China recently launched its US$50 billion Asian Infrastructure Investment Bank in Beijing. AAP

Why we should question G20 claims of a global infrastructure shortfall

The G20 infrastructure agenda cites an OECD prediction the global infrastructure gap will be worth US$70 trillion by 2030. It is predicting this gap will grow. Yet it’s difficult to assess the credibility…
Finding the balance in state-federal funding is harder than it should be. Image sourced from www.shutterstock.com

Renewing federalism: state budgets, VFI and a ‘hard budget’ constraint

The reform of Australia’s federation is under review. In this special series, we ask leading Australian academics to begin a debate on renewing federalism, from tax reform to the broader issues of democracy…
A formal, transparent and public assessment of infrastructure benefits and costs is the only way to ensure the right decision are made. Dan Peled/AAP

Realising Abbott’s infrastructure dream will need state support

One of the many challenges facing the Australian economy over the next decade or two concerns investment in transport, electricity, water, communications, health and education, and other infrastructure…
Realistic reforms to federal-state financial relations are possible with the right amount of political will. AAP/Alan Porritt

Could ‘hard budget constraints’ fix the federation’s fiscal feud?

The federal budget reignited debate over federal-state relations with a decision to cut $80 billion funding for the state responsibilities of schools and hospitals over the coming years. So how can federal-state…
Australians sympathise with farmers, but governments need to choose policy carefully. AAP

Help farmers with direct assistance rather than subsidies

Droughts, seasonal fluctuations, and changing commodity prices are a given and unchangeable characteristic of farming. Farmers voluntarily invest in agriculture and expect that the good times will more…
Deficits in the longer term are not sustainable. AAP

Structural deficit is Hockey’s elephant in the room

Media reports preceding the mid year economic and fiscal outlook suggest we should expect a deficit of just under A$50 billion, a further deterioration of Australia’s budget position since the pre-election…
The federal government has come under increasing pressure to lower the GST threshold for online purchases as sales continue to rise and revenue continues to be lost. AAP/Alan Porritt

States’ push for GST on online shopping is just small change

Both Labor and Coalition states are pushing the federal government to extend the GST to more online purchases as they look for additional sources of revenue. And while the Coalition had promised no changes…
The economic costings from both parties rely on wildly optimistic PEFO figures. AAP

Electoral promises of both parties hang on precarious PEFO forecasts

The economic promises of both the Coalition and the ALP rely on two “big taxes”: the mining tax and the carbon tax. This week, the Coalition revealed what it believes it will save from abolishing them…

Subsidies to lower living standards

Proposals by the two main political parties to provide selected subsidies to particular regions and industries, unless justified to correct a market failure, are a quick way to reduce productivity and…
Governments have been increasing expenditure, despite shrinking tax revenues. But our structural deficit is unsustainable and must be tackled. Image sourced from www.shutterstock.com

Federal Budget 2013: Why our unsustainable structural deficit must be tackled

All Australian governments, and ultimately all Australians, are faced with making tough decisions in their budgets. Without significant reductions in government expenditures and the services they provide…
The Gillard government’s changes to the tax treatment of superannuation make for a more complex system, rather than a more equitable one. AAP

Illogical tax tinkering won’t lead to a sustainable super system

Today, the Australian government announced additional taxation of high income funds in the decumulation or retirement stage of investments in superannuation. Arguably, the changes add more to complexity…
The mining tax is fraught with significant design issues. But can it be fixed? AAP

Reforming the mining tax: is it possible?

The Commonwealth government’s mining tax, the minerals resource rent tax (MRRT), has been a continuing source of controversy. It is easy to point to its significant problems, but a considerable challenge…
External economic pressures, including a high Australian dollar, will pose challenges for the Napthine government. AAP

Flat economy will continue to challenge the Victorian government

The last two years for Victorians and the Baillieu government have been challenging, with a flat economy and tight budget constraints. The next few years for the Napthine government are likely to involve…
Researchers say labour capacity is being reduced during hot months as a result of climate change. AAP/Kimimasa Mayama

Climate change linked to declines in labour productivity

Increases in humidity caused as a result of climate change are reducing labour productivity and it’s only likely to get worse over time, argue researchers from America’s National Oceanic and Atmospheric…
The case for significant, productivity-enhancing tax reform has been made by the Henry Review - but the challenge will be for meaningful reform not to swallowed by pre-election noise. AAP

Chance for meaningful tax reform recedes in looming election hue and cry

Reform of Australia’s taxation system has to be high on the agenda to raise national productivity, for greater simplicity, and to improve equity. However, because of the magnitude of the challenges to…
The GST is off-limits for both political parties, but a restructure could result in an increase in national productivity and incomes. Image from www.shutterstock.com

Reforming GST is the key to productivity growth

With appropriate investment in design and explanation, a larger GST reform package could be one of the most effective and easiest options to help reverse Australia’s lagging productivity growth. Changes…
Some retailers want a GST applied to all goods Australians buy from overseas, but experts say it would cost too much to implement. AAP

New GST for online shoppers unlikely, experts say

A GST on imported goods valued under $1000 is unlikely say tax experts, despite a government taskforce suggesting “in principle” grounds for it. The Low Value Parcel Processing Taskforce yesterday released…
There are economy-wide gains to be made from lowering the corporate tax rate, but businesses will need to make concessions of their own. Image from www.shutterstock.com

Subsidies are standing in the way of corporate tax reform

Yesterday, the government’s business tax working group released its discussion paper on possibilities for tax reform. The paper makes a case for a broader base and lower tax rate (the corporate tax is…
If the government is serious about maintaining its economic prosperity into the future, it needs to address Australia’s historically poor productivity growth. Ann Douglas

Australia’s productivity problem: why it matters

The majority of Australians would prefer higher living standards. This can take the form of better access to better healthcare services and education, better environmental outcomes, more time for friends…
The two major parties have taken different approaches to compensating households for the carbon tax. Jonas B

The carbon tax, compensation and households: a two‑party comparison

The two main political parties agree to reduce greenhouse gas emissions by 2020 to 5% below the 2000 level, or about a 20% reduction below business as usual. However, they propose very different policy…
Improving the transparency and evaluation of major infrastructure projects is one way to increase productivity. AAP

Budget provides a chance to carve out the path to higher productivity

Productivity growth results in more valued output per unit of production input, or the same output for fewer inputs. Growth of productivity requires changes involving the adoption of new technology, better…
Is it time to reform the GST? AAP

Tax forum: GST needs changing, so let’s debate it

While changes to the GST are not an explicit item on the Tax Forum agenda, they should be and the issue will arise anyway. A broad and comprehensive GST tax base along the lines of the New Zealand model…

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