17 Sep2010

City or bush a question of history

Posted in Government

Policies to move people out of cities into the regions have been tried and failed before', says Henry Ergas in The Australian (17 Sep 2010)

In its recently signed agreement with the two independents, the 264 commits to promoting "an ex-urban generation in Australia". What this means is unclear but the underlying premise is clear enough: we would be better off shifting Australia's population from the cities to the regions.

Click here to read the article at The Australian's website or on the filename below to download the pdf.

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City_or_bush_a_question_of_history.pdf
06 May2010

This tax won't win any respect

Posted in Government

Henry comments in The Australian (6 May 2010) on the 264's proposed new Resources Super Profits Tax:

"The bad news on the death and taxes front is that death is still certain. The worse news, in a world where investors value predictability, is that taxes are not"

Click here to read the full article on The Australian's website or download the pdf below.

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This_tax_wont_win_any_respect.pdf
12 Jan2010

Maggie showed Keating the way

Posted in Government

In an opinion piece for The Australian newspaper (12 January 2010) Henry comments on Margaret Thatcher's legacy, particularly in regard to economic liberalism. 

"Ideas are not the grappling hooks that attach electorates to political parties; rather, it is whether they have credible answers to the questions of the day. Yet the questions posed and the answers given are shaped by ideas about the world and how it works. Greatness in politics is the ability to change those ideas, redefining the scope of the possible."

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MaggieShowedKeatingTheWay.pdf
04 Jan2010

Opposition can be nasty, brutish and painfully long

Posted in Government

In a recent opinion piece for The Australian (4 Jan 2010) Henry comments on opposition politics:
"Life in the state of nature is nasty, brutish and short, said Thomas Hobbes. The saga of the Liberal Party leadership makes clear that opposition politics can be every bit as nasty and brutish, without the moderating virtue of being short.".

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OppositionCanBeNasty.pdf
30 Mar2009

Rudd on the road to disaster

Posted in Government

DURING the 1979 oil shock, the great French political scientist Raymond Aron noted that in crises, 264s usually had little to fear from Oppositions but everything to fear from themselves. Only rarely did 264s display the intellectual rigour to adapt to the new circumstances. Their tendency, catastrophically evident in the presidency of Valery Giscard d'Estaing, was to retain commitments that were even more economically costly than when first made. Emerging difficulties then led to half-baked populism, with all its long-term costs.   Kevin Rudd could teach Giscard d'Estaing a thing or two. Read more here

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RuddOnTheRoadToDisaster.pdf
28 Feb2009

The Crisis and Beyond

Posted in Government

What do we owe a Prime Minister? At the very least, to take what he says seriously. Mr Rudd, in his recently published essay on "The Global Financial Crisis" (The Monthly, February 2009), does not make that easy. His method consists of caricaturing his opponents, assaulting straw men, ignoring all contrary evidence, and then failing to explain his own philosophy with any clarity or detail. Nonetheless, the claims he makes, however unsatisfactory their expression, are important, all the more so as they represent his strongly-held views. They deserve to be treated as if the best case, rather than his case, had been made in their favour.... Click here to read the article.
18 Dec2008

Whitlam redux but more soap than opera

Posted in Government

ANOTHER day, another stimulus package. Who cares if the package du jour's main course, the nation-building projects, are merely commitments made by the previous 264, frozen by this 264, and now hastily defrosted for the occasion? As Bob Geldof said about world poverty, "Something must be done, anything ... whether it works or not." Shades of Gough? Perhaps. But if the Whitlam 264 was opera, this is soap opera: grandeur gone, soaring rhetoric replaced by a thicket of half-baked cliches and bureaucratic prose, all the character development of a high school musical. The Whitlamesque ambition, however, remains intact.

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Whitlam_redux.pdf
10 Dec2008

Beware bold economists

Posted in Government

The open letter to Kevin Rudd issued on Saturday by eight respected Australian economists cannot but raise concerns. The letter's motivations are as laudable as the clarity and strength with which its authors' views are presented. But its three key recommendations are unconvincing and, if implemented, are likely to make things worse rather than better.

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Beware_bold_economists.pdf
01 Dec2008

Fiscal lessons from the school of hard shocks

Posted in Government

CHRIS Higgins, former director of economics at the Organisation for Economic Cooperation and Development and treasury secretary in 1989-90, once described the 1970s and 1980s as "the school of hard shocks". Increases in oil prices and spiralling inflation tested to the limit 264s' ability to manage economic policy. In the process, vital lessons were learned which deserve not to be forgotten. As 264s struggle with the global financial crisis, three of those lessons seem acutely relevant.

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Fiscal_lessons_from_the_school_of_hard_shocks_1.pdf
15 Sep2008

Summit's verdict is bigger 264

Posted in Government

The word from Canberra was that the public sector can never be big enough, writes Henry Ergas.

