Economics

Time for a new agriculture R&D model

Australian agricultural production reached AUD $60B in the 2017/18 financial year and directly employs some 370,000 people across 120,000 individual businesses. Over the past forty years the industry has gone through significant structural change including amalgamation of smaller holdings, reduction of tariffs, increased Free Trade Agreements and the emergence of large corporate production enterprises. Still, approximately 94% of the industry is family owned and operated.

Over this same period the level of innovation driven by education, production systems advancements and technology has increased exponentially. Agriculture production has always been a business first, however the demands from the downstream supply chain have placed extraordinary pressure on producers to be more efficient.

The agricultural industry in Australia is very fragmented, therefore adaption and adoption of new technology, systems and practices has historically been slow. However, this has certainly changed in the past fifteen years especially in cotton, grain and horticulture where change … Read the rest


Central bank monetary meddling spells Groundhog Day for the global economy

The stock market dip in October saw an onset of hysteria regarding the state of the global economy, with many analysts asserting that another sweeping worldwide downturn is imminent. Trade tensions, a poorly timed US fiscal stimulus, slowing Chinese growth, and a messy and uncertain Eurozone have signalled to many that the perfect storm is brewing which may spur another global recession.  

But as most of our economists, policymakers and journalists mull over economic indicators and look towards the horizon for an impending crisis, others argue the symptoms of another global economic catastrophe have been unequivocally fixed in the rear mirror since 2008.

September marked a decade since the bursting of the housing bubble in the US which triggered the collapse of the stock market and economic meltdown felt around the globe. Governments and central banks subsequently took actions to stimulate demand by pumping money into their respective economies and Read the rest


The dangers of a two-tiered tax system

Labor has thrown its support behind the Morrison government’s tax cuts for small businesses, and while such reforms should be embraced, creating a two-tiered tax system will have negative consequences for the Australian economy.

Under the proposed legislation, businesses with revenue of less than $50 million will be subject to a 25 percent business tax rate while those earning over the threshold will be taxed at 30 percent. Business tax cuts have become highly politicised in Australia, and the parliament’s unwillingness to budge on the issue puts us at odds with other developed countries who have implemented cuts over recent years.

Lowering the business tax rate would be a great policy, but creating a tiered system is not. There are two ways in which high business taxes will harm the economy. They reduce the savings rate by increasing prices, and they hamper economic growth, job creation, and wages by stifling Read the rest


Was Jesus Christ a communist?

This article is an adaption based on a talk given by James at LibertyFest Brisbane 2018. 

Definitions are important. A quick dictionary definition of communism tells us that it’s a theory or system of social organisation in which all property is owned by the community and each person contributes and receives according to their ability and needs. We’ve all heard that before.

It’s not a bad idea in theory, but of course, we know that in practice every manifestation of communism in the world has ended in a bloodbath. So I’m dubious that Jesus was a communist. He might have agreed in theory with the idea, but in practice we see that communism does not live up to its altruistic ideals.

The devil is always in the detail, and the words “system of social organisation,” are the danger. With any system of social organisation, the essential question is: can I Read the rest


What’s wrong with super?

In 1992 in an effort to pre-emptively deal with the challenges of an aging population, superannuation was made compulsory in Australia. While our super system may seem like a good idea, it doesn’t function as it should. Nor will it be able to, unless there are some major policy changes.

Recently, former Prime Minister Paul Keating, the man responsible for compulsory super, called for a “national insurance” scheme to support the elderly in retirement. He claimed that only the government had the ability to insure “across the generations”, and that super wouldn’t be enough to support retirees as they now live far longer than they did, on average, in the early 90s.

Keating is wrong for a number of reasons. Firstly, given the attention span of governments, which peculiarly correlates with the electoral cycle, they should not be trusted to develop sustainable long-term policies. This is evidenced by the fact Read the rest


Blame the government for high fuel pump prices

Australians are becoming increasingly frustrated with the ever-rising cost of living. This, combined with a stagnant wage environment has led to some becoming more vocal in their anger, as seen in the recent calls to boycott fuel stations. Australians are angry, and rightly so.

The call for a nationwide boycott of petrol stations on October 26 has come about as a result of outrage over the excessive price of petrol and the seemingly lucrative profits shareholders and owners are making. While it’s positive to see people wanting to take action, their anger is misdirected.

What some may not consider is how much of this cost can be blamed on the government, and while the original call to action focused on the role of taxes, many are now calling for price ceilings to be imposed, or for fuel companies to be taxed more heavily. This is the wrong way to deal … Read the rest


The liberation of the Chinese woman

How the free market freed women and entrepreneurs in Hong Kong.

The visitor to Hong Kong today sees a bustling hive of energy where even the New Yorker is a slowpoke. It’s a place where people of all races and cultures live and work in harmony. It’s also a place where, long before the change of sovereignty from Britain to China in 1997, the gweilos [“long-nosed barbarians”] were being displaced in all spheres of human action by locals. [Under British rule, only the government lagged behind — only there could the criterion of race override the criterion of ability.]

Hong Kong is one of the most successful multi-racial societies in the world. But this is a relatively recent development.

The major difference between Hong Kong and other peaceful multi-racial/multi-ethnic societies like Australia (and the US) is that in Australia minorities, over time, lose their separate tribal identities and become members … Read the rest


Haque’s critique of capitalism would send us all to Venezuela

So, just what is wrong with Umair Haque’s article If the Point of Capitalism is to Escape Capitalism, Then What’s the Point of Capitalism?

Well there is a lot wrong with it from start to finish.

In Haque’s description of the capitalist world, people’s objectives are couched purely in materialist terms – “the worker is trying to become a manager. The manager is trying to become a capitalist.” Haque seems oblivious to the notion that capitalist societies already allow people to live on hippy communes if they wish whereas socialist societies do not allow people to opt out of the commune.

His description of capitalism as being “like a pyramid, which we’re all climbing” is mistaken.  So is his example of capitalism in its purist form, in which he labels the slave owner as the purest capitalist of all.  But what he is describing is actually a form of feudal … Read the rest


Intervention will NOT solve our energy crisis

The Liberal cabinet have officially dumped the contentious National Energy Guarantee (NEG), but Scott Morrison and new Energy Minister Angus Taylor are now faced with a policy vacuum which they urgently need to address.

The combination of modest wages growth and higher electricity prices are hurting Australian households, who have been forced to endure a 56 per cent increase in real terms on their electricity bills over the last decade. The NEG, formulated to address the “energy trilemma” of security, reliability and affordability on a national scale (excluding WA and the NT), was the Turnbull government’s answer to the crisis, but ultimately sparked  its demise.

In their rejection of the defunct NEG, the new Ministry stressed that emissions reductions have been stripped away from the energy portfolio. Taylor instead has revealed a renewed focus on affordability for households and businesses, and hopes to be recognised as “the Minister for reducing Read the rest