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Author's Name: Douglas McTaggart
Date: Tue 12 Feb 2019

Doug McTaggart

Dr Doug McTaggart

Dr Doug McTaggart is an independent non-executive director sitting on the board of the Suncorp Group, and chairing its Audit Committee.  He is also Chairman of the QIMR Berghofer Institute of Medical Research.

Doug is a member of the Prime Minister’s Expert Advisory Panel on the Reform of the Federation, advises the Northern Territory Government as a member of its Economic Development Advisory Panel, is member of Council of the ANU and is also a council member for the Queensland Division of the AICD.

He recently retired as Chairman of the Queensland Public Service Commission and a member of the Queensland Public Sector Renewal Boar and was a Commissioner on the Queensland Independent Commission of Audit.

In June 2012, Dr McTaggart retired after 14 years as Chief Executive of QIC.  Prior to this appointment, Dr McTaggart held roles including Professor of Economics and Associate Dean at Bond University (1989-1996), and then Under Treasurer, Queensland Department of Treasury (1996-1998).

He was a member of the Council of Australian Governments (COAG) Reform Council (2007-2013) and Councilor on the National Competition Council (NCC) (2000-2013).

Dr McTaggart has held various positions on industry bodies and public interest groups, including Director and Chairman of IFSA (now the Financial Services Council), President of the Economic Society of Australia, Director of CEDA, and member of the Australian Accounting Standards Board (AASB).

He has an Honours (1st Class) degree in economics from the ANU, a Masters and PhD from the University of Chicago, and a DUniv from QUT.

Area of Expertise

Macroeconomics

 


Responses (19)


Professional Accreditation of Economists - March 2019

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 - Uncertain (neither agree nor disagree)

1

Part 2 - Disagree

6

On proposition 1, accreditation might work to improve enrolments, given the extent of credentialisation today. Proposition 2 seems more problematic. Where does economics begin and end for accreditation to work. Certainly not just by having an economics major or degree.


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 - Disagree

1 -

2 - SSBs are just one input into obese outcomes.  Not addressing obesity directly by other means will simply force substitutions.  Ultimately those hurt will be lower socio-economic groups who disproportionately bear the burden of obesity and who will disproportionately bear the cost, to little positive outcome.


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

3

The first part of the statement is possibly true. However, a more accurate statement would be -- existing wages in affected areas will, on average, fall. It is hard to know what kinds of new jobs in affected areas will be created and what those jobs might pay -- possibly more. The second part referring to government intervention is more problematic. What could the government do that would not negatively affect wages generally, perhaps in terms of lost or forsaken productivity growth which would increase wages elsewhere.


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 - Uncertain

B - Agree

Other things constant, technological progress changes the mix of jobs on offer with different skills required. In the absence of retraining opportunities, some workers may enter long-term unemployment.  But other workers might find employment.

We have a long history of technological progress increasing productivity, including labour productivity, leading to rising living standards.  As the skills mix of the workforce changes with technological change, we typically use the tax and transfer system to compensate losers in the process.  This will not change with the current and prospective technological shifts arising from the use of robotics.


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"

 

Disagree

7

Governments should borrow to invest in projects that yield a net economic benefit over the life of the project, subject to liquidity considerations of future repayment streams net of future cash returns.  Economic benefits can include social benefits appropriately valued.  Investment in projects that yield only social returns but not cash returns is constrained by the debt servicing demands in the future.  Current levels of debt similarly will impact on the freedom to invest in non-cash returning projects.  Investments that pay for themselves in an NPV sense should naturally be undertaken, but the question arises as to why the private sector doesn't do these for themselves, subject to appropriate regulation.The question, therefore, is rather simple-minded.


- Comment

18th February 2019

.


Does privatisation of human services hurt outcomes? - July 2017

Poll 20

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

 

Disagree

8

There seems to be a view in some quarters that profit driven incentive structures are bad and government, including NFP, driven incentives, whatever they may be, are good. In my experience, this is simply not the case.It is certainly true, that poorly designed incentive structures around for-profit driven service delivery will lead to poor outcomes. But poor outcomes, in terms of true cost and acceptable quality, often plague government and NFP delivery. The challenge is to appropriately define the service or product to be delivered, and canvas the alternative delivery mechanisms, identifying an appropriate reward structure. I think it is fair to say, this exercise has often been poorly done with respect private sector delivery, but has not been done at all with respect to public service delivery.


