Economics
Now I have vacated the job of helping edit news.com.au, let me reveal my dreadful desire to write an almost unthinkable headline: “Rates hike means more gain for savers”.
It’s pretty well inconceivable that any major media outlet would lead with this sentiment for fear of alienating all the hard-pressed homeowners, the millions of working families and Aussie battlers feeling the pinch in the ever-tightening mortgage belt.
This holds true from the most rabid reactionary radio shock jock, through the marching minions of Murdochdom (I am yet to hand back the company-issued electric shock collar), to the fairy floss fops of Fairfax and even unto the ABC commissars of collectivist cant.
Continue reading "Come on RBA, get those rates up you good thing" »
The leaks have started, the little details of the federal government’s plans to rescue the health system are starting to filter out, with stories in newspapers hailing Health’s Shot in the Arm and Rudd to Cut Away Dead Tissue.
But beneath the gushing promises of more beds and more money there are signs that the government is considering changing the way it funds hospitals.
NSW doctors support any measures that untangle the way health is currently delivered. There are too many layers of management, too much complexity in the funding, and not enough focus on patients. So we agree there are problems. But our starting point is that any solutions should be focussed on untangling the current mess.
Continue reading "How bureaucrats could step in and ruin health reforms" »
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casba says:
@ Persephone Ah Persephone! I knew I would get a response. Fair suck of the pomagranete seed (illuding to your love of the underworld)....clearly you have almost chocked on your own bile and froth….or hubris! You have totally missed my intended subtlety and opted for the typical narcissistic response. However,… Read more »
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Jack says:
Shere, I suggest you go and see your doctor immediately. Read more »
The experiments went like this. Scientists took pairs of people and gave one of them a big wad of money. Then they wired them up and watched what happened as more cash was handed out.
“People who started out rich had a stronger reaction to other people getting money than to themselves getting money,” Colin Camerer, one of the study’s coauthors, told the Freakonomics blog. “In other words, their brains liked it when others got money more than they liked it when they themselves got money.”
The science part: the circuitry of the brain’s reward centres is sensitive to inequality. The basic finding is that regardless of how much money you have, humans respond better to poor people getting money than rich people.
Continue reading "Are people hard-wired for income redistribution?" »
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Nathan H says:
Hard-wired for income-redistribution? Hardly. The original press release contains two crucial quotes: http://media.caltech.edu/press_releases/13327 Q1) “People who started out poor had a stronger brain reaction to things that gave them money, and essentially no reaction to money going to another person,” Q2) “In the experiment, people who started out rich had… Read more »
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David C says:
You dont make the poor richer by making the rich poorer Read more »
Update 3pm: The RBA surprised everyone and left interest rates on hold today.
In recent years a horrendous new phrase has appeared to describe people struggling to make ends meet. They’re suffering from “mortgage stress.”
This week it was reported almost half of the young people who availed of the Rudd Government’s increased help for first-home buyers were suffering from this terrible condition. If true life will get a whole lot more stressful for them over the coming months as interest rates return to normal, starting most likely with a Reserve Bank announcement this afternoon.
Where did this “mortgage stress” phrase come from, anyway? It sounds like some kind of psychological disease that should be covered by Medicare. As far as I can tell what it actually means is you have borrowed too much money.
Continue reading "Are your stress levels going up with interest rates?" »
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jed says:
it’s amazing how the real estate spivs have been out lauding their insane price rises over the past year, then as it gets closer to the RBA decision they suddenly shift and start releasing new figures about cooling demand, price declines and housing stress. they’ve got a statistic for every… Read more »
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Super D says:
The fact that interest rates have not been raised is a very bad sign. It means interest rates need to stay low because the economy is very fragile. Perhaps we are about to have a second dip. That would certainly make for interesting politics. Fancy having negative growth figures announced… Read more »
If things are looking good for 2010, just think about where we will be by 2020 in Kevin Rudd’s Australia.
In 2020, I will be 31 and the Prime Minister will be exactly double that.
Rudd will be at his peak having surpassed John Howard as the second longest serving PM only a few months beforehand. A good consolation prize, after his failed bid for the UN Secretary Generalship in 2016.
