Monetary policy is recognised as being less effective as official interest rates approach zero. There are two main reasons. First, spending in Australia on investment is not very responsive to reductions in interest rates. Second, any reduction in official interest rates is mediated by the banks and other financial institutions. For practical reasons deposit rates cannot go below zero so, in order to maintain interest margins banks have to resist reductions in lending rates and that effectively nullifies any impact of reductions in official interest rates.
New research shows seven in ten Australians (72%) think that, if Australia is at risk of a recession, the Government should prioritise economic stimulus over the budget surplus.
The Australia Institute surveyed a nationally representative sample of 1,464 Australians about their economic priorities.
Neoliberalism has made Australia more fragile, fractious and open to foreign influence. We talk a lot about the rise of Chinese influence but there’s less discussion about the decline in our national self-confidence. Despite living in the world’s 14th largest economy with some of the lowest taxes in the developed world, neoliberalism has allowed successive governments to make us feel poor. Our misplaced sense of poverty leads us to make poor decisions.
New research from The Australia Institute has shown that more than 27,000 jobs in South Australia, Victoria and Tasmania would be put at risk if drilling for oil in the Great Australian Bight is allowed to go ahead and a catastrophic spill occurs.
Norwegian oil company Equinor is planning exploratory drilling for oil and gas in the Great Australian Bight beginning in late 2020. Modelling commissioned by the oil and gas lobby shows that South Australia is unlikely to receive any noticeable benefit from tax payments as a result of oil and gas production in the Great Australian Bight. The tourism, fishing and aquaculture industries on the SA coast already employ over 10,000 people and provide sustainable benefits through locally owned businesses. Across South Australia, Victoria and Tasmania, those same industries currently employ over 27,000 people. These jobs would be put at risk by oil development in the Bight.
The Australia Institute supports the Murray-Darling Basin Commission of Inquiry Bill 2019.
This submission considers the implementation of the Basin Plan from a financial auditing perspective.
“The Business Council of Australia proposal for an Investment Allowance deserves support,” said Ben Oquist, Executive Director of the Australia Institute.
“Given the weakness of the Australian economy, with interest rates heading towards zero and monetary policy effectively being exhausted, other measures to stimulate the economy deserve support.
“The BCA proposal should be supported at least for the medium term, and could be strengthened with the addition of a ‘fiscal responsibility’ sunset clause.
The economic benefit of the salmon industry to Tasmania is weighted strongly against its environmental and social impacts. Yet it accounts for just 1% of jobs in the state.
Over 5 years $3.8 billion worth of fish were sold, but just $64 million tax paid, while $9.3 million in subsidies were received in 2 years. Changing generous leasing arrangements to the Norwegian model could raise $2 billion for community development.
The release of ABS Household Income and Wealth figures confirm that the bottom 40% of Australians are going backwards. Wealth of the bottom 40% has decreased
Not only has the average wealth of the bottom 40% fallen, the total wealth of the bottom 40% has also fallen. Meanwhile, the top 20% saw their total wealth increase by $600 billion to a staggering $6 trillion dollars.