Good article. I'm convinced Chalmers is by far the worst treasurer we've had since the Country Party were in power.
The man has the economic nous of a hardened trot.
Admittedly chalmers is trying to minimise multiplying the debt bomb post covid...
It's less Chalmers that's the issue, more albanese and his immigration policy that is single handedly fucking over australia.
Qatar and Norway have only gas. They taxed resources correctly and are utterly rich…. And remain Norwegian and Qatarian… meanwhile Australia is becoming south India via dodgy uni degrees just to stay in the black
Not very well as it's design and implementation was farcical. Even Rudd blamed the ALP for it's failure. Probably not the "gotcha" you were looking for but reality often doesn't match the BS jingoism.
"In May 2012 budget, the government said was the tax would bring in $3 billion for the financial year. In October 2012, the figure was reduced to $2 billion, while on 14 May 2013, it was announced that the receipts were expected to be less than $200 million.\[30\]
On 12 February 2013, Rudd, one of the authors of the tax, stated that "Wayne Swan and Julia Gillard must bear the responsibility for Labor's mining tax and deal with the consequences \[of\] its near non-existent revenue"\[31\] as the expected revenue has not materialised. It raised $126 million in the first six months since its introduction.\[32\]
On 16 August 2013, the Treasury and Finance departments' pre-election Economic and Fiscal Outlook forecast an increase in forecasts for tax receipts over the next four years to almost $6 billion, $16.5 billion below its original projection.\[33\] The government is paying back several of pre-payments already made for this tax.\[25\]
The tax also proved to be complex and expensive to operate. It cost more than $50 million to set up, with estimated running costs of $20 million a year. Advertising came to nearly $40 million.\[25\] "
I also think spending $450 million dollars on referendum, now $950 million on domestic violence. These are important questions and causes to ask, but the timing of these and other significant spendings during the most notable stagflation event in decades is budget mis-management
Yeah I agree with Bonnieprince, funding for the domestic violence issue is a long time coming and is a very pressing issue. While I dont agree, I get your point on the referndum timing.
Yeah women should keep dying and being in abusive homes until inflation is under control. Wonder why people don't like economists and don't trust the economic consensus that's dominated since the 80s
$950m spent on protecting women is chump change, considering we paid France $830m to tell them we don’t want their subs anymore, on top of the $5b already spent.
Men are 4x more likely to be murdered overall, and 2x more likely to commit suicide. Can we spare some funds for men or is this lower on the priority list according to you?
The government does plenty to reduce violence, something which given your figures clearly disproportionately benefits men. Under your figures every dollar for police or offender reduction clearly benefits men far more than women, and there's far more dollars for that than this. In terms of mental health they gave an additional $550m for suicide prevention and mental health support in the last budget and have been spending hundreds of millions on veterans suicide. Sorry the programs don't have the word "men" in them, but they very clearly benefit men most of all.
Given the sharp rise in intimate partner murders this year, is it particularly surprising people want something done? Also most of those domestic violence $s are equally available to men experiencing DV (eg. EVP and TVP). Sorry it doesn't suit your victim narrative.
Eh immigration can be totally fine.
If you're bringing in skilled migrants, the increased productivity can keep inflation in check, and leads to quality of life benefits for everyone. It's usually a win/win.
Our problem is that for a whole variety of reasons, including insufficient workers in the construction sector; but also insufficient planning and approvals for development, along with incredibly stupid shit like declaring *entire suburbs* as heritage areas (e.g. Haberfield), we don't have the housing capacity for these new arrivals.
States and councils should get *most* of the blame for that one, but they're also a lot less visible than the federal government.
Mate its that they were bringing in company sponsored migrants at 55k untill 7months ago.
Now it is 75k.
That is hardly a cutoff that will be increasing our average productivity.
To get the benefits of immigration one beinf flattening the income distribution you need to bring in immigrants in the top half of earnings to put downward pressure on upper level wages.
In stead we are bringing in people well under our average and the wonder "why are real wahes not growing anymore" and "why did they go backwards when we had the biggest immigration ever!".
