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.

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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.

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Modelling the Australian GFC stimulus

Humphreys, J. (2012), “The Treasury’s Non-modelling of the Stimulus“, Agenda, 19:2, Australian National University, Canberra, pp39-51.

In late 2008 the global financial crisis (GFC) sparked a boom in Keynesian economic commentary and activist fiscal policies. The Australian government responded with an immediate $10.4 billion ‘cash-splash’ to households (Commonwealth Treasury 2008), followed by a $42 billion ‘Nation Building and Jobs Plan’, which was to include $12.7 billion more hand-outs as well as a $28.8 billion increase in government capital investment. In total, the government ‘stimulus’ was estimated to be about $52 billion. If we included all discretionary government spending that happened after the GFC then the number would be far higher.

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