Tag Archives: microeconomics

Evidence-free policy on cars

His Tel­stra term has appar­ent­ly left Zig­gy Switkows­ki with a taste for Gaullist illog­ic. He reck­ons that the absence of a ratio­nale — oth­er than rent-seek­ing — is not fatal to a pol­i­cy that sup­ports a “diverse” indus­tri­al pat­ri­moine. It is very hard to make a con­ven­tion­al busi­ness case for sub­sidi­s­a­tion of (or, more fash­ion­ably, […]

Abbott’s foreign investment policy

This is the sen­tence that makes me feel most uncom­fort­able: Vot­ers are like­ly to be less hos­tile to for­eign invest­ment if they think that the gov­ern­ment is pre­serv­ing a well-bal­anced econ­o­my.Extract from We are pledged to real reform | The Aus­tralian Most of the Abbott state­ments about man­u­fac­tur­ing assis­tance, trans­ac­tion costs and “eco­nom­ic diver­si­ty” that […]

Why shoot elephants?

It’s the most effec­tive way to kill them. Any game-keep­­er will tell you that. Just as any econ­o­mist will tell you that the most effec­tive way to con­trol obnox­ious behav­iour, like pol­lut­ing the riv­er, or just unde­sir­able behav­iour, like dri­ving your car into the city, is to tax it. Are there alter­na­tives to shoot­ing? Yes, […]

Prices to grow 20 percent faster

Among the slo­gans that the Labor/Greens alliance will pound out over the next few weeks is that their coal tax is “low cost.” They don’t seem to under­stand the mean­ing of the CPI increase revealed by their own mod­els. But worse, as far as I can see they don’t under­stand even basic house­hold bud­get­ing. The […]

When is “reform” not a reform?

No doubt Ms Gillard will assure us, next Sun­day when she announces the coal tax she has agreed with the Greens and two “inde­pen­dents”, that this is a “reform” that will secure a bet­ter eco­nom­ic future for Aus­tralia. But a “reform” is no reform when… It is not adapt­ed to its pur­pose: The Gillard-Brown coal […]

So now it’s a coal tax?

What is the point of the “emis­sions” tax now? By exclud­ing petrol from their pro­posed tax, the Labor/Green alliance have moved the goal posts to make the tax look less like an “own-goal” to the con­sumer. In doing so they have made coal pro­duc­tion and use an explic­it tar­get, although that is where our com­par­a­tive […]

Learning to love the Boom

Sen­sa­tion sells, of course (“Salut DSK!”). Today’s Aus­tralian car­ries a gloom-laden account of Trea­sury Sec­re­tary Mar­tin Parkinson’s address to the Mel­bourne Institute’s Eco­nom­ic and Social Out­look con­fer­ence about struc­tur­al chal­lenges posed by the min­er­als boom. But news­pa­pers have been slow­er to pick up on two oth­er talks at the same con­fer­ence that I found still […]