Continue reading "Looking forward to a sterile life in Rudd’s 2020 Australia" »
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Sebastian says:
With less wit than a Liberal media release. Read more »
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Darryl Price says:
Electricity - tick Health insurance - no (thanks to opposition blocking the legislation, but otherwise it would be - tick) Water - tick Groceries - unsure Read more »
Tomorrow might be the official national holiday but today will be a mass celebration of a great Australian institution as hundreds of thousands of workers call in sick.
Up to half a million workers are expected to chuck a sickie, voting themselves an extra day off. Even if you’re the conscientious type and decide to rock up to work today, it’s only a four-day week. Wouldn’t it be great if every week was like that?
Well for many workers it could be, with no loss of productivity plus the benefits of reduced energy consumption, lower carbon emissions, less congestion on the roads and more time for family and leisure. The key is extending the four working days to 10 hours, so all the work still gets done. And one US state has proved it can work.
Continue reading "Enjoy a sickie? There could be four-day weeks for life" »
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Julianne says:
I work in the States and my 5 hour workday is the norm - 8-5! No 9-5, thank you. We don’t get paid for our lunch break. I work in the refining industry. All our refineries work on a 9/80 schedule - you work 80 hours within 9 days. Our… Read more »
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Want employers to be fair says:
Unfortunately our employers/clients are too GREEDY these days and won’t accept a 4 day 10 hour week. I have been a contractor for 11 years and 10 years ago employers/clients were happy with you working 4 x 10 hour days as the 40 hour week was still recognised. This was… Read more »
Watching Kevin Rudd exhort the nation to work harder to deliver greater national productivity reminded me of a university attack that humanities students used to level at graduating students in the engineering faculty.
Arts students used to mock engineering graduates for what they claimed was an inability to communicate beyond formulas and equations.
They used to assert engineers would say on graduation: “Last year I couldn’t spell enganeer, this year I are one.”
Continue reading "Hard lessons Rudd is learning about the economy" »
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John A Neve says:
Michelle @1214hrs on 26/1/10. Why does the world need “a superpower”? As I have stated previously, nationalism along with religion are divisive institutions. What is required is a world amalgam and it’s comeing. Read more »
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Michelle says:
Fatalism is not a policy, it is an affliction. The “natural progression” and “one direction” that you speak of leads to the economic and military supremacy of China. Does anyone in their right mind think China can be trusted to replace the USA as a superpower? The world belongs to… Read more »
The Prime Minister of Haiti has estimated the death toll of this week’s earthquake to be over 100,000. Reports yesterday suggest the death-toll could soon rival that of the Boxing Day Tsunami.
It is my firm belief that we could have done more to minimise the magnitude of loss as a result of the earthquake. Neither you nor I have the ability to play God and predict a quake or even lessen its power but what we do have is the ability to alter the death toll from such a horrific disaster.
Over 78% of Haitian residents live in poverty, which is defined by the World Bank as living on US$2 per day, and it is these conditions that are responsible for the saddening predictions from the Haitian Prime Minister.
Continue reading "The high death toll in Haiti is due to poverty, not nature" »
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Scott Morrison MP says:
Well said Richard. Global poverty requires a response as much from individuals as it does from Governments, if not more so. There are countless organisations around the world doing great things in desperately poor coutries. They all need and rely on our ongoing support . Please don’t make your generous… Read more »
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Anton says:
You just hit the nail on the head. We all know they are total lazy and next to useless. Please name an African state that can support itself without hand outs or input from a western country. Answer = NONE! ....Bar South Africa which is slowly turning third world after… Read more »
I recently attended the opening of the Templestowe Community Bank in my electorate. As a result of more than two years hard work by local traders and residents, the village has a bank for the first time in over a decade.
The branch was the 248th to open under the Bendigo Community Bank umbrella, one of the great local success stories of the past decade across Australia.
As the big banks closed their branches, and forced people to use ATMs and online services, many local communities lost an important institution. In some rural areas, this was devastating. In most, it caused considerable inconvenience to local residents.
