Articles – Page 3 – John Humphreys

How smarter tax cuts will boost the budget

_{Published in The Spectator Online on 24 October 2019 under the title “How smarter tax cuts will boost the budget“.} _{Written in my capacity as Research Associate at the Centre for Independent Studies.}

Treasury’s flawed tax model has led to the government’s structural reforms being estimated to cost much more than they actually will, and scheduled much later than they should be.

In Jumpstart Productivity: New modelling pinpoints better tax cut program, the impact of the tax reforms is calculated using a new dynamic model that accounts for behavioural changes, rather than the government’s static model — which assumed people do not respond to incentives.

The modelling shows that the long-term structural tax cuts planned for 2022 and 2024 are much cheaper than expected.

Tax cuts & economic growth

_{Published in The Australian Financial Review on 17 October 2019 under the title “Tax is the first lever the government can pull for growth”. Written in my capacity as Research Associate at the Centre for Independent Studies.}

The Australian economy has stalled. According to the most recent national accounts, Australia’s GDP per person has not increased over the past year, and the IMF predicts the stagnation will continue in the short term.

This gloomy news has led to the inevitable calls for more monetary and fiscal stimulus. But these are the wrong ideas at the wrong time.

There may be a time and place for stimulus policy. Specifically, if there is a sudden shock that decreases aggregate demand, then stimulus policies can potentially improve the situation by boosting consumption spending. But these macroeconomic tools are blunt instruments designed to create a short-term boost during an emergency — and they do nothing to improve long-term productivity.

Untangling left-liberals from left-authoritarians

_{Published at LibertyWorks blog on 19 December 2016 under the title “What I’ve learned from Dr Jordan B Peterson, Professor of Psychology”.}

Dr Peterson is a former Harvard professor who now teaches at the University of Toronto, and he has done some rigorous and fascinating quantitative research into the behavioural and personality traits of people with different political philosophies, including ground-breaking work on Political Correctness (PC) or Social Justice Warriors (SJW).

Review of 2014 QLD budget

_{Published in The Conversation on 4 June 2014 under the title “Queensland budget another case of the disappearing surplus”.}

With the release of a plan to sell and lease $33 billion worth of assets after the next election, the state government has shifted attention away from its budget. Though in truth, it would have been quite easy to distract people from this budget, because there is nothing new.

We already knew that the ever-elusive budget surplus had disappeared. Two years ago I commented in The Conversation that: “The forecast for a fiscal surplus in 2014/15 is nice, but it is hard to take long-term budget predictions too seriously” and also that “it is easy to predict future austerity and surpluses, but it is harder to actually make it happen”. Time has justified that scepticism. The government’s original estimate for 2014/15 was a A$0.7 billion surplus, but it is now expecting a A$2.3 billion deficit.

Alternative to the minimum wage

_{Published in The Drum ABC Online on 10 June 2013 under the title “Minimum wage is bad social policy”, with an opening blurb of “There are more efficient, equitable and transparent systems for fighting poverty than implementing a minimum wage”.}

Imagine a free-market economy with no government welfare. Some people earn high incomes and others earn low incomes. Now consider that some kind-hearted bureaucrats come along and want to introduce a government policy to help the low-income earners. How should they do it? Let’s consider two options.