National Economic Panel



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Author's Name: Adrian Blundell-Wignall
Date: Mon 24 May 2021

Adrian Blundell-Wignall

Dr Adrian Blundell-Wignall, Adjunct Professor

Adrian is Adjunct Professor at the University of Sydney (School of Economics), and the former Director of Financial and Enterprise Affairs at the OECD (a directorate that supports governments in five policy areas: anti-briberycompetitioncorporate affairsinternational investment, financial marketsinsurance and private pensions.). He has been the Special Advisor to the OECD Secretary-General on Financial Markets in Paris, and serves on the OECD Pension Board from 2009-present. He has been the Head of Asset Allocation at BT Funds Management (now Pendal Asset Management).

Adrian is the founder and chairman of a charitable foundation (The Anika Foundation) that raises and invests an endowment fund to provide scholarships for research into adolescent depression and suicide prevention.

Adrian is an Australian citizen. He has a 1st class Honours degree and PhD in Economics from Cambridge University, UK.

He is the author of extensive publications in the areas of financial markets, globalisation and policy in learned journals and books. See article links in Most recently he has published the book, Globalisation and Finance at the Crossroads

Responses (4)

Promoting vaccination uptake in Australia

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);Mandatory vaccination for higher risk occupations

In France, where i spend much of my time, it is clear that the Passe Sanitaire (a certificate with information about the bearer?s COVID vaccination status) has had by far the biggest effect in stimulating uptake of the vaccine, along with mandatory vaccination for occupations the require facing the public. It is discouraging that we don't seem to be able to take these decision quickly and without debate. As a child at school in the 50s, if you turned up at school on the day the polio or smallpox caravan was there you were lined up and injected or took you lump of sugar with the vaccine. There was no debate, thank heaven. The more we flip flop and vacillate on this, the greater the chance of new variants and more sickness. We need better leadership on this.

Policies to deliver higher wage growth

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"



Measures to boost productivity growth Maintaining high government spending in order to boost aggrega

These choices should be thought about in the context of an economic plan for the longer term. Reforming the education system and corporate governance to get rid of the elitism that entrenches inequality should be a part of that plan. That the best predictor of how well you do at school is how rich your parents are and where they went to school is a national tragedy. It is redistribution of opportunity, income and wealth that is the key issue. `The 'entitlement' and club economy that comes with all this permeates politicians, business leaders, and who gets the best jobs after completing school.

Transition to electric cars

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"




None of the above are suitable. Set a binding price on carbon in general, tax Co2 emissions, and impose more strict Co2 emission limits on petrol and diesel cars. The market should drive the substitution towards electric cars based on prices. Subsidies and quantitative import restrictions and bans should be avoided.

The Federal Budget May 2021

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




I give the budget a creditable B because, while there were some very good aspects, I can?t help but feel the government erred by not buying vaccines on time to the (unnecessary) due to the cost top the budget in the years ahead. I also felt the effective interest rate assumptions are at the optimistic end. The very good things in the budget are those relating to a longer-run plan for growth? a healthy population with infrastructure investment needed to diversify away from dependence on mining. Full marks for aged care, infrastructure, mental health, preschool for all and women?s security. Supporting the digital economy and some of the changes to super, also rate a positive mention. On the vaccines, most of the cost is for 2021-2022. The vaccines should have been contracted for around March-2020 (as some countries did) with perhaps half the population vaccinated by now (as in Israel and the UK and US not far behind). We are only now beginning to vaccinate. There is enormous leverage to getting the vaccine timing right. It would have helped to get the economy back to work and the borders opened sooner which, in turn, would have saved unemployment benefits, tourism, aviation support and the need for the extension of temporary measures. We can?t point to how good we look versus other economies in GDP. We are a hard-to-get-to island unlike Europe and the Americas. There will be hidden cliff effects when support drops off or is withdrawn. For example, small business bankruptcies are at record lows versus where they would be in a normal year. And it has not been a normal year. My B also relates to the sanguine view on real interest rates. Even if inflation stays at 2.5% in the middle of the range for the next 5 years, real interest rates will likely rise. The budget assumes the effective interest rate on the public debt will drift lower (as legacy higher-interest-rate bonds mature). With the likely levelling-off in the global saving glut real rates will be subject to upward pressure. Higher US inflation will likely pressure the Fed to raise short rates and reverse QE over the next 5 years. Higher inflation results from interruptions to global supply chains: the bottling up of fiscal-driven demand and the unprecedented increased in the money supply. It is the first time in decades that central bank money is directly funding government spending and putting money into people?s pockets (as opposed to the interbank market). If US rates rise, rate pressures will transmit to Australia as it always does. It is unwise to place too much weight on interest rates remaining very low in real terms. If real rates rise above trend growth of say 2.5%, the primary deficit would then need to be cut for debt to stabilise.