Continue reading "Save money this year because thrift isn’t a four letter word" »
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Tim says:
Interesting article Kevin. I wonder if you would be willing to return to depression era values for climate change mitigation. Will the Liberals have a ‘carbon thrift’ policy? Rationing perhaps…. Read more »
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Lisa says:
Actually, ‘Spending by all levels of government in Australia was about 34 per cent of GDP in 2007-08, even before the federal government’s stimulus’, according to a story published in The Australian, Dec 16 2009. http://www.theaustralian.com.au/news/opinion/big-spending-poor-results/story-e6frg6zo-1225810745078 Read more »
Global economics rarely moves as fast as it has over the last twelve months. Inflation genie, global financial crisis and now, just eight months later, the interest rate rises are back. So was Australia’s providential passage through the economic storm the product of great economic management, a fortuitous escape or just an expensive hoax?
Up until now mainstream media have almost exclusively subscribed to the first theory. Slowly some commentators are arriving at the second. Ultimately it is likely to be proven to be the third.
The “never waste a crisis” mentality of politicians means that overreaction is always rewarded.
Continue reading "Doomsayers are doomed to be proven wrong" »
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LamingMP says:
Hi DWest, I am outermetropolitan Brissie mp, so not directly affected by this issue, but am happy to pursue an answer for you. Please link up on Fbook or the aph email, sincerely Andrew Read more »
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John A Neve says:
Ziggy @ 0230hrs yesterday, There is now way that I am ignoring our personal debt, that is why I drew Jeff’s attention to it. Likewise, I believe America has reached the point of no return, any time China called in it’s markers America will either go bellyup or start a… Read more »
On 23 November Richard Fleming of the Global Poverty Project wrote an article on the Punch entitled “You don’t have to be a brain surgeon to rejuvenate a life”.
I think it is perhaps fair to say that I am more deeply involved with the beautiful journey of Trishna and Krishna than Richard.
While I cannot avoid discussing the twins, my response is aimed at the broader issues of development and poverty Richard raises in his article rather than focusing only on the unique story of Trishna and Krishna.
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Richard Fleming says:
Thanks for the response Danielle. We at the Global Poverty Project totally agree with your call for a holistic approach. However, my article focused on our Government’s (and more importantly our community’s) greater responsibility for the 1.4 billion people living in extreme poverty (and subsequently dying from preventable diseases) not,… Read more »
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AW says:
I think Danielle conflates a few issues here. There is nothing wrong with people donating money for the separation of the twins or for the institute to gain valuable experience. Also, as Danielle noted, philanthropy isn’t a zero-sum game and it is close to ‘impossible’ to apply a cost-benefit analysis… Read more »
It’s official. We are getting ripped off on food and grocery prices.
A review of OECD statistics over the past 10 years clearly demonstrates that Australia consistently has some of the highest levels of food inflation in the developed world.
This is a wake-up call for Federal Minster for Competition Policy and Consumers Affair, Craig Emerson. The evidence of the power of the supermarket duopoly is now overwhelming and the Minister must move quickly to inject new competition into the Australian grocery sector.
Continue reading "Mr Emerson, tear down this supermarket duopoly" »
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Cameron Price-Austin says:
@COF I think you mis-understood my suggestion. I’m not suggesting the prices themselves be regulated—the supermarkets could still set their own prices. However, if a supermarket owns more than one outlet, the price for an item in each outlet must be identical. For example, the price of a hot chicken… Read more »
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E says:
blah blah blah .. the salient question is ‘Why have Aussie prices risen faster than the rest of the world?’ , thats it. Also ‘consumers create monopolies’ what a load, the ‘competitors’ which were bought out by Woolies/coles were not broke, they were viable businesses. The consumers were happily choosing… Read more »
Fathers Day - or in our house Feathrs or Farthers day depending upon the cards I received last year - is nearly upon the kids. Last year I got lots of cards - approximately 8 by my count. I don’t have that many children nor did I discover I had some I didn’t know about. Instead my known children were extremely productive; to the tune of 2.67 cards per child. What is more, they were all self-made.
We now have a rule at home that Hallmark holidays should mean that no money should be spent that would go anywhere near Hallmark. That means everything is made.
Not only did I get the cards but several paintings and a treasure hunt. The last one was imaginative but, ultimately fast, because my then 6 year old son organised the whole thing but didn’t have the patience to wait for me to decipher his clues and took me straight to the treasure.
