John Quiggin

Poll 66

Top economists say Trump’s policies will hit Australian economic growth and push up inflation and interest rates in the US.

Makes AUKUS a worse deal than before

The end of US democracy will have more profound implications than changes in economic policy, though it is hard to say what these changes will be.

Poll 65

Panellists are unanimous in believing Australia’s housing market is in crisis.

Offered a choice of 14 measures identified by the Economic Society of Australia as likely to restrain prices for buyers and renters, none of the 49 leading economists polled picked: “do nothing, the market will determine appropriate prices”.

We need to move away from reliance on individual landlords to provide rental housing. That means expanding public housing, other social housing and commercial build-to-rent. We should also place a negative weight on any "job creating" project that diverts skilled workers from the home building sector. Stadiums and the AUKUS submarine program are examples.

Rental Affordability

Replace stamp duty with a broadly based land tax that includes the family homes, Ease planning restrictions, Provide more public housing

Poll 63

April Poll - panellists were asked about the GST deal with Western Australia.  The following two questions were posed: 

"Is the long-standing arrangement broadly the best method of distributing the nationally-collected GST revenue?" and "Should the 2018 changes be kept or scrapped?"

YES - The fiscal equalisation principle predates the GST by nearly 100 years

Scrapped

Giving ad hoc carve-outs to individual states is a bad policy process.

Poll 62

Panellists were asked "Which of the options set out below best describes the kind of approach the Australian government should take to the US Inflation Reduction Act? (Pick 1)"

The payoff to clean-energy innovation has increased, In the absence of a carbon price, (almost( any assistance to clean energy is desirable

Provide access to credit for firms in industries that will supply the US projects, such as nickel an

This is an application of second-best principles. A political point is that the government is almost certain to do something to promote manufacturing and this is the best choice on offer (much better than AUKUS, for example).

Poll 61

Worried economists call for a carbon price, a tax on coal exports, and ‘green tariffs’ to get Australia on the path to net zero

Introduce an economy-wide cap and trade carbon price | Phase out non-electric vehicles | Expedite building new transmission lines to connect renewable energy

Cap and trade carbon price is still the best policy, even though Labor and Coalition are opposed. Transmission facilities and the phase-out of internal combustion engines in vehicles are crucial and need policy intervention. Batteries are important but should happen without government intervention. The safeguard mechanism is a lame duck, and nuclear isn't going to happen before 2050.

Poll 60

Australia’s leading economists believe Australia can sustain an unemployment rate as low as 3.75% – much lower than the latest Reserve Bank estimate of 4.25% and the Treasury’s latest estimate of 4.5%.

improving the quality of employment services, improving the quality of primary and secondary education, running the economy "hot" for a period (i.e. through low interest rates) in order to give more potential workers some work experience, increase their employability in the long term

3.5

Full employment should be measured by conditions in the labour market. The appropriate measure is that the number of job vacancies should be equal to the number of unemployed workers, so that all unemployment is either frictional or mismatch. This is approximately the current situation. NAIRU model amounts to little more than "whatever the Reserve Bank is happy with". In particular, since inflation is currently decelerating, the model would imply that we are above NAIRU. The fact that no-one suggests this reflects the inadequacy of the model.

Poll 59

Our panellists were asked the following 2023 budget question: "On May 9, the government delivered a budget designed, in the Treasurer's words, to strike a balance between relief, repair and restraint'.  What grade would you give the budget, given that objective: A, B, C, D, E or F?"

Wes Mountain/The Conversation, CC BY-ND - https://creativecommons.org/licenses/by-nd/4.0/

Overall rating: E - Keeping inflationary pressures in check: F

E

OVERALL COMMENTS: I've given an E, but I don't accept the premise of the question. The stated objective is a meaningless word salad. I am ranking the budget on whether it promotes full employment and a more equal distribution of income, the objectives I would expect from a Labor government. On those criteria, it's very poor. Only the fact that the government was shamed into increasing Jobkeeper at the last minute puts it above F. INFLATION COMMENTS: I've given an F because I reject the premise of the question. This is a misconceived framing of our economic situation. We have achieved full employment for the first time in 50 years, and the government is throwing it away in pursuit of an arbitrary inflation target. Although the claimed theory is that inflation reduces real wages, the aftual strategy involves further downward pressure on money wages, leaving workers worse off than if we allowed wages to rise to offset past inflation.

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

.

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

.

Reduce regulated rates of return on transmission and distribution

See this analysis from the Institute for Energy Economics and Financial Analysis: https://ieefa.org/resources/no-justification-10-billion-monopoly-power-bill-shock More generally private equity returns are way too high.

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

.

Full Employment, the original proposed topic of the Summit. The government should restate the commitment to full employment given in the 1945 White Paper, and consider measures from the list above in the light of that commitment. That would include pro-employment fiscal policy, more human services jobs (health and education generally, not just care) and a Green New Deal along the lines proposed in the US in 2021.

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

No need, inflation will fall back to an acceptable level without the need for any government action to back up the RBA

4%

Some short run inflation is inevitable as a consequence of expansionary measures taken to prevent a crash during the lockdown. This is not a justification for cutting real wages. The inflation targeting regime has failed, and should be replaced by a nominal income target. Regardless, inflation rate around 4% is needed to avoid future episodes of zero interest rates

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

.

Overall, the most depressing and dispiriting election campaign I have seen in 50+ years of paying attention. No significant policy offerings from either major part, so we are left with pork barrel bribes and character attacks, which feed into worst kind of media coverage. Climate change and poverty/inequality are the most important issues, but neither party is offering anything substantive. Albanese talks a good game on wages, but apart from aged care, is offering only long run industry policy. Neither party offering progressive tax policy or improvements in welfare. Labor marginally better on climate. Missing from the list is the big picture on fiscal policy: how to manage tax, spending and debt in a world of permanently low, mostly negative real interest rates

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"

.