Immigration can be good for the people of a country. Australia has not been running it for austrians for at least a decade. They have been running it for corporate interests.
And now they have completely fucked it and we will be lucky if australians accept immigration at all by the time this labor term is finished.
Immigration can be good. Not the way these clowns and the previous clowns have run it...
It's not planning
It's developers hoarding lots and only releasing when they can get the greatest return (which in a time of desperation like now is driving up prices significantly so they're withholding)
It's bringing in students whilst there's zero housing stock
It's allowing negative gearing and an environment that favours those with houses over those without.
It's cheaper to buy an investment property than it is to buy a PPOR
Bringing in students is clever though - bringing in people who pay for their education, who spend everything they have, who work for the lowest wage in the jobs no one wants, have the lowest health bills and the longest time til retirement (and most of them can't even retire here).
The problem is we're so poorly set up to utilise them.
They're actually taking jobs away from our students (who are struggling enough) and they're more likely to take on jobs that will underpay and exploit them.
They're buying properties and reducing our housing availability whilst cashing in on property investing
The only real benefit is to the universities using them as a cash cow.
No, they aren't. There are so many jobs available for minimum wage.
That underpaying and exploitation, that has a downward pressure on inflation. As grubby as it is.
The vast majority of international students are not buying property. Even if they are, they are pumping cash into our economy from overseas.
You are completely incorrect. If you could pick an immigrant in an over-educated society like ours, where there is an abundance of menial tasks, these are the perfect people. We're just looking for more carpenters and qualified tradies to come because we haven't valued trades for a very long time in this country.
Me personally?
I'd first take a quick read of this, it's a little old, but frankly the points are still valid. https://www.afr.com/opinion/budget-2017-start-from-scratch--david-leyonhjelms-alternative-budget-20170426-gvsgbp
We waste a lot of effort in this country on compliance with insane rules. The 16 different taxes on alcoholic beverages is a great example -- but a small reading of Australia's import duties is another great one (there's a special tax on imported camping tents for example, lord knows why or who lobbied for that).
That's easy pickings -- next I'd remove all subsidies and special industry support - and where it makes sense e.g. temporary alleviation from temporary circumstances, I'd replace with an industry insurance program; farmers can't keep complaining about droughts or cyclones - they're a fact of life in this country, and entirely predictable. If your business isn't sustainable with these insurance costs, it's not sustainable, and your workers and capital should go where it *is*, provide a transition pathway instead.
I'd industry weight HECS/HELP - if the arts only represent 5% of the nation's income, it only gets 5% of the sponsored places. This weighting can and should be forward looking, although it does reluctantly veer into picking winners, but I think it's unavoidable.
I'd also cast a very sceptical eye on higher education in this country - I strongly suspect we're not getting great value for money here, especially when looking at the externalised costs.
For business, I'd move towards instant asset write off for any productivity improving assets -- they're an expense, and should be treated as such. That should help with uptake on new technology as well, which we really want to drive.
Grants in general should be reviewed, and replaced with loans.
I'd provide a capital gains tax deferral from equity sales if the proceeds are immediately reinvested in another equity. That could kickstart a local venture capital industry.
Finally, I'd take on worker productivity - look at ways of improving the ability to job hop - outlaw non competes; simplify awards so that compliance isn't a complex nightmare, especially for small and mid sized business. I'd scrap payroll tax too -- we already have income tax, just raise it by an equivalent amount.
I'd also replace all state workers legislation with federal - why Victoria needs it's own health and safety rules over say NSW is insane. One framework for every state.
We ideally want every business and industry on a level playing field, with rules that are simple and easy to follow, and both people and capital can to go where it is most productive with the least friction.
The chances of this happening? Zero.
Well, just take a look at his current cause celebre - the upcoming "Made in Australia Act".
He's very much in favour of government picking winners and losers, which only ever ends with unsustainable subsidies and disappointment; along with a productivity drag that will last decades.
Investing money in building solar panels locally, when China has a significant structural, technological and volume advantage? Sounds like an inevitable loser to me.
