David Byrne

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”.

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Home affordability

Replace stamp duty with a broadly based land tax that includes the family homes, Tighten the negative gearing and capital gains tax concessions, Ease planning restrictions

Poll 64

Panelists were asked to comment on two questions: 

Is the budget likely to achieve its aim of getting inflation back within the RBA target band by the end of this year and back to 2.75% by mid next year?

And

On May 14, the government delivered a budget designed, in the Treasurer's words, to "focus on fighting inflation in the near term and then growth in the medium term " - 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/

NO The untargeted $300 subsidy is a fiscal stimulus that only increases aggregate demand and pushes up inflation overall. In this sense, the budget is confused about the economics and what we are trying to do in getting inflation under control. The short-run reduction in the consumer price index (via electricity in the consumption basket) will eventually show up later with a rise in the same part of the index when the subsidy is removed.

D

The government has provided fiscal stimulus during inflation through an untargeted electricity bill subsidy. The government is also taking steps to stem one of our most important drivers of productivity ? skilled migrants ? which, in the medium to long term, will hinder economic growth prospects. So, I'm not sure how this budget is meant to fight inflation and promote economic growth.

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)"

To ensure Australia can be part of newly-developing US-linked supply chains | The payoff to clean-energy innovation has increased | To support homegrown emerging green technologies

Provide more grants to innovative firms across the entire economy

A well-designed grants/incentive scheme will hinge on firms being able to prove value-for-money, and that would incorporate industries that may have a potential boom as we advance with the US Inflation Reduction Act. In effect, a grants scheme should support those industries if they deliver the best value for money, but possibly other industries if they provide the same or better value. A well-designed scheme (I'll emphasise) has built-in flexibility to incorporate many potential future technologies and demands, which is important given the inherent uncertainty along the green energy transition. "Picking winners" based on today's information risks rent-seeking and lacks flexibility.

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

Expedite investment in large battery storage | Expedite building new transmission lines to connect renewable energy | Expand the safeguard mechanism to cover more facilities to mimic a broader carbon price

Australia's future competitive advantage will be in low-cost renewable energy investments. To push on this frontier, we need the ability to transmit and store our power at scale for domestic and possibly international use. This points to grid-scale battery storage and transmission network investments. To move to net zero, we also need price incentives. Unfortunately, we have a political climate where a cap and trade carbon price (with redistribution of the tax revenue to households) is not likely not feasible, so expanding our existing incentive schemes (such as the safeguard mechanism) represents a more feasible and immediate path on incentives.

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%.

creating more incentives for business R&D, improving the quality of primary and secondary education, reducing taxes and regulations facing businesses

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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: D - Keeping inflationary pressures in check: F

D

INFLATION COMMENTS: Any claim made by the government that fiscal spending will be non-inflationary is nonsensical and ignores a century worth of economic research.

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

Efficiency picks: Tax windfall profits Increase the GST Wind back Jobseeker or pension payments Equity picks: Wind back franking credits Introduce inheritance taxes Wind back deductions for negatively geared properties