IndyWatch Australian Economic News Feed Archiver

Go Back:30 Days | 7 Days | 2 Days | 1 Day

IndyWatch Australian Economic News Feed Today.

Go Forward:1 Day | 2 Days | 7 Days | 30 Days

IndyWatch Australian Economic News Feed was generated at Australian News IndyWatch.

Saturday, 18 November

22:09

Drain the swamp Pete Wargent Daily Blog

Swamp thing

Since the hiring freeze was lifted, Canberra has seen by far and way the strongest household income growth, with gross income per capita in the ACT up from $101,600 to above $110,000 over the past two financial years.

Nice work if you can get it!

At the other end of the scale household income per capita declined in Western Australia in FY2017, back to below the level seen in the 2014 financial year in nominal terms. 


Disposable incomes followed a very similar pattern, with Canberra absolutely miles ahead of the rest, by a magnitude of almost 50 per cent. 

Surprisingly the Northern Territory has been the strongest performer over the past five years in per capita terms, with disposable incomes rising by +24 per cent. 


Queensland incomes have really struggled since the peak of the resources construction boom in 2012, and income growth has been relatively modest elsewhere.

These numbers are derived from the state accounts, and as ever some household are faring better than others. 

18:08

An opportunity for a Bill of Rights John Quiggin

One of the striking outcomes of the equal marriage survey is that a lot of people who had always assumed themselves to be part of (in Spiro Agnews phrase) the silent majority have been presented with undeniable evidence that they are actually in the minority. Not only that, but the minority to which they belong on equal marriage would be even smaller if it werent boosted by lots of people theyve always thought of as undesirable minorities. Most notably, the note vote was swelled by Muslims and recent migrants from more traditional cultures.

Against that background, its not surprising to see people who have never had a good word to say about the United Nations, or about a Bill of Rights, embracing the idea of incorporating the International Covenant on Civil and Political Rights into Australian law (were already a signatory, but that has no legal effect).

It would be absurd to incorporate a document dealing with topics as diverse as the death penalty and war propaganda (both prohibited) into the Marriage Act. Nevertheless, now that the issue has been raised, its a great opportunity for Australia to get something like a Bill of Rights enshrined into law (though of course it wouldnt change the Constitution).

Its tempting to use the thumping majority recorded in the survey as a stick with which to beat those (variously described as dinosaurs or reactionaries) who campaigned against equal rights on this occasion. But all majorities are temporary. It would be far better to use this moment to make common cause in support of protections for minorities of all kinds.

A couple more points

As occasional commenter Fran B points out on Twitter, theres no risk of the ICCPR becoming a backdoor way of implementing Brandis right to be a bigot. Section 18(3) reads

Freedom to manifest ones religion or beliefs may be subject only to such limitations as are prescribed by law and are necessary to protect public safety, order, health, or morals or the fundamental rights and freedoms of others.

and this clearly includes the protections of our current anti-discrimination law, not to mention Article 26 of the ICCPR which prohibits all kinds of discrimination.

Another appealing feature of this approach is that it doesnt leave room for lots of quibbling about what rights to protect: we cant amend the ICCPR, so the appropriate approach is to legislate it as a binding set of principles, then use subsequent legislation to interpret.

So, lets get equal marriage done straight away, then turn to the broader question of protecting civil and political rights for everyone.

17:00

The Weekend Quiz November 18-19, 2017 answers and discussion Bill Mitchell billy blog

Here are the answers with discussion for this Weekends Quiz. The information provided should help you work out why you missed a question or three! If you havent already done the Quiz from yesterday then have a go at it before you read the answers. I hope this helps you develop an understanding of modern monetary theory (MMT) and its application to macroeconomic thinking. Comments as usual welcome, especially if I have made an error.

Question 1:

Larger fiscal deficits as a percentage of GDP typically mean that there are less real resources available for other productive uses.

The answer is True.

It is clear that at any point in time, there are finite real resources available for production. New resources can be discovered, produced and the old stock spread better via education and productivity growth. The aim of production is to use these real resources to produce goods and services that people want either via private or public provision.

So by definition any sectoral claim (via spending) on the real resources reduces the availability for other users. There is always an opportunity cost involved in real terms when one component of spending increases relative to another.

Unless you subscribe to the extreme end of mainstream economics which espouses concepts such as 100 per cent crowding out via financial markets and/or Ricardian equivalence consumption effects, you will conclude that rising net public spending as percentage of GDP will add to aggregate demand and as long as the economy can produce more real goods and services in response, this increase in public demand will be met with increased public access to real goods and services.