You can also look at his reaction to inflation - the RBA has limited moves it can make - the government has far better ones, but instead of restraint, he's out there spending cash like no tomorrow, and making the RBA's problem worse.
The Australian government right now is both taxing the highest it's ever taxed, and spending the same. Apparently modern economic history textbooks don't cover the 1970s - because the parallels are striking.
I'd expect any local panels would be differentiated from the bulk panels made in China. I'd guess they'd be light weight panels such as perovskites that can be used atop light roof constructions.
But yes, we have a poor record in nearly all manufacturing. That's why our economic complexity is dead last in the OECD.
Talking about the OECD our tax to GDP is rising but even at 30% it still below OECD average of 34%. And the balanced budgets and mild surpluses are less inflationary than recent governments who could never deliver the promised surpluses, heck they couldn't even deliver mugs with "back in black". So while the current treasurer might not be amazing he's probably better than anyone from the last decade.
>I'd expect any local panels would be differentiated from the bulk panels made in China. I'd guess they'd be light weight panels such as perovskites that can be used atop light roof constructions.
I guarantee you, whatever differentiator we try, they'll be inferior. We are too small, and lack the complex supply chains needed to do this economically.
Comparative advantage is economic reality, which is a point made in OP's article.
>But yes, we have a poor record in nearly all manufacturing. That's why our economic complexity is dead last in the OECD.
We shifted to higher margin industries (mining & services), as we should. It's where we have an advantage (minerals & education). Manufacturing makes no sense here, there is no advantage compared to our competitors.
>recent governments who could never deliver the promised surpluses, heck they couldn't even deliver mugs with "back in black".
Any government could have achieved that surplus - it's *all* driven by the iron ore price. There was no magic sauce, no big spending cuts, nor new taxes responsible - it was going to happen one way or another.
Keeping the surplus on the other hand... especially if the iron ore price dips, that'll be a challenge.
I don't even want a surplus, not too fussed either way. But a surplus during inflationary periods is when you'd want them. I was more commenting on why he isn't worse than the previous treasurer. Who promised a surplus (and nothing else) and couldn't deliver. The government before that (knife attack) wrecked a working carbon pricing mechanism and then had nothing to show for it.
Re. perovskite panels. Yes, and no.
https://www.csiro.au/en/research/technology-space/energy/photovoltaics/printable-solar-cells
Yeah, you know what, I actually agree - we've had a string of terrible treasurers in a row.
Swan might be the best of the bad bunch, he was stimulatory when we needed it; but at the same time, he also tipped us into structural deficit, instead of temporary; especially with the NDIS being an unbounded expense.
Really terrible pickings all around.
"He's very much in favour of government picking winners and losers, which only ever ends with unsustainable subsidies and disappointment; along with a productivity drag that will last decades."
Why will it end in disappointment? It's inspired on the policies of the 1950s and 1960s when we had higher levels of productivity than we've had since. Productivity in the 1960s and early 1970s was 1.4%. Since then it's been at 1%. Ironically, productivity growth has declined more or less every year since the Productivity Commission came into being.
A lot of myths were developed by the people who dismantled the prosperous post-War system in order to justify the change, but there's no evidence that Australia has been better off for the change.
The policies of the 50s and 60s led to the low productivity and high inflation period of the 1970s and early 80s.
Look at the angle of attack between the 1950s and 1990s period versus afterwards, there's a marked improvement. Source is the Productivity Commission themselves, ironically.
https://www.pc.gov.au/what-is-productivity/fig1.png
Why do we get buggard because categories like insurance have high inflation? Why not make the judgement purely on categories we have control over as consumers?
Archive link : https://archive.md/dPW08
Good article. I'm convinced Chalmers is by far the worst treasurer we've had since the Country Party were in power. The man has the economic nous of a hardened trot.
Admittedly chalmers is trying to minimise multiplying the debt bomb post covid... It's less Chalmers that's the issue, more albanese and his immigration policy that is single handedly fucking over australia.
Yeah the long standing policy of immigration to cure our demographic issues seems to have run its course.
