Incoming Feed Items

Oil and gas extraction in South Australia employs just 833 people, 0.1% of SA jobs. Petroleum royalties make up 0.4% of the state budget. On oil and gas production worth $1.7 billion in 2021-22, the industry paid at most $99 million in federal tax, of which Santos paid zero.

Despite this, the industry has significant influence in the state.

The post The oil and gas industry in South Australia appeared first on The Australia Institute.

Will the government’s political finance reforms keep vested interests out of politics or ensure the major parties dominate Australia’s political landscape? Could South Australia’s proposed political donations ban become a model for the rest of the country? And what home-grown innovations have insulated Australia from some of the democratic backsliding seen in the United States? On this episode of Follow the Money, the Australia Institute’s Democracy & Accountability Director Bill Browne joins Ebony Bennett to discuss political finance reform.

This discussion was recorded on Tuesday 2 July 2024 and things may have changed since recording.

Guest: Bill Browne, Director, Democracy & Accountability program, the Australia Institute // @Browne90

Host: Ebony Bennett, Deputy Director, the Australia Institute // @ebony_bennett

Show notes:

Principles for fair political finance reform by Bill Browne, The Australia Institute (August 2023)

The Coalition’s proposed divestiture powers to break up major hardware and grocery retailers could help keep inflation down and assist with cost-of-living pressures.

“The introduction of divestiture laws is a sensible tool to stop large companies like Woolworths and Coles misusing their market power. It would be good for prices at the checkout and help keep inflation down,” said Matt Grudnoff, Senior Economist at the Australia Institute.

“Research from the Australia Institute’s Centre for Future Work, released at the beginning of 2023, showed that corporate profits, not wages, were the major driver of the burst of inflation in Australia that followed the Covid lockdowns.

“The Australian economy has become less competitive over the last few decades and these laws would go some way to addressing that structural imbalance.

“Our current competition laws have few ways of making an already uncompetitive industry more competitive.

“Divestiture powers will enable the government to break up large businesses abusing their market power and force them to compete, leading to lower prices and better service for consumers.

“In other economies, including the UK and the US, broad ranging divestiture powers are already in place. If adopted in Australia, these new powers would just bring us into line with other OECD countries.”

Marco Del Negro, Keshav Dogra, Pranay Gundam, Donggyu Lee, and Brian Pacula

What does the release of Julian Assange reveal about the Australia-US relationship? And is Trump’s authoritarian behaviour really an outlier in American political history?

On the first episode of After America, Dr Emma Shortis reflects on the first presidential debate performance and the release of Julian Assange, before former BBC United States correspondent Nick Bryant joins the show to discuss the country’s long history of authoritarianism.

This discussion was recorded on Tuesday 25 June and Monday 1 July 2024 and things may have changed since recording.

australiainstitute.org.au // @theausinstitute

Guest: Nick Bryant, former BBC correspondent and author of The Forever War: America’s Unending Conflict with Itself // @NickBryantNY

Host: Emma Shortis, Senior Research for International & Security Affairs, the Australia Institute // @EmmaShortis

Show notes:

The Forever War: America’s Unending Conflict with Itself by Nick Bryant (June 2024)

Guillaume Roussellet

The changes coming into effect from today – under the federal government’s Closing Loopholes Act – guarantee the rights of volunteer union delegates to represent workers and paid training leave.

The Centre for Future Work’s Carmichael Centre analysis found employees wanted their union to cooperate with employers and vice versa, and that giving workplace delegates a greater voice made this more likely.

“Those who claim that guaranteeing the rights of union delegates must lead to greater conflict are dead wrong,” said Professor David Peetz, research fellow and author of Employee voice and new rights for workplace union delegates.

“Workers expect their union and employer to cooperate effectively to solve problems, and reach agreements over pay and conditions, in both parties’ mutual interests.

