In debates about climate change and the mitigation of greenhouse gas emissions, there is a widely-held belief that market mechanisms, like the Labor government’s carbon pricing scheme, will reduce emissions in the cheapest possible way. As a matter of pure theory, this is correct but, in practice, it depends on what is included and excluded

When it comes to future generations it seems that we can never be too generous. But is this generosity coming at the expense of current generations? In Canberra, when it comes to job losses, it seems the answer is ”yes”. Consider the Australian National University’s approach to its finances. The ANU is owned by taxpayers

Last week, the newly installed Prime Minister Kevin Rudd challenged Tony Abbott to a debate about public sector debts and deficits. If it goes ahead, it would likely be a rare respite from the slogans that have haunted Australian public debate for the past few years. But the debate that we should be watching is

Confusion and contradiction have become the norm in our topsy-turvy political landscape, but the recent decisions by the ACT and NSW governments about how to fund infrastructure must take the cake. Here in the ACT, the Labor-Greens government is set to embrace a ”public-private partnership” to build its promised light rail project. The Liberals in

Imagine if health and community sector workers wore high-vis vests; our streets, our shopping centres and even our airports would be full of them. We might even begin to think of them as the engine of job creation. But they don’t wear such things and we don’t think such things and the result is a

Do Tony Abbott and Joe Hockey know how badly conservative governments are managing their economies in Europe? While Australia ”struggles” along with gross domestic product growth of just below three per cent and unemployment rate of 5.7 per cent, economic activity in the eurozone declined by 0.2 per cent in the first three months of

A lot of the debate in Australia reflects concern about our future and how budgetary pressures are likely to evolve. The backdrop of the discussion is a profile of the predicted population in 40 years, what that means for expenditure and how we should be preparing for that outcome. The intergenerational reports have provided a

Last week, under the guise of a forestry “peace deal”, the Gillard government committed $350 million of new industry assistance and other handouts in exchange for the Tasmanian government passing legislation that imposes an unprecedented restriction on free speech. There is nothing new about Australian taxpayers subsidising native-forest logging, but there is something unique about the

Are freedom of speech, freedom of association and the freedom to protest left-wing or right-wing issues? While Senator George Brandis was thundering away this week about the importance of a free press, I’m not sure his liberalism stretches to supporting Julian Assange and the desire of WikiLeaks to ”let the information free”. Similarly, while the

Fred Gale’s article, Tasmanian Forests Agreement: deeply flawed, worth backing, provides interesting insights into the views of one segment of the Tasmanian community that supports the Tasmanian Forest Agreement. However, he fails to fully grasp many of the fundamental reasons for continuing opposition to the deal and its associated legislation. Most notably, there is no

Two weeks ago, I explained the consequences of the Australian Conservation Foundation, The Wilderness Society and Environment Tasmania support for the so-called ”forest peace deal” in Tasmania. The deal obliges them to cease all protests that might impede the ability of native forest loggers to sell their woodchips, take active steps to help silence other

Economists are often accused of knowing the price of everything and the value of nothing. Consumers, on the other hand, are assumed to have good knowledge of both. Indeed free-market economics rests more heavily on the assumption that individuals know what’s best for them than on any other assumption. While it is relatively clear that

The Chicken Littles are at it again – scaring us about the level of government debt and the deficits that bring about debt. Gina Rinehart has claimed that the present level of government debt ‘is simply unsustainable’ and that ‘Australia had to take action to avoid following Europe into economic misery’. Ms Rinehart should know

Climate change and food security are among the biggest problems facing the world today, and the fact that an increase in the former means a lot less of the latter simply makes both problems even more urgent. While the overlap in the consequences of these two problems might be obvious, what is less clear is

Contrary to the speeches made by many politicians, national economies are not like households. Indeed, the household management analogies that politicians often use to explain their approach to budgetary policy are rarely useful or appropriate. The way the Coalition is using the analogy is simply bizarre; they seem to have confused micro-economics and macro-economics. While