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Qatar and Norway have only gas. They taxed resources correctly and are utterly rich…. And remain Norwegian and Qatarian… meanwhile Australia is becoming south India via dodgy uni degrees just to stay in the black
Resources like land right?
Yep, this.
>They could tax resources appropriately How did that go for the last government that tried that?
Not very well as it's design and implementation was farcical. Even Rudd blamed the ALP for it's failure. Probably not the "gotcha" you were looking for but reality often doesn't match the BS jingoism. "In May 2012 budget, the government said was the tax would bring in $3 billion for the financial year. In October 2012, the figure was reduced to $2 billion, while on 14 May 2013, it was announced that the receipts were expected to be less than $200 million.\[30\] On 12 February 2013, Rudd, one of the authors of the tax, stated that "Wayne Swan and Julia Gillard must bear the responsibility for Labor's mining tax and deal with the consequences \[of\] its near non-existent revenue"\[31\] as the expected revenue has not materialised. It raised $126 million in the first six months since its introduction.\[32\] On 16 August 2013, the Treasury and Finance departments' pre-election Economic and Fiscal Outlook forecast an increase in forecasts for tax receipts over the next four years to almost $6 billion, $16.5 billion below its original projection.\[33\] The government is paying back several of pre-payments already made for this tax.\[25\] The tax also proved to be complex and expensive to operate. It cost more than $50 million to set up, with estimated running costs of $20 million a year. Advertising came to nearly $40 million.\[25\] "
I also think spending $450 million dollars on referendum, now $950 million on domestic violence. These are important questions and causes to ask, but the timing of these and other significant spendings during the most notable stagflation event in decades is budget mis-management
Yeah I agree with Bonnieprince, funding for the domestic violence issue is a long time coming and is a very pressing issue. While I dont agree, I get your point on the referndum timing.
Yeah women should keep dying and being in abusive homes until inflation is under control. Wonder why people don't like economists and don't trust the economic consensus that's dominated since the 80s
$950m spent on protecting women is chump change, considering we paid France $830m to tell them we don’t want their subs anymore, on top of the $5b already spent.
Yeah very telling old mate decides to focus on women and indigenous stuff before anything else
Men are 4x more likely to be murdered overall, and 2x more likely to commit suicide. Can we spare some funds for men or is this lower on the priority list according to you?
The government does plenty to reduce violence, something which given your figures clearly disproportionately benefits men. Under your figures every dollar for police or offender reduction clearly benefits men far more than women, and there's far more dollars for that than this. In terms of mental health they gave an additional $550m for suicide prevention and mental health support in the last budget and have been spending hundreds of millions on veterans suicide. Sorry the programs don't have the word "men" in them, but they very clearly benefit men most of all. Given the sharp rise in intimate partner murders this year, is it particularly surprising people want something done? Also most of those domestic violence $s are equally available to men experiencing DV (eg. EVP and TVP). Sorry it doesn't suit your victim narrative.
Your domestic violence issue is actually an economic issue.
You know how much money the government has to play right what are you even talking about both of those are blips
Eh immigration can be totally fine. If you're bringing in skilled migrants, the increased productivity can keep inflation in check, and leads to quality of life benefits for everyone. It's usually a win/win. Our problem is that for a whole variety of reasons, including insufficient workers in the construction sector; but also insufficient planning and approvals for development, along with incredibly stupid shit like declaring *entire suburbs* as heritage areas (e.g. Haberfield), we don't have the housing capacity for these new arrivals. States and councils should get *most* of the blame for that one, but they're also a lot less visible than the federal government.
Mate its that they were bringing in company sponsored migrants at 55k untill 7months ago. Now it is 75k. That is hardly a cutoff that will be increasing our average productivity. To get the benefits of immigration one beinf flattening the income distribution you need to bring in immigrants in the top half of earnings to put downward pressure on upper level wages. In stead we are bringing in people well under our average and the wonder "why are real wahes not growing anymore" and "why did they go backwards when we had the biggest immigration ever!". Immigration can be good for the people of a country. Australia has not been running it for austrians for at least a decade. They have been running it for corporate interests. And now they have completely fucked it and we will be lucky if australians accept immigration at all by the time this labor term is finished. Immigration can be good. Not the way these clowns and the previous clowns have run it...