“Well trained delegates are best-placed to represent workers. They don’t acquiesce but they do cooperate. After all, they know it’s in workers’ interests for workplace productivity to rise.”

The paper found this could help boost productivity, which on average was at least as high in unionised as in non-union workplaces. Strong representation and consultation made workers less resistant to productivity-boosting technology including artificial intelligence.

In the past, many volunteer union delegates have been obstructed from properly doing their job to allow employees’ voices to be heard in the workplace. Now, their rights will be guaranteed.

Some employers have actively placed barriers in the way of volunteer union delegates and paid officials. One study in the early 2000s found that 23% of delegates found management
hostile, while 22% of delegates reported that management opposition to their role as a delegate had become more intense over the previous two years. Examples from various case studies, including court and industrial cases, illustrate some of the ways in which that minority of employers from workplaces with delegates expressed their hostility towards unionism and their opposition to delegates, including by placing barriers in the way of workplace union activists and delegates.

The new regime of workplace delegates’ rights is very likely, overall, to increase the voice of employees, and thereby have positive consequences, over the long run, for pay and conditions, union membership, workplace cooperation, grievance resolution and productivity. However, the effects of new rights for paid union training leave depend very much on union responses, in particular on their subsequent reliance on classroom versus informal training and the ‘follow up’ of classroom education.

The post Employee voice and new rights for workplace union delegates appeared first on The Australia Institute.

Rajashri Chakrabarti, Natalia Emanuel, and Ben Lahey 

The latest inflation figures that saw annual inflation rise from 3.6% to 4.0% in May have caused some economists and commentators to argue the Reserve Bank needs to raise interest rates.  However new data from the Department of Employment and Workplace Relations on enterprise agreements shows yet again that wage growth and increased income are not fueling inflation and thus an interest rate rise would do more harm than good.

In the first three months of this year, 1,022 enterprise agreements were approved by the Fair Work Commissions covering some 365,000 employees. Across all these employees the average annual wage growth of the agreements was 3.9%, down from 4.4% in the last three months of 2023.

Among private sector workers, the average agreed annual wage rise fell from 3.9% to 3.6% – a rate in line with the 3.6% annual inflation in the first three months of 2024.

The figures demonstrate yet again that wage growth has not driven inflation. Indeed a rate of 3.6% would see workers’ real wage fall after taxation and interaction with entitlements.

The Federal Government has no official definition or measure for tracking and reporting on national poverty levels.

Key findings:

• Four in five Australians (83%) want the Federal Government to regularly measure and report on poverty rates in Australia.
• An overwhelming majority of Australians (81%) agree that income support payments should be set at a rate that does not cause any child to live in poverty.
• Australians are highly concerned that Australia has a high child poverty rate compared to other developed countries (69%), and about the effects of this on health and lifespan (83%) as well as education and employment (85%).
• One in six Australian children (about 761,000 children) live in poverty according to research from ACOSS and UNSW.
• The OECD finds that Australia’s youth poverty rate is the 13th-highest among member nations, surpassing the UK, Germany and Canada.

“There is no excuse for a country as rich as Australia to have one in six children growing up in poverty,” said Greg Jericho, Chief Economist at the Australia Institute.

“Adopting an official definition of poverty in line with the OECD or European Union – either half or 60 per cent of median income – would provide important information to inform government policy and would allow public oversight to keep elected representatives accountable.

Poverty has long-lasting and insidious impacts on a child’s health and well-being and can affect their schooling and employment opportunities throughout their entire lifetime. Given that the low rate of income support payments keeps many families in poverty, reducing child poverty is not inherently complicated. During the COVID-19 pandemic, the Australian Government managed to lift 650,000 Australians, including children, out of poverty overnight by supplementing existing income support payments.

The Australia Institute recently conducted polling to determine community attitudes towards child poverty in Australia. This polling found that respondents were overwhelmingly supportive of government measures to reduce child poverty, including:

With emissions reduction efforts stalled and energy bills spiking, why is Australia’s political class talking about nuclear plants that wouldn’t be ready for decades? On this episode of Dollars & Sense, Greg Jericho addresses the Coalition’s nuclear ‘nothingburger’ and what’s happening in Australia’s decarbonisation process.

