging in these contexts' is unavoidable.


RBA economic growth targets - August 2016

Poll 10

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

 

Strongly disagree

8

Inflation targeting has been a successful policy in controlling inflation. It only works if the central bank adheres to the policy and, in particular, does not deviate from it when 'convenient'. While inflation is not currently an issue, it is unlikely expansionary monetary policy would dramatically increase the real growth rate. Overseas experience suggests it would not in the current conditions. Abandoning inflation targeting would thus reduce the future ability to control inflation when macro conditions change, without yielding any substantial current benefits.


The Brexit - impact on UK citizens - July 2016

Poll 9

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

 

Disagree

7

One might expect Brexit to give the UK more policy flexibility, which could be  beneficial to the UK economy. Reduced access to EU market is likely be detrimental to the UK economy. It is hard to predict the overall impact of these two countervailing effects. However it seems unlikely that Brexit will deliver large benefits in the next 5 years. Furthermore, if Brexit increases political uncertainty (for example around new moves for Scottish independence), this could be an additional source of damage the UK economy.


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."

 

Disagree

5


Efficiency of tax Government investments in major sporting events - February/March 2016

Poll 5

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

 

Strongly disagree

7

The claimed benefit of hosting major sporting events are increased tourism and improved infrastructure. It is difficult to believe the money spent on hosting major sporting events would be more effective than spending directly on tourism marketing and normal infrastructure expansion. Indeed infrastructure developed for the sporting event may not be well suited to the daily needs of the city/region. Further, recent cost-benefit analyses have indicated major sporting events have a negative social benefit.


Efficiency of tax incentives - February 2016

Poll 4

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

 

Uncertain (neither agree nor disagree)

8


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

9

The PC is almost certainly correct on the impact of the change. Of course it is a separate question whether the change is desirable.