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Stefano says:
So Simmo, you confirm what we all know - Father’s day and Mother’s day are just bullshit. Retail exercises contrived by retailers to extract the dollars from your wallet in the name of lurv. Read more »
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Simmo says:
i had the task of buying my own presdent for this year as my wife couldn’t get the kids to agree on what to get me. I was told to get a DVD of my choice which I thought to be easy but the i ended up spending over an… Read more »
There is nothing like an Equal Pay Day to make a man see red.
Writing on Tuesday about research that claims women earn 17.5 per cent less than men in Australia, I drew the wrath of blokes from around the country.
That figure came from the Australian Bureau of Statistics but was used by the newly formed Equal Pay Alliance of 135 organisations to make their point.
Continue reading "Men can’t keep it level when it comes to equal pay" »
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Mark says:
There is no logical reason why there are not more Catherine Livingstones and Gail Kellys out there Well lets start with Applications for Job, Has there been any look at all at the number of creidble applications for Top level jobs? If 40 men and 5 women applied for 2… Read more »
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Mandy Black says:
You are such a fantastic writer Kate, great story. Could it be that some of us have not moved on from the past? I mean our parents, their parents and so on, was all in the mine set that the man went to work and the women stayed home.Therefore a… Read more »
In 2007, Chris Goodall contended that walking may cause more environmental harm than driving.
A noted that a 5km drive would add 1kg of carbon to atmosphere while a walk would seemingly add nothing if you just looked at its direct effects. However, Goodall contended that for many people, they would need more energy to sustain a regular 5km walk. To make up the 180 calories would likely generate 3.6kg in carbon emissions. The trade-off wasn’t even close.
What is significant is that Goodall wasn’t some member of an anti-environmental think tank but himself a strong environmentalist and the author of How to Live a Low-Carbon Life.
And it was he who was suggesting, contrary to one of Al Gore’s dicta in An Inconvenient Truth, that substituting driving for physical transportation might not be environmentally-friendly at all; even if it is friendly to your physical health.
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Steve Franks says:
Based on the rcommended EU ETS Trading scheme that Kevin Rudd would have us join at Australia’s current emissions (580 million tonnes p.a.) and working population (10.6 million), a carbon price of $A225 would correspond to a cost per working person of more than $A12,000 per year, or around 25… Read more »
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Sal says:
Hey Shelley Ruddy is all about shining on the world stage, he is constantly auditioning for a UN role rather then being a good PM. But what is sader is that Aussies have not awaken to this fact. Read more »
This week in Parliament will be an important test of the Opposition’s commitment to both health reform and economic responsibility.
Right now we’re looking at making some of the biggest reforms to our health care system since the introduction of Medicare.
We can’t do that unless we make the hard decisions.
Continue reading "Coalition is being reckless on private health insurance" »
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tracey says:
I am a 72 year old lady whom is on a disabled pension. If you can afford private health cover then why not take it out. I have some crippling and disabling chronis disase problems that the public system has tried to manage but just does not have the resources.… Read more »
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Sherlock says:
Yet another step in the class war that’s been waged by the Rudd Government since the day it took office. It’s refreshing this time to see the responsible minister actually admit it. Read more »
IT seems incredible but barely two years into the greatest depression/recession/downturn/hiccup (take your pick) the world has suffered since the 1930s, we’re already talking about bubbles again.
Experts fear the 30 per cent surge in the local stock market since March – mirroring a similar spike on Wall Street – is building into a premature and unsustainable bubble crying out to be pricked.
Reserve Bank boss Glenn Stevens reckons the housing market, fuelled by record low interest rates and the government’s first-home owners giveaway, is looking dangerously like a bubble that could need a dose of higher interest rates to deflate.
Continue reading "Human nature is to be forever blowing bubbles" »
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barbara.bell says:
My name is barbara. I came here while searching quest of something on google. hope to have a high-minded time here. Read more »
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Terry says:
Clive is correct. Markets will always be influenced by human nature and emotion. The problem comes when governments interfere with so-called free markets, they are only free when the good times roll but when it hits the fan, they get bailed out or given stimulation money. Markets should be left… Read more »
A few days ago, I was part of a group of 6 economists who wrote an open letter arguing for a new Inquiry into the financial system—a so-called “Son of Wallis, Daughter of Campbell.”
