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Author's Name: Craig Emerson
Date: Wed 06 May 2020

Craig Emerson

Dr Craig Emerson

Dr Craig Emerson is an eminent economist with 35 years’ experience in public policy, politics and public service. He is Managing Director of Craig Emerson Economics Pty Ltd, providing professional services to governments and the business community. He is a Distinguished Fellow at The Australian National University, Director of the APEC Study Centre at RMIT, Adjunct Professor at Victoria University, Chair of the McKell Institute and a columnist with The Australian Financial Review.

Dr Emerson was Australia’s Minister for Trade and Competitiveness from 2010 to 2013. Prior to that he was Minister for Small Business and Minister for Competition Policy and Consumer Affairs. He was the architect of the 2012 White Paper on Australia in the Asian Century and was appointed Minister Assisting the Prime Minister on Asian Century Policy. He is also a former Minister for Tertiary Education, Skills, Science and Research and Chair of the Productivity Committee of Cabinet.

Dr Emerson was economic, trade and environmental adviser to Prime Minister Bob Hawke in the 1980s. He has also held the positions of Assistant Secretary in the Department of the Prime Minister and Cabinet, Director-General of the Queensland Department of Environment and Heritage and Policy Analyst at the United Nations in Bangkok.
Dr Emerson has a PhD in Economics from the Australian National University, and a Master of Economics degree and a Bachelor of Economics (Honours) degree from the University of Sydney.

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Website

Company website: http://www.craigemersoneconomics.com


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Responses (7)


Top economists want JobSeeker boosted by $100+ per week and tied to wages

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."

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

 

Be indexed in line with wages

The JobSeeker rate includes an allowance for job search costs such as clothing, grooming and travel to employer locations for interviews. When the true unemployment rate is the highest in living memory the job search component should be commensurately higher. On equity grounds, unemployed Australians meeting the activity test are no less in need and no less worthy than age pensioners. The Jobseeker rate should be the same as the age pension rate and should be indexed at the same rate.


October Budget 2020 - preferred four programs

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 

 

Expanded investment allowance, Permanently boosting JobSeeker (Newstart) beyond December 31, 2020, More funding for education and training, Increasing subsidies for child care

The job-search component of the old Newstart will need boosting to facilitate what will be a far more difficult process of seeking work, with so many jobseekers chasing so few jobs. Reform of the Child Care Subsidy is essential to reducing the punishing workforce disincentive rates of 75-120 per cent confronting working mothers who want to help repair household budgets. Australia's universities are being smashed by the restrictions on the entry of international students, with the UK and Canada enjoying a big advantage by flying in students, decimating Australia's third-biggest export industry. An expanded investment allowance that could later be converted to a cash flow tax would greatly increase investment incentives at a time when productivity-raising investment will otherwise be deeply depressed.


Does the budget rebuild our economy and create jobs?

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

Aggregate fiscal support is strong but uncertainty about the future of JobKeeper and Jobseeker is economically and socially damaging. Government and RBA insistence on repayment of every dollar of the debt is damaging to expectations of a successful recovery. The budget turned down an opportunity to reform the Child Care Subsidy to boost both productivity and workforce participation. Not much forward signalling of productivity-raising reform, making achievement of even trend GDP growth of 2.75% on a sustainable basis unlikely. Much stronger growth than that would be needed to pay down the debt if it is all to be repaid as the Government is insisting.


The legislated increases in compulsory super contributions should...

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 

 

Proceed as planned

10

A Superannuation Guarantee rate frozen at 9.5 per cent would provide a retirement income that is considered inadequate by the burgeoning retiree population. With its strong voting power, the retiree population would successfully demand increased pension levels from the Commonwealth. This would require increased taxation as a percentage of GDP, which would have to be funded by increased personal tax on working-age Australians or a large increase in the GST rate towards the 20-25 per cent of European economies. With population ageing we are heading towards just 2.7 working-age Australians earnings the incomes and paying the taxes to support each retiree, down from 7.3 in the mid-1970s. Freezing the contributions rate at 9.5 per cent is a policy for an expanded welfare state.


Government Debt during the COVID19 Crisis

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

10

Interest rates on public debt are at record lows and in a deflationary world are expected to remain low indefinitely.


Wage freeze for economic recovery

Poll 39

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

Photo credit: Wes Mountain/The ConversationCC BY-ND 

 

Strongly disagree

8

A fundamental weakness in the Australian economy before the COVID-19 crisis was weak wages growth and the decoupling of labour productivity growth and wages growth. This has adversely affected consumption, which comprises 57 per cent of gross domestic product. When the pandemic is over, workers will have even weaker bargaining power. Without a statutory increase in wages, there will be little or no wages growth going forward, guaranteeing that any recovery will be feeble. The federal government's industrial relations roundtables with unions and business organisations might improve the enterprise bargaining system, but in the absence of a statutory increase in the minimum wage the prospects of cooperation between unions and employer organisations will be severely compromised.


Social Distancing Measures, May 2020

Poll 38

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

 

Disagree

6

The economic challenge during the COVID-19 pandemic is to maintain as much as practicable the links between employees and their employing businesses and between those businesses and the economy. The longer the restrictions are in place the greater will be the likelihood of those links being broken - leading to severe economic hardship, business failures, mortgage defaults, domestic violence, mental health problems, suicide and long-term unemployment, particularly for the young. In this deepest recession since the Great Depression, the worst affected are young people and especially young women. Keeping R at less than 1 as an absolutely binding constraint could lead to all these hardships. It nevertheless should be a key, non-binding, guiding principle but not a rule.