The roles of profits, wages and costs in driving inflation has been widely discussed in recent months. Claims by the Business Council of Australia that profit shares are at a 20-year low are not supported by official data sources.

Labour costs have played an insignificant role in the recent increase in inflation, accounting for just 15 percent of economy wide price increases while profits have played an overwhelming role, accounting for about 60 percent of recent inflation.

The Australian retail, financial, and online advertising markets are all highly concentrated in Australia. As the last 20 years of attempts to increase competition in these sectors has shown, there is no silver bullet to address the market power of dominant firms in Australia. That said, there is clear consensus that new firms, and new

Firms like Woolworths would have still seen profit growth if they paid all of their workers a five percent pay rise and did not increase prices.

Wage growth played no significant role in the recent surge in inflation and, as the analysis shows, maintaining real wages across the entire economy as distinct from merely maintaining the minimum wage in real terms would have a trivial impact on the price level even if firms seek to recoup all of a nominal wage rise as further price increases.

Prime Minister Scott Morrison and Treasurer Josh Frydenberg have stated repeatedly that their government’s approach to stimulus spending in the wake of the covid crisis was for ‘temporary and targeted’ measures to boost economic activity in the short term without creating ‘structural pressure’ on the budget. For example, in announcing first of three stimulus packages

The Coalition government has committed $7.4 billion to the construction of new dams and water infrastructure in Australia, the vast majority of which will be spent in North Queensland even though only 1.1% percent of Australians live in that region and 97 percent of agricultural production occurs outside of that region.

Proposals to halve the beer excise would cost around a billion dollars over the next five years and undermine policies to reduce the abuse of alcohol.

The Morrison Government’s ‘technology not taxes’ approach to climate change policy is little more than new branding for an old strategy – a strategy pioneered by the Howard Government back in the 1990s. Rather than introduce a carbon price, mandatory energy efficiency standards or restrictions of fossil fuel consumption or extraction, the Howard Government pursued

The Morrison Government has released a ‘whole of economy plan’ to achieve net zero emissions by 2050. While they are yet to reveal the underlying economic modelling on which the plan was based, it is still possible to consider the plausibility of the results of the modelling even when the assumptions behind the modelling remain

While it has been widely rumoured that the cost of securing National Party support for Scott Morrison’s commitment to net zero could be up to $20 billion in in budget spending for projects in National Party seats, the real cost of the deal is, according to an analysis of various recent climate change modelling done

Rarely, if ever, has an Australian Prime Minister relied on statistical modelling as heavily as Scott Morrison. Modelling by the Doherty Institute is the sole piece of evidence on which the Prime Minister has formed the view that it is ‘safe’ to significantly reduce the social distancing measures that have helped Australia keep its death

The effectiveness of TTIQ is likely to be dependent upon case numbers, but current modelling does not take this into account. As cases rise to unplanned levels, current TTIQ assumptions undermine Doherty modelling of Phase 2.

How we tax has a big impact on our society. The decision of what and how much to tax is important. This paper provides policy makers with five principles to evaluate our taxation choices.

The latest Intergenerational Report (IGR 2021) reveals that the Treasury Department is more pessimistic about the medium-term outlook for productivity growth in 2021 than when they released the 2015 IGR. In fact, the IGR 2021 reveals Treasury currently believes that none of the Coalition Government’s major reforms introduced since 2015 have had any impact on

Budget incentives to increase investment are expensive, poorly targeted and will do little to improve productivity

Since the middle of 2020, the Australian economy has recovered strongly. By many measures, the recovery to pre-COVID levels looks to be almost complete. But have the gas and gas processing sectors had much to do with it? An analysis of the data suggests the gas industry effectively made no contribution to the economic recovery,

Budget policy has traditionally advantaged men over women. This paper makes seven recommendations on how to improve women’s economic security and use the budget as a tool to reduce gender inequality.

23 new coal projects are proposed in NSW, with total production capacity equivalent to 15 Adani-sized mines. Ten Adanis’ worth of these projects are proposed for the Upper Hunter. Local and international factors mean not all of these projects can proceed. A moratorium should be placed on new coal approvals while a coherent regional planning framework is developed for the Hunter. This framework should be based around a world with net zero emissions in 2050.

The health response to COVID-19 has resulted in large increases in measured unemployment and underemployment as well as large falls in the total number of hours worked. While the size of these labour market effects has been widely discussed, the gender distribution of these impacts has not.

The provision of free childcare provides the rarest of economic policy opportunities – it’s both an effective form of fiscal stimulus in the short term and has the capacity to boost the long-term participation rate and, in turn, the long run rate of economic growth.

Note: This report was edited on 11 February 2025 to fix typos. No significant content has been changed.

If the Australian economy shrinks by 10 percent in the first half of 2020 it will likely take at least 21 months before Gross Domestic Product (GDP) reaches the levels achieved in the December quarter of 2019. Australia has never experienced such a deep and long-lasting reduction in the level of its national income. In

The economic crisis brought on by the coronavirus pandemic requires fast, large, effective and well targeted fiscal stimulus. While the size of the government’s initial three spending packages is appropriate as an initial response, both the shape of that response and the design of future spending measures need to be carefully evaluated. This paper argues

The Australia Institute made a submission to the Legal and Constitutional Affairs Committee’s inquiry into nationhood, national identity and democracy. The submission outlines how the Australia Institute’s existing research applies to each of the committee’s terms of reference.

The Turnbull Government has argued that the passage of its National Energy Guarantee (NEG) will deliver significant price reductions to consumers, with much of the claimed price benefit coming from the ‘greater certainty’ it claims investors will have were the NEG to be agreed upon by state governments and the federal parliament. However, at the

Competitive neutrality policy aims to ensure that government business activities do not have unfair advantages over private sector competitors, particularly in relation to cost or pricing advantages. Price-setting and user-charging are necessary criteria for a competitive neutrality issue to arise. These are not relevant to the ABC or SBS which provide services by which, for

Research from the Australia institute has calculated the impact of the recent Fair Work Commission decision to cut penalty rates on the Commonwealth Budget. The paper from Richard Denniss, Chief Economist at The Australia Institute, found reduced income tax collection from lower wages as well as greater welfare assistance for low income earners is, based on