A little bit of economic theory is a dangerous thing, and many of the people defending what BHP and Rio Tinto have done to the price of iron ore are demonstrating that they have very little economic knowledge indeed. Economists usually don’t like cartels, or other forms of producer protections, as they help producers and

Joe Hockey’s “do nothing” budget is better than his first “do harm” budget, but he still hasn’t tackled the big issues that face Australia in the wake of the mining boom, writes Australia Institute executive director and economist Richard Denniss. This article was produced for, and originally published by Crikey.com.au – Here. The economy described in

The apparent Coalition aim of cutting taxes does not match its public declarations about reducing the deficit. But tensions within the Coalition make any move on taxes difficult. Does Joe Hockey think removing the deficit levy will make the deficit go away? Announced in last year’s budget, the temporary 2 per cent increase in the

The Earth is flat, climate change is a conspiracy and the only way to collect more money for the states is to collect more money via the GST. How did the nonsensical belief that the GST is the one and only source of commonwealth revenue that can be transferred to the states come to be

The iron ore price is well above its long-term average. Indeed, at $US50 per tonne it is well above the $US36 price that Wayne Swan inherited in 2007. Blaming the iron ore price for Western Australia’s budgetary woes is like blaming the sinking of the Titanic on the iceberg. Yes, it’s a factor and yes,

Imagine this. You’re a State Government minister. Your department and the most powerful industry it regulates are under fire for failing to comply with your government’s own guidelines. Courts, the media and community groups keep complaining that the industry breaks the guidelines and your department lets them get away with it. Even the consultants you

According to the International Monetary Fund, the Howard/Costello government was the most profligate in Australia for the last 50 years. Indeed, while the mining boom was gathering pace they cut taxes so far and so fast that they forced the Reserve Bank of Australia to rapidly increase interest rates. While countries like Norway took the benefits of resource price

Last year Hockey was talking about cutting welfare payments but now, finally, he’s taking about taking on the vested interests in the superannuation industry to bring concessions under control. This time last year Joe Hockey sat on a silk chair telling Spectator Magazine subscribers about the need to cut welfare payments for the poor. Last

Politicians get their fair share of blame for the parlous state of policy making in Australia but they are not the only culprits. The bigger problem is that policy doesn’t get made the way people think it does. It doesn’t get made the way the way academics think it does, it doesn’t get made the

First published in the Australian Financial Review, 24th March 2015 Politics The senate is often describe as obstructionist and causing chaos but it is there for good reasons and governments have to learn to deal with it. Imagine if there was no senate to block Gough Whitlam’s reform agenda. Malcolm Fraser would have had no

While it is not polite to admit it, the plan to reduce the tax paid by wealthy Australians is one of the main reasons that Treasury predicts we will have so much trouble paying for health and aged care in the future. This is all spelt out in the IGR, albeit in the appendices. Last

Originally Published in the Australian Financial Review on Tuesday 10th March.  Thanks to Peter Costello a retired superannuant drawing down $1 million per year, tax free, doesn’t even have to pay the 2 per cent Medicare levy. That is just one of the inequitable and unaffordable time bombs that the last Liberal treasurer planted for

The biggest fiscal problem Australia faces is that we are not borrowing enough to meet our short term circumstances or long term objectives. Australia’s population will nearly double by 2075. We are currently growing by around 400,000 people – the population of Canberra – every year. If we were are serious about quality of life,

A fundamental contradiction lies at the heart of the Abbott Government. Its assumptions about our national security and its assumptions about economic management are in stark contrast. Something has to give. Our foreign and defence policies are explicitly based on the assumption that the US will retain superpower status in the coming decades. But Joe

Governments serve their citizens best when they engage them through informed debate. Scare tactics are not an acceptable alternative. We need to talk about crises. Whipping up a good crisis has become the foundation on which every case for every reform is now built. Budget black hole! Budget emergency! We will wind up like Greece!

Whether Tony Abbott limps on as PM or Malcolm Turnbull swoops in to lead the coalition, it is clear that big changes in policy are on the cards, and the area that is ripe for the biggest change is climate policy. There’s no easier way for the coalition to both signal that they have learned

The Newman government was handing an Indian billionaire billions of dollars of taxpayer money for literally – literally – no reason. During the recent state election, both the LNP and Labor in Queensland broadly supported the Carmichael coal project by Indian mining giant Adani. The key difference was whether they were expecting the taxpayer to

Once upon a time if a project couldn’t make a profit without government support conservative politicians would have called it a bad investment. Not these days. Take, for example, the Queensland government’s plan to spend $2 billion on coal transport infrastructure trying to make marginal mines in the Galilee basin financially viable. Even after enormous

The demise of the Australian car industry does not mark the end of taxpayer assistance in Australia, it marks only the end of highly visible assistance. The free marketeers didn’t win, they only defeated the easy targets. The real rorters not only still grow fat on the public purse, they lead the cheer squad for

The Tasmanian Government is taxing electricity users to prop up the losses that keep bleeding from Forestry Tasmania. Indeed, the $30 million “woodchip levy” funded by Tasmanian business and households is significantly larger than the $22 million annual cost of the Renewable Energy Target that some Tasmanian businesses claim to be so disadvantaged by. Energy

It would be easy to highlight the hypocrisy of the government’s determination to rely on a price signal to reduce GP visits, versus its determination to avoid price signals for reducing greenhouse gas emissions. But what may look like policy inconsistency is actually a central element of the government’s strategy. Scrapping the carbon price helps

Is it OK to break laws that you don’t believe in? Corporate Australia certainly seems to think so. Coles lost a Federal Court battle in June over the definition of “fresh”, when it was discovered their “baked today, sold today” bread range included products made overseas, frozen and transported months earlier. Coles took a slap

The stunning victory by the ALP in Victoria on the weekend raises a number of big questions for the Coalition parties nationally, the most significant of which is whether their strategy for winning elections in recent years has ruined their chances of governing like grown-ups.

Tony Abbott was made for “drop and run” politics.  A key part of media training for politicians, the “drop and run” is a smooth strategy for deflecting a question, promoting a three-word slogan and moving on to attack your opponent. Dodge the query, never dwell on details, just drop your message and shift debate to

The Queensland government’s decision to pour billions of taxpayer dollars into the Adani coal project in the Galilee basin proves, once and for all, that the mining industry are leaners, not lifters.

In a world in which war is waged for humanitarian reasons but sending doctors and nurses to prevent an outbreak of Ebola is considered too risky, almost any spin seems possible. But surely the mining industry’s claim that the best way to tackle global energy poverty is to build more coal mines takes the biscuit.

The term “energy poverty” refers to people who do not have access to electricity and clean cooking facilities. Globally, 1.3 billion people do not have access to electricity in their houses and 2.6 billion people cook by burning coal, wood and other solid fuels. This has major impacts on people’s health, safety and quality of

The climate debate reveals how confused the philosophical underpinnings of political parties have become, writes Richard Denniss for The Australian Financial Review. Public debate about the details of climate policy can be like seven-year-olds arguing over who would win a battle between Spiderman and The Incredible Hulk. The debate is messy because of the combination

If the Greens and Labor really are concerned about cost of living, they should support the re-indexation of fuel excise in return for a say on how this revenue is spent, writes Richard Denniss for The Drum.

You’d never know it from their behaviour, but the Greens hold 10 seats in the current Senate compared to the Palmer United Party’s three. Their current strategy of voting against virtually everything the Abbott Government announces, including things they actually support, has made them largely irrelevant since the last election. It is hard to think