190,000 is not enough

Doesn?t make much difference in economic terms. But as pandemic has shown restricting movement imposes big costs on people. Justified to save lives, not because we?re worried about traffic congestion or baselessly about jobs.

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"

Uncertain

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"

Disagree

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"

.

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"

Disagree

8

The inflation targeting framework is misconceived. Australia should switch to a nominal GDP growth target of 6-7 per cent. That allow for interest rates to be well above zero in nominal terms but negative in real terms, consistent with the fact that the long-term neutral real interest rate is now near zero.

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"

Government support to develop and roll out emissions-reducing technologies

Agree

1. Australia will benefit greatly if the world reaches net zero by 2050 with cumulative emissions sufficient to keep warming well below 2 degrees. We could attempt to free ride on the efforts of other countries by doing little to reduce emissions. However, we would almost certainly face a range of costs from being perceived as climate cheaters 2. As to the best measure, this is difficult. I would favor direct action in the literal sense of action by government to invest in renewable electricity generation, expand the grid and so on. However, Direct Action in Australian policy parlance means the ineffectual subsidy policies introduced under the Abbott governmet Negative emissions tech will probably be necessary in the end, but they aren't a relevant option today A carbon price is the best option, and one we actually had in place, but it's too late now for a purely price-based approach, even assuming there was any political possibility On this basis, I favor government support to develop and roll out emissions-reducing technologies

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"

Vaccine passports for higher-risk settings (eg. flights, restaurants, major events);Cash incentives for vaccination;Lotteries with cash or prizes for the vaccinated;Mandatory vaccination for higher risk occupations

Not enough. We need Green Pass as in Europe and mandatory vaccination or weekly testing for everyone who works with other people. Given uselessness of current advertising campaign I haven't checked this option.

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"

.

Reforming industrial relations to boost the bargaining power of trade unions

I've only listed one policy, since it's the only one that matters. Nearly every reform of IR since 1975 has acted to reduce the bargaining power of unions and push wages down. All should be reviewed with a presumption in favour of repeal.

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"

Remove the luxury car tax from all-electric cars, Subsidise public charging points for electric cars, Set a date to ban the import of petrol and diesel cars

10

An end date of 2035 would provide a firm basis for planning, and would support global moves by vehicle manufacturers to cease production of petrol and diesel vehicles. As regards vehicle taxes, the term "luxury" refers only to price. Since electric vehicles have higher cpaital costs, some would be subject to the tax despite not having the characteristics associated with the term luxury (I leave aside the question of whether luxury car taxes are appropriate). Public expenditure should be directed towards supporting infrastructure rather than subsidising vehicle purchases. I would support making charging points compulsory in carparks, but not in homes.

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

.

C

As with last year's budget, the aggregate settings were basically correct, but the detail of policy is poor. Most importantly, the absence of any serious response to climate change can't be sustained and will require a radical policy shift in the near future, once we are pushed into a 2050 net zero commitment.

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 

C

The government was correct to budget for a large deficit, and deserves continuing credit for Jobseeker and Jobkeeper. But the priorities reflected in the budget were those of cutting taxes for high income earners, pushing large scale infrastructure and pursuing cultural/ideological vendettas against perceived enemies like renewable energy and the university sector. The budget fails to address the need for strong action on climate, revealed by the bushfire catastrophe, and a range of unmet needs, such as social housing shown up by pandemic. Except for Jobseeker and Jobkeeper, it looks much as it would have done if the fires and pandemic had never happened.

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."

Be indexed in line with wages

We should restore and maintain parity with the age pension. That entails an increase of just under $150 per week and indexation by wages.

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 

Permanently boosting JobSeeker (Newstart) beyond December 31, 2020, Social housing, Incentives for renewable energy, Funding higher quality aged care

1. Focus on employment intensive measures which also address unmet needs highlighted by the pandemic. 2. My support for renewable energy reflects the fact that this is a negative cost item. In the absence of a carbon price, we are effectively taxing renewables.

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 deferred

3

Superannuation is still a mess. We need to wind back tax concessions and get a coherent income support policy for all age groups before going any further down this path.

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

8

In the special conditions of the pandemic, the primary purpose of government spending is not to boost aggregate demand, but to provide income support to workers and businesses who are suddenly unable to work as they normally would. But the case for taking on debt to do this is overwhelming, particularly since interest rates are likely to remain at or near zero for many years to come

Poll 39

"A freeze in the minimum wage will support Australia's economic recovery"

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

Strongly disagree

9

There has been extensive debate on the effects of minimum wages on labor demand. Over the last 25 years, the general conclusion has been that these effects are relatively small. However, these questions are irrelevant in the current context. The pace of economic recovery will be determined entirely by macroeconomic conditions, including fiscal and monetary policy, continued success in suppressing the pandemic, developments overseas and consumer confidence. In this context, an increase in minimum wages will have a modest positive effect in bolstering demand. In the longer term, the costs of the pandemic will have to be shared across the community. The crisis has shown that the work of lower-paid people is vital and undervalued, while much (not all) highly recompensed activity turns out to be of marginal importance in a crisis. Those on higher incomes should bear all or most of the cost of recovery.

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

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 -

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.

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."

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.

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.

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.

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

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.

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.

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.

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.

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

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.

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.

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.

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.

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

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.

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.

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.

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.

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

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.

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

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.

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.

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.

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.

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.

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.

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.