Federal government budgets are always strange affairs. They are billed as fact-based, hardnosed economics, when in fact they are far more about political theatre and posturing. While the budget is supposed to reveal the economic credentials of a government, most economists are left shaking their heads. Take the debate around the surplus. Both the Government

Regardless of the result of the next election, the ALP will hold an inquiry into what went wrong. How on earth, they will ask, could a government presiding over low unemployment, low inflation, low levels of public debt and a triple A credit rating be seen as poor economic managers at a time when the

Confusion lies at the heart of Treasurer Wayne Swan’s sixth budget. Does he want to be a big spender or a low taxer? Is he a Keynesian who is relaxed about the budget deficit, or is he a fiscal conservative determined to rein in public spending? Who can say?

My fantasy budget would be one that attempted to match the government’s spending to the public’s priorities and one in which taxing and spending policies, otherwise known as fiscal policy, was based on a close reading of simple economic theory rather than a quick skim of what’s trending on Twitter. Australia has one of the

The Opposition has proposed a paid parental leave scheme that offers to replace a woman’s wage if she takes time off following the birth of her child. Tony Abbott expects to raise $3.5 billion with a 1.5 percentage point increase in the company tax rate. But the Australian taxation system is a complicated beast and

In 1987 Prime Minister Bob Hawke promised that by 1990 no child would live in poverty. While those words have haunted him ever since, a new analysis by The Australia Institute reveals that his government did more to tackle poverty than all subsequent governments. Under the Hawke government, poverty rates dropped when welfare benefits rose

Passage of the Tasmanian Forest Agreement Bill in the state’s lower house effectively ended three years of negotiations between the forestry industry and environment groups. The deal is being celebrated by many as a resolution to the 30-year conflict over native forests in Tasmania and a win for the environment and economy. Nothing could be

QUEENSLAND Premier Campbell Newman has stared down former federal treasurer Peter Costello and he deserves some credit for that. A stocktake of Australia’s electricity now, compared with two decades ago, confirms that the privatisation and corporatisation of the sector has been a massive failure. An analysis of the sector since Victoria privatised power in the

The Australian native forest sector has been in decline for the past two decades and all but fallen off a cliff since the onset of the global financial crisis in late 2008. The forestry lobby has tried to lay the lion’s share of the blame for its predicament at the feet of the environmental movement,

What is the corporate equivalent of a dole bludger? For all the talk about class warfare in Australia it is interesting that the conservatives have a pejorative name for individuals who need support from the state but progressives don’t even have a term for the foreign companies that make huge profits but still have their

In New Zealand, cabinet documents are routinely released soon after cabinet has made a decision. In fact, the New Zealand guide for accessing cabinet documents states explicitly that the need for public servants to provide “frank and fearless” advice is not a reason to keep cabinet submissions secret. Where many Australian public servants might react

Tony Abbott’s Direct Action Plan has been ridiculed by many as expensive and unworkable. One of the primary objections has been that the centrepiece of the policy, the Emissions Reduction Fund, is a baseline-and-credit scheme that will require counterfactual baselines to be set for every participating polluter. The baseline for a given polluter will be

Last week, CSR closed a Sydney factory and made 150 people redundant. This was not caused by the carbon price, the mining tax or our industrial relations laws. The simple fact is that the high exchange rate that accompanies our mining boom has made many manufacturers uncompetitive. How much income support should they receive? How

Over the past century thousands of generous Australians have died and left some or all of their estate in a “perpetual trust” to be used for philanthropic goals. But most of the “perpetual trustees” have not been as long-lived as the funds they were managing and many funds were bought up by larger financial institutions

The fact that Gina Rinehart inherited billions of dollars apparently means that people earning $150,000 a year are entitled to feel average. The average income for an employed person in Australia is $58,375.20 a year. The median is $50,076. $150,000 a year is a lot of money. It is not average, it is not middle,