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."

 

Uncertain (neither agree nor disagree)

10

Depends on the motivation. If it is to get better quality -- i.e. more accurate forecasts -- it is doubtful that the private sector will consistently do better. If it is to remove hints of political interference, then perhaps it will be worth it.


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."

 

Strongly disagree

8

Capital gains tax deductions were introduced to replace the CPI adjustment to try and ensure only real gains were taxed. If there is a problem with supply or demand in the housing market, it should be addressed directly.


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."

 

Uncertain (neither agree nor disagree)

5


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)."

 

Disagree

8

While we might not like gambling, or other people gambling, given our own morals, those who do gamble generally don't impose costs on other people and get quite a lot of benefit from the activity.Where problem gamblers impose external costs, then it creates quite a problem. There does not seem to be any quantity (quota) or price (tax) instrument that would limit the costs. Trying to ban gambling just doesn't work, and imposes significant other costs. However, my guess is that the costs from these individuals is quite low relative to the benefits others enjoy.


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.

 

Agree

7

Understanding the cognitive and other biases in individual behaviour will lead to a greater understanding of individual behaviour.  Where I have less confidence is in understanding what behavioural economics brings to our understanding of market outcomes.  If biases are understood, it could bring about significant arbitrage opportunities that make markets look unbiased.


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 - Disagree

7

The use of incentive structures to bring about specific outcomes is a common practice. If they are more nuanced because of a deeper behavioural understanding then there will be fewer unintended consequences. However, are we that good?

PART 2 - Disagree

7

The use of incentive structures to bring about specific outcomes is a common practice. If they are more nuanced because of a deeper behavioural understanding then there will be fewer unintended consequences. However, are we that good?


Spend on education or business tax cut - June 2016

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."

 

Disagree

8

I am assuming the question is referring to spending "more" money on education, compared to spending money in terms of foregone revenue from a tax cut. Spending more money on education is a vexed question.  We have spent considerably more on schooling in recent years for worse outcomes.  It is not clear spending more today, without improving how and on what we spend existing money, will improve matters. This is also likely true for tertiary education. In pre-schooling, rationalising the mish-mash of what the Commonwealth and the States spend could deliver vastly improved outcomes. While the benefits of a cut in the company tax rate have been debated, on balance any cut seems likely to deliver some benefits.


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

There are two ways to view China: firstly from the top down, via which there are not enough consumers in China, young enough and wealthy enough to support a sustainable transition to a consumer-led economy. Secondly from the bottom up, where from an Australian company's point of view, the smallish (relatively speaking) Chinese middle class looks like a large market, which compared to Australia it is.Accepting the top down view, China does not make the transition to a consumer-led economy and is totally reliant on foreign consumers (read the US). Hence no opportunity.Accepting the bottom up view is more prospective. However, the domestic goods and services markets in China are among the most competitive and least regulated in the world. Moreover, services are less likely to be imported than are goods. So, aside from high end consumer goods, which Australia does not produce or export, it is unlikely that Australia benefit from selling either goods or services, outside of bulk commodities, to China.


Bah Humbug Australia - December 2015

Poll 3

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

 

Disagree

5

From the perspective of a strict maximisation of the utility of the recipient, giving cash is the solution. However, giving gifts on special occasions is as much about the utility of the gift giver, as it is about that of the recipient. Moreover, the nature of the gift can be seen to be part of a localised institutional framework, or as a signal of a deeper communication, or can embody some other joint meaning. Therefore, the value of the transaction is more than simply the utility gained by the recipient.


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."

 

Agree

7

For many people, weekends are not what they used to be, and are just another part of the week. Given there would be a willing supply of labour, and a demand for it from those entities that currently close due to higher weekend costs, there should be a market outcome that suits many.