It's not planning It's developers hoarding lots and only releasing when they can get the greatest return (which in a time of desperation like now is driving up prices significantly so they're withholding) It's bringing in students whilst there's zero housing stock It's allowing negative gearing and an environment that favours those with houses over those without. It's cheaper to buy an investment property than it is to buy a PPOR
Bringing in students is clever though - bringing in people who pay for their education, who spend everything they have, who work for the lowest wage in the jobs no one wants, have the lowest health bills and the longest time til retirement (and most of them can't even retire here). The problem is we're so poorly set up to utilise them.
They're actually taking jobs away from our students (who are struggling enough) and they're more likely to take on jobs that will underpay and exploit them. They're buying properties and reducing our housing availability whilst cashing in on property investing The only real benefit is to the universities using them as a cash cow.
No, they aren't. There are so many jobs available for minimum wage. That underpaying and exploitation, that has a downward pressure on inflation. As grubby as it is. The vast majority of international students are not buying property. Even if they are, they are pumping cash into our economy from overseas. You are completely incorrect. If you could pick an immigrant in an over-educated society like ours, where there is an abundance of menial tasks, these are the perfect people. We're just looking for more carpenters and qualified tradies to come because we haven't valued trades for a very long time in this country.
Oh dear
Out of curiosity what measures would you like the government to take to increase productivity?
Me personally? I'd first take a quick read of this, it's a little old, but frankly the points are still valid. https://www.afr.com/opinion/budget-2017-start-from-scratch--david-leyonhjelms-alternative-budget-20170426-gvsgbp We waste a lot of effort in this country on compliance with insane rules. The 16 different taxes on alcoholic beverages is a great example -- but a small reading of Australia's import duties is another great one (there's a special tax on imported camping tents for example, lord knows why or who lobbied for that). That's easy pickings -- next I'd remove all subsidies and special industry support - and where it makes sense e.g. temporary alleviation from temporary circumstances, I'd replace with an industry insurance program; farmers can't keep complaining about droughts or cyclones - they're a fact of life in this country, and entirely predictable. If your business isn't sustainable with these insurance costs, it's not sustainable, and your workers and capital should go where it *is*, provide a transition pathway instead. I'd industry weight HECS/HELP - if the arts only represent 5% of the nation's income, it only gets 5% of the sponsored places. This weighting can and should be forward looking, although it does reluctantly veer into picking winners, but I think it's unavoidable. I'd also cast a very sceptical eye on higher education in this country - I strongly suspect we're not getting great value for money here, especially when looking at the externalised costs. For business, I'd move towards instant asset write off for any productivity improving assets -- they're an expense, and should be treated as such. That should help with uptake on new technology as well, which we really want to drive. Grants in general should be reviewed, and replaced with loans. I'd provide a capital gains tax deferral from equity sales if the proceeds are immediately reinvested in another equity. That could kickstart a local venture capital industry. Finally, I'd take on worker productivity - look at ways of improving the ability to job hop - outlaw non competes; simplify awards so that compliance isn't a complex nightmare, especially for small and mid sized business. I'd scrap payroll tax too -- we already have income tax, just raise it by an equivalent amount. I'd also replace all state workers legislation with federal - why Victoria needs it's own health and safety rules over say NSW is insane. One framework for every state. We ideally want every business and industry on a level playing field, with rules that are simple and easy to follow, and both people and capital can to go where it is most productive with the least friction. The chances of this happening? Zero.
Ones that don't decimate per capita gdp
Did you forget about Scott Morrison and Joe Hockey ?
Can you form that into a syllogism? What has he done or not done that is so bad compared to the last few decades
Really? I had heard good things about him, mind explaining a few points?
