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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
Introduce inheritance taxes
Tax windfall profits
Introduce inheritance taxes
Tax windfall profits
In addition, to introducing inheritance taxes I favour introducing a carbon tax.
This would improve the incentives to reduce carbon pollution.
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
Reserve domestic gas equivalent to 15% of LNG production from each LNG export project (ie making the
While I think the Government must reserve sufficient gas for the Australian market, I would also favour a price cap for that gas.
Both measures are needed, and neither is sufficient on their own.
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
Education and skills
Education and skills
The measures for education and skills are obvious ? we just need more.
In industrial relations the most useful changes would be to improve the security of casual workers jobs and prevent wage theft, and there needs to be an increase in the pay in education and caring industries.
Macroeconomic policy is generally on the right track, but the demands for services, including in education and training and care services, will not be met without an increase in taxation revenue as a share of GDP.
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.
Reserve a portion of gas and other commodities for domestic use
Increase income taxes with revenue used to reduce cost of services
With the economy back at full capacity we should be operating with a smaller budget deficit than is planned. That would take some pressure off interest rates in the future.
Savings on the expenditure side are most unlikely to make much difference, and we therefore need to increase tax revenue to ensure the supply of essential government services.
Nevertheless, I expect inflation to fall back as the temporary factors limiting supply are eased.
In the meantime reducing some of the pressure points such as energy prices would help.
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".
Climate and environment and employment/wages growth are the two most important issues to tackle.
Spending more on social support, health, defence, and education will all be required, but that will depend upon tax reform with the aim of raising more revenue efficiently.
"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 about right
I think the composition of the migrant intake is at least as important as the aggregate number.
I am assuming that the proportion of skilled migrants will not change much. But i would like to see more refugees for humanitarian reasons.
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.
"Following the next Federal election, the incoming Federal Government should commission an independent Review of the Reserve Bank of Australia."
"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'."
"When do you expect the Reserve Bank of Australia to next lift its cash rate?"
"The current combination of Australian fiscal and monetary policy poses a serious risk of prolonged above-target inflation."
A simple "yes-no" answer to question 3 about RBA performance does not make sense.
On balance, the RBA did more of a good job than a bad job, but it consistently over-estimated wage and price inflation, implying that unemployment was higher than necessary, and this probably impacted investment and productivity.
No-one can know whether a Review of the RBA is a good idea without seeing the terms of reference.
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"
An economy-wide carbon price (either via a cap-and-trade scheme or an emissions tax)
Using the price mechanism will always ensure a more efficient allocation of resources than the government attempting to second-guess the market.
If the market on its own has unacceptable social impacts then these can be offset by increased government support to help people make the transition to a low-carbon world.
"What measures should Australian governments adopt to promote demand for vaccination once supply is no longer a constraint?"
Mandatory vaccination for higher risk occupations;Vaccine passports for higher-risk settings (eg. flights, restaurants, major events);National advertising campaigns
While I favour both mandatory vaccination and vaccine passports (in due course) these measures will not be appropriate while there is a shortage of vaccination slots.
I also think it is too early to decide on whether or not, incentives are needed.
They may be appropriate later on if it proves difficult to encourage sufficient numbers to come forward for vaccination.
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".
Maintaining high government spending in order to boost aggregate demand;Cutting taxes in order to bo
Boosting aggregate demand will help increase wage growth, but I think there are also structural reasons why wage growth is less than in the past.
In particular, the impact of technology hollowing out of middle-level jobs has weakened the power of trade unions, and also wage expectations have now fallen.
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"
Make charging points compulsory in new homes and new carparks
I think electric cars will be competitive with petrol and diesel cars, so I don't see any further subsidy as being necessary or appropriate.
However, I would favour the government moving to change its own car fleet over to electric cars as soon as possible.
"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
This budget deserves a B+ for securing the economic recovery, but only an E- for building for the future, resulting in an overall D rating.
This budget does not address the causes of Australia's economic stagnation prior to the pandemic.
Negligible real wage growth is forecast to continue, and the forecast increase in productivity to 1.5% in 2022-23 and beyond is an heroic assumption.
Restoring past rates of economic growth will not be possible without addressing the structural problems in the labour market.
This will involve much more investment in education, training and research. But the universities are experiencing a major funding cut, and the extra money in this budget for apprentices and trainees only makes up for past cuts.