You might also wonder whether it matters if the economy is already at full capacity. Under these conditions a rising public share of GDP must squeeze real usage by the non-government sector which might also drive inflation as the economy tries to siphon of the incompatible nominal demands on final real output.

You might say that the deficits might rise as a percentage of GDP as a result of a decline in private spending triggering the automatic stabilisers which would suggest many idle resources. That is clearly possible but doesnt alter the fact that the public claims on the total resources available have risen.

Under these circumstances the opportunity costs involved are very low because of the excess capacity.
The question really seeks to detect whether you have been able to distinguish between the financial crowding out myth that is found in all the mainstream macroeconomics textbooks and concepts of real crowding out.

The normal presentation of the crowding out hypothesis which is a central plank in the mainstream economics attack on government fiscal intervention is more accurately called financial crowding out.

...

16:18

The gains from cutting corporate tax rates "IndyWatch Feed Economics"

Here is a recent paper by Stephen Bond and Jing Xing:

We present new empirical evidence that sector-level capitaloutput ratios are strongly influenced by corporate tax incentives, as summarised by the tax component of a standard user cost of capital measure. We use sectoral panel data for the USA, Japan, Australia and eleven EU countries over the period 19822007. Our panel combines internationally consistent data on capital stocks, value-added and relative prices from the EU KLEMS database with corporate tax measures from the Oxford University Centre for Business Taxation. Our results for equipment investment are particularly robust, and strikingly consistent with the basic economic theory of corporate investment.

Via Henry Curr.  Here is a piece by Fuest, Piechl, and Siegloch, forthcoming in the American Economic Review:

This paper estimates the incidence of corporate taxes on wages using a 20-year panel of German municipalities. Administrative linked employer-employee data allows estimating heterogeneous worker and firrm effects. We set up a general theoretical framework showing that corporate taxes can have a negative effect on wages in various labor market models. Using an event study design, we test the predictions of the theory. Our results indicate that workers bear about 40% of the total tax burden. Empirically, we confirm the importance of both labor market institutions and profit shifting possibilities for the incidence of corporate taxes on wages.

Via Dina D. Pomeranz.  Ive been reading in this area on and off since the 1980s, and I really dont think these are phony results.

The post The gains from cutting corporate tax rates appeared first on Marginal REVOLUTION.

16:00

Australian Dollar and Bitcoin "IndyWatch Feed Crypto"

1.00 AUD = 0.0001 BTC
0.0001 BTC = 1.00 AUD
Converter

09:56

Heads up Pete Wargent Daily Blog

Inward bound

As the economy and especially hiring have picked up, so too has immigration, with long term arrivals into Australia hitting a record high 777,440 over the year to September, for a year-on-year increase of +5.5 per cent. 


Lots of Aussies head overseas too, of course, though ABS research has found that long term departees commonly end up back in Australia pretty quickly. 

Short-term arrivals also hit a record high of 8.72 million over the year to September.

Although the pace of growth here appears to be slowing, the Aussie dollar is now declining again after a brief interlude, which should spur tourism faster, higher, and stronger in 2018.


Oh, and there's the Commonwealth Games boost to come next year too.

Uni corn

Drilling deeper into the figures, unsurprisingly education arrivals are at an all-time high.

The next big international student intake won't show up until the February 2018 figures, but 2017 has been a record year for enrolments, and no doubt a lucrative one.

If you've felt that the inner city centres have become busier in recent years, then you'd be right, with the international student phenomenon being largely an urban trend. 

00:54

Weekend reads - must read articles of the week Pete Wargent Daily Blog

Summarised for you here at Property Update (or click the image below).


While you're there don't forget to subscribe for the free Property Update newsletter.

Friday, 17 November

22:33

Backfire: plebiscite shows appetite for action Crispin Hull

JUST as the postal plebiscite has blown up in the faces of the conservatives who promoted it, let us hope that any subsequent rearguard sabotage attempt under the guise of freedom of religion does the same thing.

For more than two decades (since Howard was elected Prime Minister) politicians have been utterly risk averse, fearfully imagining that some silent, conservative, Christian majority lurks out there ready to punish them at the slightest hint of social progress on human rights or fairness to the marginalised LGBTIQ, unemployed, refugees, homeless.

Wednesdays result should put paid to that.

But if we are going to turn over some rocks in a debate on religious freedom we might see a greater need for freedom FROM religion, not freedom OF religion.

