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Author's Name: John Quiggin
Date: Tue 12 Feb 2019

John Quiggin

Professor John Quiggin

John Quiggin is an Australian Laureate Fellow in Economics at the University of Queensland. He is prominent both as a research economist and as a commentator on Australian economic policy. He is a Fellow of the Econometric Society, the Academy of the Social Sciences in Australia and many other learned societies and institutions. He has produced over 1500 publications, including six books and over 200 refereed journal articles, in fields including decision theory, environmental economics, production economics, and the theory of economic growth. He has also written on policy topics including climate change, micro-economic reform, privatisation, employment policy and the management of the Murray-Darling river system. His latest book, Zombie Economics: How Dead Ideas Still Walk Among Us, was released in 2010 by Princeton University Press, and has been translated into eight languages.

Website

https://economics.uq.edu.au/profile/779/professor-john-quiggin

 


Responses (34)


Motherhood, caring and the careers of Australian women - April 2019

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."

 

Part 1 - Agree

7

On average, though not in every case, motherhood adversely affects women's career prospects. This is unlikely to change without improvements in parental leave and childcare. I'm unsure how to interpret the second statement, so I've left it as a don't know.

Part 2 - Uncertain (neither agree nor disagree)

2


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 - Disagree

4

Part 2 - Strongly disagree

8

This competes with the PhD, which is the standard "ticket" for an academic discipline. But a PhD doesn't require any set course nor is there any legal requirement to have one in order to work as an economist. Formal accreditation would have big costs and no benefits.


Motherhood, caring and the careers of Australian women - April 2019

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."

 

Part 1 - Agree

7

On average, though not in every case, motherhood adversely affects women's career prospects. This is unlikely to change without improvements in parental leave and childcare. I'm unsure how to interpret the second statement, so I've left it as a don't know.

Part 2 - Uncertain (neither agree nor disagree)

2


Royal Banking Commission (II) - February 2019

Poll 35

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

 

Disagree

6

None of the options that have been proposed so far are likely to do much good. What is needed is a reversal of the massive expansion of the financial sector that began in the 1970s. In the banking context, this would entail a "narrow banking" model in which retail banking was separated from trading and investment banking and regulated as a public utility, along with the recreation of a publicly owned "no frills" bank, along the lines of Kiwibank in New Zealand. These proposals may be beyond the realm of political feasibility, which is why I have expressed only modest confidence in my view.


Congestion pricing - November 2018

 

Strongly agree

10

The answer is a no-brainer. The interesting point is why congestion prices (particularly for CBD access) have met so much resistance when most people would rarely if ever pay them. In my view, the answer is that most people in the political and business elite work in the CBD and mix with others who do, thereby getting a misleading sense of public feeling.


Banking Royal Commission and the Credit Crunch - October 2018

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 - Disagree

1 - It would be better to say "probability" rather than "risk" since the latter implies a positive answer to Prop 2.

2 - Debt/income ratios are dangerously high, and reducing them would be beneficial.


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 - There are plenty of superior options such as promotion of sport/exercise for young people. Looking specifically at sweetened beverages, it would more equitable to subsidise sugar-free versions than to tax the sugary ones

2 -


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."

 

Strongly disagree

8

The explanatory statement is wrong. Since revenue is fungible, it is incorrect to state that "fuel tax (excise) which goes towards funding Australian roads". In economic terms, the fuel excise is a mixture of (a) a road user charge which should incorporate a return to capital(b) a tax on externalities imposed by motor vehicles of all kinds (crashes, congestion and so on). (c) a tax on local and global externalities from burning petrol. Of these, (c) is appropriately applied to petrol-driven cars only


Australian Federal Budget 2018 - Reduce government debt or provide tax cuts? - April 2018

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 - Agree

2 - Strongly agree

1 - More precisely, the priority should be to stabilise net worth. With low long-term interest rates, debt-financed public investment is good. A surplus on an accrual basis would be desirable, though this is not a top priority.

2 - We need an increase in the revenue/GDP ratio. Cutting taxes is a step in the wrong direction.


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."

 

Uncertain (neither agree nor disagree)

7

The bigger problem is that, to a first approximation, an increase in foreign investment in Australia, will have zero effect on net national income. The increase in GDP will either be offset by depreciation or will be paid out as returns to the foreign investors.


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."

 

Strongly agree

8

The link to digital technology is misleading. The "gig" economy is a recreation of conditions of precarious and contingent employment that always arise when employers have enhanced bargaining power (eg the Hungry Mile on the Sydney waterfront in the 1930s). The disruptive effect of digital innovations acts as a catalyst, breaking down existing arrangements. The inequality of bargaining power ensures that the new conditions are less secure.


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 - Agree

B - Agree

The crucial factor is " Holding labour market institutions  fixed".  Currently labour market institutions are designed to drive down wages and conditions, and weaken the bargaining power of workers.  Any technological change, even if it is neutral or labour-complementary is most likely to be implemented in a way that reflects this design. The use of the Internet to drive the "gig economy" is an example. The gains of technology could be distributed more fairly but, with current institutions, they will probably not be.


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

10

Proposition is self-explanatory


The Finkel Review - August 2017

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."