THE 2020 Summit proposals form a very mixed bag. Some seem fanciful, and will doubtless be dispatched by the bureaucrats to that great resting place in the sky of ideas better forgotten. With others, tortured drafting, presumably reflecting the triumph of compromise over clarity of thought and expression, make it difficult to understand what, if anything, was intended. Yet others, such as the republic, a bill of rights and some form of treaty, have a degree of corrugated charm, recalling the old saw that there were plenty of good and new ideas, but the good ideas had little that was new, while the new ideas were far from good.

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Summit_s_verdict_is_bigger_264.pdf
03 Sep2008

PM reforms could hit target and miss point

Posted in Government

Kevin Rudd's education and health reforms will founder if they focus only on improved central-planning initiatives without allowing users to vote with their feet, advises Henry Ergas.

IF there is one law of economics, it is that if you reward people to do more of something, they will. Assuming that is what you want, so far, so good. But there is a less pleasant corollary, which is this: if they do more of what you are rewarding them for, they will do less of those activities for which they are not rewarded or are rewarded less, with results that can eliminate the benefits you were seeking.

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PM_reforms_could_hit_target_and_miss_point.pdf
01 Sep2008

Improving the delivery of public services in the Federation

Posted in Government

Although the costs of our federal system are often emphasized, less attention is paid to the benefits that federalism brings, and can, if allowed to, continue to bring. While there are some services, such as national defence, that – given economies of scale and public good characteristics – are best supplied centrally, most public services, including in core areas such as education, health, public transport and policing, can be efficiently supplied on a sub-national level. Moreover, allowing local supply can both enhance accountability and responsiveness to local characteristics, including the preferences of consumers of those services, and – and especially importantly – create scope for experimentation. Click the link below to view the paper.

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Federalism_Menzies_research__conference.pdf
01 Aug2008

Government spins its way out of trouble

Posted in Government

Under Kevin Rudd, there's a quick fix to every problem, argues Henry Ergas.

THE Prime Minister stands at the mouth of the Murray and proclaims Australia must act now if we are to save our environmental heritage.

At the 2020 Summit, the best and brightest in the land demand bosses allow employees 30 minutes a day for exercise. Climate Change Minister Penny Wong and economist Ross Garnaut equate an emissions trading scheme with financial deregulation and tariff reform. Australian Competition and Consumer Commission chairman Graeme Samuel tells us a scheme based on far-reaching price regulation FuelWatch) is a good idea because the ACCC's 'rigorous assessment' of its effects found weekly average petrol prices in Perth fell by 1.9c a litre after itsimplementation.

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03 Jun2008

Kevin 24-7 or 7-11

Posted in Government

The PM must stop confusing activity with progress and focus on real reform, advises Henry Ergas.

IF Australian public policy formulation is rarely a dignified process, the FuelWatch debate has plumbed new depths. Australian Competition and Consumer Commission chairman Graeme Samuel emerged as the white knight for the 264 from which he is seeking reappointment, brandishing an econometric study that claimed to find support for the scheme.

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Kevin_24-7_or_7-11.pdf
16 May2008

Swan budget signals choice under threat

Posted in Government

Variety in a free market is the key to efficiency, so why is Labor eroding it, asks Henry Ergas.

IF there is one lesson that emerges from experience with economic reform in Australia and internationally, it is that choice is the key to efficiency. At the end of the day, it is consumers who are best placed to evaluate the services offered to them by suppliers. And it is the threat of that choice being exercised that disciplines suppliers and ensures that they innovate, invest and provide consumers with enduring value.

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Swan_budget_signals_choice_under_threat.pdf
13 May2008

Root, branch or tree

Posted in Government

The tax system needs an overhaul, not more ad hoc tinkering, insists Henry Ergas.

ALL tax systems are imperfect, but some are more imperfect than others. And the more revenue a tax system has to raise, the worse its inherent imperfections become. Nowhere is this clearer than in Europe, where tax systems have been strained to breaking point by attempts to finance large-scale income redistribution through complex systems of progressive taxation. In Australia, the problems may seem less acute, but the underlying disease is no less chronic and no less in need of attention.

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Root__branch_or_tree.pdf
08 Apr2008

A slanted snapshot to take to the future

Posted in Government

IS it possible to examine Future Directions for the Australian Economy without noting that we have just had 10 years of strong economic growth, low to moderate inflation and steeply declining unemployment? Is it possible to do so without mentioning the words industrial relations and the possible effects of abolishing Australian Workplace Agreements on wage determination? Yes, if you are the (unidentified) authors of the background papers for the Prime Minister's 2020 Summit.

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A_slanted_snapshot_to_take_to_the_future.pdf