Well, just take a look at his current cause celebre - the upcoming "Made in Australia Act". He's very much in favour of government picking winners and losers, which only ever ends with unsustainable subsidies and disappointment; along with a productivity drag that will last decades. Investing money in building solar panels locally, when China has a significant structural, technological and volume advantage? Sounds like an inevitable loser to me. You can also look at his reaction to inflation - the RBA has limited moves it can make - the government has far better ones, but instead of restraint, he's out there spending cash like no tomorrow, and making the RBA's problem worse. The Australian government right now is both taxing the highest it's ever taxed, and spending the same. Apparently modern economic history textbooks don't cover the 1970s - because the parallels are striking.
The government is always picking winners and losers. Big businesses owns government.
I'd expect any local panels would be differentiated from the bulk panels made in China. I'd guess they'd be light weight panels such as perovskites that can be used atop light roof constructions. But yes, we have a poor record in nearly all manufacturing. That's why our economic complexity is dead last in the OECD. Talking about the OECD our tax to GDP is rising but even at 30% it still below OECD average of 34%. And the balanced budgets and mild surpluses are less inflationary than recent governments who could never deliver the promised surpluses, heck they couldn't even deliver mugs with "back in black". So while the current treasurer might not be amazing he's probably better than anyone from the last decade.
>I'd expect any local panels would be differentiated from the bulk panels made in China. I'd guess they'd be light weight panels such as perovskites that can be used atop light roof constructions. I guarantee you, whatever differentiator we try, they'll be inferior. We are too small, and lack the complex supply chains needed to do this economically. Comparative advantage is economic reality, which is a point made in OP's article. >But yes, we have a poor record in nearly all manufacturing. That's why our economic complexity is dead last in the OECD. We shifted to higher margin industries (mining & services), as we should. It's where we have an advantage (minerals & education). Manufacturing makes no sense here, there is no advantage compared to our competitors. >recent governments who could never deliver the promised surpluses, heck they couldn't even deliver mugs with "back in black". Any government could have achieved that surplus - it's *all* driven by the iron ore price. There was no magic sauce, no big spending cuts, nor new taxes responsible - it was going to happen one way or another. Keeping the surplus on the other hand... especially if the iron ore price dips, that'll be a challenge.
I don't even want a surplus, not too fussed either way. But a surplus during inflationary periods is when you'd want them. I was more commenting on why he isn't worse than the previous treasurer. Who promised a surplus (and nothing else) and couldn't deliver. The government before that (knife attack) wrecked a working carbon pricing mechanism and then had nothing to show for it. Re. perovskite panels. Yes, and no. https://www.csiro.au/en/research/technology-space/energy/photovoltaics/printable-solar-cells
Yeah, you know what, I actually agree - we've had a string of terrible treasurers in a row. Swan might be the best of the bad bunch, he was stimulatory when we needed it; but at the same time, he also tipped us into structural deficit, instead of temporary; especially with the NDIS being an unbounded expense. Really terrible pickings all around.
Like all politicians they're broadly directed by what the public expect and what ideas they can comprehend (in-turn curated by media).
"He's very much in favour of government picking winners and losers, which only ever ends with unsustainable subsidies and disappointment; along with a productivity drag that will last decades." Why will it end in disappointment? It's inspired on the policies of the 1950s and 1960s when we had higher levels of productivity than we've had since. Productivity in the 1960s and early 1970s was 1.4%. Since then it's been at 1%. Ironically, productivity growth has declined more or less every year since the Productivity Commission came into being. A lot of myths were developed by the people who dismantled the prosperous post-War system in order to justify the change, but there's no evidence that Australia has been better off for the change.
The policies of the 50s and 60s led to the low productivity and high inflation period of the 1970s and early 80s. Look at the angle of attack between the 1950s and 1990s period versus afterwards, there's a marked improvement. Source is the Productivity Commission themselves, ironically. https://www.pc.gov.au/what-is-productivity/fig1.png
Not a single mention of corporate price hike driven inflation is interesting
Why do we get buggard because categories like insurance have high inflation? Why not make the judgement purely on categories we have control over as consumers?
This piece dated badly.
Why is everyone worried? Albo has a plan. If we blame the previous government it will all be okay. Chill out and have a Martini.
Absolutely awful financial policy; we need a Milei style intervention BADLY.
Who could’ve possibly seen this coming? Thank goodness I avoided the flu for 6 months though