 

Uncertain (neither agree nor disagree)

6

All of these schemes are roughly equivalent.  The LET has the limitation that it is specific to electricity, but it is a price based policy.  The only thing that matters is finding a proposal that the current government is willing to accept. The Finkel proposal seemed like the most promising option in this respect, but it was rejected by the climate science denialists who dominate the government, just like everything else. Nevertheless, it may play a role in the future, as a basis for consensus after the current government is replaced.


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."

 

Strongly agree

10

The VET FEE-HELP disaster, which even for-profit advocates admit, is not an aberration but part of a consistent pattern, replicated in the US and elsewhere. Theory predicts, and experience shows, that for-profit providers will benefit more from gaming the system than from efficient service provision.


Gender diversity in the workplace - role of government? - June 2017

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

7

The clearest evidence on this, for me, was the introduction of equal pay in the 1970s, which greatly reduced gender pay gaps, much more so than less interventionist approaches in the US. But that was some time ago and social attitudes have changed, so more recent evidence would increase my confidence.


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."

 

Disagree

5

More consistency if fiscal policies are based on Treasury projections, even if these turn out to be wrong.


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."

 

Agree

3

Energy policy in Australia is a mess. Prices don't reflect economic or climatic costs. Availability of some low-cost gas would obviously improve the situation here, in particular allowing an adjustment away from coal. I don't know whether the opportunity cost of forgoing overseas sales is accurately reflected by the export price.


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 agree

10

The subsidisation of owner occupied housing is one of the biggest distortions in Australian public policy, and leads to severe contradictions. Policymakers want both to increase the affordability of home ownership and to maintain high and rising house prices. Clearly, they can't do both.


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."

 

Strongly disagree

8

My argument is spelt out here http://crookedtimber.org/2013/10/25/the-macro-foundations-of-microeconomics/  My only doubt is that I am less sure about teaching strategy than about the logical relationship


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

7

Trump would be immensely damaging to US economy and society. The flow-on effects to Australia would mostly be negative. However, it's hard to predict the economic outcomes given the difficulty of knowing what Trump will do and the complexity of general equilibrium effects.


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 agree

10

For most forms of gambling (lotteries are the main exception), more than 50 per cent of revenue is derived from a small proportion of the population, consisting of current and potential problem gamblers. The damage suffered by this group and their families, employers and others exceeds the benefits generated by the share of revenue (less than 50 per cent) derived from recreational gambling.


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

8

We have discovered many ways in which actual behaviour differs from standard model of optimisation


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

There are a wide range of possible 'nudges'. Some seem obviously justified to me, such as setting the default option in choices of various kinds to be the one most likely to be beneficial to the chooser. On the other hand, making it difficult for people to implement their preferred choice is problematic.

PART 2 - Disagree

7

There are a wide range of possible 'nudges'. Some seem obviously justified to me, such as setting the default option in choices of various kinds to be the one most likely to be beneficial to the chooser. On the other hand, making it difficult for people to implement their preferred choice is problematic.


RBA economic growth targets - August 2016

Poll 10

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

 

Agree

8

Globally, the inflation target system adopted almost universally in the 1990s, in combination with strong versions of central bank independence and exclusive reliance on monetary policy has been a failure nearly everywhere. Australia has done better than most, but has below-target inflation and interest rates approaching the zero lower bound. Adoption of a nominal growth target would imply a need to employ fiscal as well as monetary policy, and for a return to the pre-1990s approach to co-ordination of fiscal and monetary policy


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."

 

Strongly disagree

8

A loss of income in the medium term is virtually inevitable, because of adjustment costs. The financial sector will contract, which is desirable in the long run but can cause plenty of short term problems. Whether the adjustment cost is large or small depends on how this process is managed.


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."

 

Strongly agree

9

Another way to state the point is that social and private returns to education are  higher than marginal returns to business investment. There is ample empirical evidence to support this statement.


Budget 2016-17 - Returning to surplus - May 2016

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

7

A headline deficit of two per cent of GDP is consistent with a stable debt/GDP ratio around 30 per cent and is therefore roughly neutral, which is appropriate in an economy which is still growing but shows signs of weakness.


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."

 

Strongly agree

7

We can expect continued growth in services exports to China and Asia in general. The impact on GDP may be less than for the mining boom, but the benefit actually flowing to Australians in general (which was very limited in the mining boom) may be greater.


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."

 

Disagree

8

As with some previous questions, the question is poorly posed in a way that does not explicitly include all the relevant opportunity costs. A region will experience net benefits if governments subsidise economic activity of any kind, including sporting benefits, and the cost is borne by taxpayers outside the region. To answer the correctly posed form of the question, the total costs of government subsidies to sporting events will normally exceed the total benefits.


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."

 

No opinion

5

I don't feel a numerical ranking is appropriate, but I offer this comment: The obvious problem with this claim is that exchanging cash is inefficient, especially when combined with the generally accepted norm that equals should give presents of equal value. Anyone who accepts the stated proposition should be in favour of cancelling Xmas and relying on the existing intra-family tax-transfer system.


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 disagree

10

My rating reflects the fact that this question is ill-posed, and should not be used as a basis for policy analysis.Very probably, reducing wages *on Sundays* will increase employment and service provision *on Sundays*. But this will be wholly or largely offset by reductions in employment and service provision on other days of the week. The question excludes this effect from consideration.The exclusion of this substitution effect, a standard prediction of intermediate micro,  earns this question a Fail grade in my view.