Inflation
Australia's March quarter inflation figures came in above expectations. Especially worrying was the sticky services and non-tradables inflation, making rate cuts very unlikely this year. To fix inflation we desperately need fiscal policy to start working with monetary policy, rather than against it.
News
Our states should close their foreign offices; the Zuck discusses his AI strategy; why we can't build any more; economists debate AI and productivity; and will China invade Taiwan?
Growth
New Zealand's economy is in trouble, with a double-dip recession and shrinking per capita growth. The decline stems from a lack of productivity reforms and an excessive focus on equity over efficiency. But Australia isn't much better, and we could easily join them if policymakers get complacent.
Budget
In 2023, the IMF ranked Australia #2 in the G20 for budget management, mostly due to good luck and fortuitous timing. The government's "responsible approach" claim is overstated and our fiscal position remains vulnerable to economic shocks.
News
Senator Nick McKim wasted everyone's time for a headline; the replication crisis in social sciences rolls on; why even a little productivity matters; manufacturing can't create enough good jobs; and how crises past can have long lasting effects on people's financial decision-making.
Artificial intelligence
Today's AI, with its many flaws, is more of a force multiplier than revolutionary tech. Australia should avoid rushing to compete with global leaders in the name of AI sovereignty and instead focus on building guardrails, without being so prescriptive as to kill innovative attempts at AI diffusion.
Industrial policy
Australia should resist Albo's "Future Made in Australia", which will make all but a few well-connected businesses and workers worse off. Instead, we should focus on boosting industry productivity through reforms such as eliminating trade barriers and zoning restrictions.
News
How are interest rates affecting Australia; merger reform and misunderstanding competition; India's Modi and policy uncertainty; and does Australia need parliamentary reform?
China
China's economy faces structural issues that Xi's policies can't fix. His "new quality productive forces" strategy will distort the economy and fail to make China rich. To stay ahead, Australia should embrace China's subsidised exports to benefit consumers while ensuring economic flexibility.
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The Albanese government's "new approach" to industrial policy is simply mid-20th century interventionism with a lick of green paint. It is wasting money on uncompetitive industries and creating a reliance on subsidies that are politically difficult to remove, burdening consumers and taxpayers.
Inflation should be the highest policy priority; Bayesian reasoning and the Wuhan lab leak; the urgent need for economic reform; how to reduce debt, Jamaica style; and even when wrong, models can be useful.
Australia risks "sticky" inflation if real wages start to outpace productivity, requiring higher rates longer and job losses as businesses start to adjust on the employment rather than not wage margin. Continued fiscal deficits also fan future inflation risks.
Brisbane should withdraw from hosting the 2032 Olympics. The cancellation costs will pale into comparison to the billions that will be wasted in cost overruns and the creation of underutilised facilities, funds which would be much better spent on other priorities.
Javier Milei's troubles in Argentina; the death of the Scottish Enlightenment; how to regulate AI; Bowen's emission's backdown; the limits of industrial policy; how not to fix housing; and how happy are we, really?
Oh boy. Another year, another GST carve-up that led to a flurry of complaints from the states that 'lost out'. This time it was the NSW and QLD Labor governments that were the most vocal, with NSW facing a $310 million cut, while QLD lost $469 million. For
Tasmanians will go to the polls tomorrow but it's looking like it'll be more of the same; I ask whether you should you fly on a Boeing; why Xi Jinping's leadership meant Evergrande was inevitable; and what's going on across the ditch.
The NBN was a costly mistake that has failed to earn a commercial return, hindered competition, and its business model is being undermined by new technologies. Might it be time to rethink the experiment?
If Australia's policymakers don't address the rising energy demands of AI, we risk falling behind other advanced nations. Despite its many critics, nuclear is a potential solution alongside renewables, and should not be ruled out so cavalierly.
The rental affordability crisis has been overblown; why your shower should be a lot better; Chris Minns is doing great work on housing; the freaky side of politics and academia; and a little green bonus.
Australia's national accounts were released last week and confirmed that our per capita recession – defined as two consecutive quarterly contractions – didn't just continue into the December quarter, but deepened: on a per person basis, our economy is now a full 1% smaller than where it was
The Greens released their much-hyped housing plan last week and while I wouldn't normally give this much attention to a minor party's policy, it was just so full of well-meaning but really confused policy, I just had to weigh in. Before getting into it, I should