For a start, religions get a free kick under the Marriage Act. If you are a minister of religion of a recognised denomination you are automatically entitled to be registered as a marriage celebrant.

Civil celebrants, on the other hand, have to meet other requirements, such as knowledge of marriage law, an ability to advise couples of relationship services, and be of good character and standing.

With respect to marriage, surely, we should have the same rules for everyone. Wasnt that demonstrated on Wednesday?

Perhaps we should start a campaign to take religion out of marriage laws altogether. At law, everyone should marry before a competent civil official. If religious people feel that that would not be a real marriage they can go off afterwards and do a religious ceremony.

Further, why does the parliamentary session at which these questions are debated begin with a Christian prayer? If parliamentarians mirror the community, about a quarter would be atheists and most of the rest would not be observant Christians.

Theres more. Why should religions get tax-free status for money raised and spent for proselytising their religion and for raising money through commercial enterprises even if there are grounds for tax breaks on charitable work?

And on the charitable, medical and educational side, why should religious institutions escape ordinary anti-discrimination employment laws, especially when they get very large amounts of public money for this and are significant employers?

And why have we wasted $300 million over the past half decade on the schools chaplaincy program under which educationally untrained religious operatives spout uneducational, unscientifi...

20:50

Debt Rattle November 17 2017 "IndyWatch Feed Economics"

Arthur Rothstein Night view, downtown section. Dallas, Texas 1942   Americas Racial Wealth Gap Is Staggering And Government-Created (BI) Australias Private Debt Juggernaut Rolls On (LFE) John Malone says Amazon is a Death Star (CNBC) Einhorn Says Issues That Caused the Crisis Are Not Solved (BBG) Corporate Zombies Are

The post Debt Rattle November 17 2017 appeared first on The Automatic Earth.

20:14

The Weekend Quiz November 18-19, 2017 Bill Mitchell billy blog

Welcome to The Weekend Quiz. The quiz tests whether you have been paying attention or not to the blogs I post. See how you go with the following questions. Your results are only known to you and no records are retained.

1. Larger fiscal deficits as a percentage of GDP typically mean that there are less real resources available for other productive uses.



2. For a nation running a current account deficit, national income adjustments will ensure government fiscal balance is in deficit if the private domestic sector seeks to increase its saving overall as a percentage of GDP.



3. If the central bank pays a positive interest rate on overnight reserves then it no longer would have to conduct open market operations to ensure its policy rate is sustained (ignore any reserve requirements).


...

16:00

Australian Dollar and Bitcoin "IndyWatch Feed Crypto"

1.00 AUD = 0.0001 BTC
0.0001 BTC = 1.00 AUD
Converter

10:10

Wanna be startin' somethin' Pete Wargent Daily Blog

Northern Powerhouse

We all know that employment growth since the peak of the resources construction boom in 2012 has been all about Sydney and Melbourne.

Until now!

Queensland is suddenly off to the races, with trend employment growth blazing +4.62 per cent higher across the year to October, by far its strongest annual result since before the financial crisis. 


Of course, it's harder for the most populous states to record such a large percentage increase, but even so, this has suddenly become too big a move to ignore. 

Some questions we've not had to ponder too often in Queensland since 2007 include: where, why, & what are the new jobs? And will it continue?

Where? Pretty much all around the state, as I've looked at here previously (Queensland is the one mainland state where employment is not excessively capital city focused). 

Queensland is also coming from a relatively low base, after a rough trot, and much of the hiring has been part time in nature. 

The likely drivers of the upturn might range from a surge of Chinese visitors and the dollar-driven tourism industry, the commodity price rebound creating jobs upstate, a slew of public sector and NDIS hiring, and perhaps some late spillover or multiplier from the now-fading residential construction bonanza.

Agriculture exports have been strong, so that's another possible bright spot, plus some increased aggregate demand creating services jobs as interstate migration has picked up.

Just from driving around various parts of SEQ, there are evidently an awful lot of roads being built right now, while there are several significant infrastructure projects underway or about to commence in Brisbane.

SEEK...& ye may find

We'll get more detailed numbers in due course on the historic hiring.

But what of next year, will Queensland jobs growth be sustained or sustainable as we count down to the Commo...

IndyWatch Australian Economic News Feed Archiver

Go Back:30 Days | 7 Days | 2 Days | 1 Day

IndyWatch Australian Economic News Feed Today.

Go Forward:1 Day | 2 Days | 7 Days | 30 Days

IndyWatch Australian Economic News Feed was generated at Australian News IndyWatch.

Resource generated at IndyWatch using aliasfeed and rawdog