Put simply, so much had changed in our understanding of finance, banking and economics and so much ‘on the fly’ policy had been undertaken, that surely stepping back and reviewing our policies above the political fray would be a good idea.
We had hoped that this might get a little media and perhaps push the government into putting an inquiry onto the agenda. Our letter was a long and not particularly reader-friendly affair. But towards the end we asked the following:
Continue reading "Mad furore surrounding the so-called “people’s bank”" »
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Ben Payne says:
Banking is the most influential and least understood industry in society today – we all take money for granted, but few realise how it is controlled and its fundamental principals. Our entire free market, incentivised, profit driven corporate system is completely screwed. Humans are now second class citizens, while the… Read more »
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MikeM says:
As YT alluded to, the Commonwealth used to have a People’s bank; so did the states of NSW, Victoria, South Australia and Western Australia. Two of them collapsed, a third almost did and after privatisation and float, the Commonwealth Bank ended up eventually swallowing the other two. The triggering argument… Read more »
More data today suggest the national economy is in a holding pattern. More than 21,000 people found themselves out of work in June, a rise of just 0.1 of a percentage point in the national unemployment figure.
The Reserve Bank cut interest rates to 3 per cent in April and hasn’t budged them since. And this week the Fair Pay Commission, in defiance of the government and unions, effectively gave low-income earners a pay cut when it froze the minimum wage. The commission argued that it would cost jobs and, as Clive Mathieson pointed out this week, jobless people can’t help the economy as they have zero money to spend.
These consumer sentiment figures show that significantly more Australians are feeling upbeat rather than gloomy about the economy. This is despite a range of forecasts - from banks and the federal government - predicting significant job losses over the coming year.
The unemployment figure today was 5.8 per cent. The crystal ball-gazers say it’s heading for around 8 per cent. Clive also pointed out recently that economists’ predictions are often useless and change tack with the economic winds.
There may yet be some nasty surprises as cuts in business budgets for the new financial year, which started just eight days ago, start to bite. Today, though, I’d like to ask where you think the economy is heading over the next six months. Are we out of the woods yet?
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David C says:
I think you will find US GDP is nearly twice as large as China (14.3 trio against 7.8). In fact US GDP is about the same size as China, Japan and India combined. China is growing now primarily due to government stimulus, this won’t last forever. Read more »
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Paul G says:
@Overflow on China. China is an export economy, however, the majority of its GDP (around 70% and growing) is now internally generated by internal demand. China has hit a point where it no longer needs to rely on Exports to the US to sustain growth - growth can be obtained… Read more »
IT has become so hard to be a smoker. At a recent wedding I was the only person nipping outside during the bad songs for a quick gasper, and I’m sure the smell of tobacco was following me around the room. Lately I’ve noticed security guards starting to move us on when lighting up outside certain buildings. The next logical step in this “ban creep” is for councils to outlaw smoking in public spaces such as parks and on footpaths. The only place you could smoke would be inside your own home - which would be the end of smoking for me, as there’s a ban there too.
Anti-smokers now believe a fresh round of punitive tax increases could wean a million Australians off the cancer sticks. The price of some packs would be headed for around $20. This is exasperating. If everybody knows the dangers and costs, as the latest unnecessarily revolting ad campaign says, why is this state-sponsored suicide still legal at all? Why don’t we just outlaw cigarettes?
This graph, in its unedited form, shows the relationship between consumption of tobacco and the price of a pack. It demonstrates that price rises work, but I’ve added in what I believe to be an additional force on consumption - the dramatic fall in the social acceptability of smoking that began in the 80s and has more recently fallen like a ciggie butt to the footpath.
Continue reading "Stop being polite about smoking, and just outlaw it" »
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Gen X says:
@ Heath. The “ridiculous” thing here is that you berate Kevin Rudd for spending money on schools when you are unable to spell the year five spelling word “ridiculous”. I applaud Kevin Rudd for his economic stimulus package. Read more »
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