Greg Jericho is Chief Economist at the Australia Institute and the Centre for Future Work and popular columnist of Grogonomics with Guardian Australia. Each week on Dollars & Sense, Greg dives into the latest economic figures to explain what they can tell us about what’s happening in the economy, how it will impact you and where things are headed.

Host: Greg Jericho, Chief Economist, the Australia Institute and Centre for Future Work // @GrogsGamut

Host: Elinor Johnston-Leek, Senior Content Producer, the Australia Institute // @ElinorJ_L

Theme music: Blue Dot Sessions

Sebastian Heise and Ayşegül Şahin

Viral V. Acharya, Nicola Cetorelli, and Bruce Tuckman

Viral V. Acharya, Nicola Cetorelli, and Bruce Tuckman

Viral V. Acharya, Nicola Cetorelli, and Bruce Tuckman

Traditional approaches to financial sector regulation view banks and nonbank financial institutions (NBFIs) as substitutes, one inside and the other outside the perimeter of prudential regulation, with the growth of one implying the shrinking of the other. In this post, we argue instead that banks and NBFIs are better described as intimately interconnected, with NBFIs being especially dependent on banks both for term loans and lines of credit.

Are NBFIs Separate from Banks?

The chart below documents the rapid and relentless growth of NBFIs as their assets have outgrown those of banks, especially in the most recent decade.

Marco Del Negro, Pranay Gundam, Donggyu Lee, Ramya Nallamotu, and Brian Pacula

Olivier Armantier

One of the core responsibilities of central banks is to act as “lender of last resort” to the financial system. In the U.S., the Federal Reserve has been operating as a lender of last resort through its “discount window” (DW) for more than a century. Historically, however, the DW has been plagued by stigma—banks’ reluctance to use the DW, even for benign reasons, out of concerns that it could be interpreted as a sign of financial weakness. In this post, we report on new research showing that once a DW facility is stigmatized, removing that stigma is difficult.

Kasey Chatterji-Len and Anna Kovner

Patrick Douglass, Linda S. Goldberg, and Oliver Z. Hannaoui

Editor’s note: Since this post was first published, the note on the final chart has been corrected to reflect that, as depicted, gold shares are calculated based on national valuation (June 3, 2024, 9:00 am), and the text has been edited to clarify where the analysis refers to the authors’ sample (June 12, 2024, 1:29 pm).

Ken Armstrong, Asani Sarkar, and Leslie Conner Warren

Rajashri Chakrabarti, Dan Garcia, and Maxim Pinkovskiy

Nina Boyarchenko and Leonardo Elias

Firms’ access to credit is a crucial determinant of their investment, employment, and overall growth decisions. While we usually think of their ability to borrow as determined by aggregate credit conditions, in reality firms have a number of markets where they can borrow, and conditions can vary across those markets. In this post, we investigate how the composition of debt instruments on U.S. firms’ balance sheets has evolved over the last twenty years. 

Jaison R. Abel and Richard Deitz 

Martín Almuzara, Babur Kocaoglu, and Argia Sbordone

Jacob Weber

Andrew F. Haughwout, Donghoon Lee, Daniel Mangrum, Joelle Scally, Wilbert van der Klaauw, and Crystal Wang

Editor’s note: Since this post was first published, the aggregate credit card utilization rate cited in the second paragraph has been corrected. (May 14, 12:05pm). The percentage of Gen Z credit card users who are “maxed-out” has been corrected in the text and now matches the table. (May 15, 2024, 4:00 pm)

Gara Afonso, Gonzalo Cisternas, and Will Riordan  

A recent Liberty Street Economics post discussed who is borrowing and lending in the federal funds (fed funds) market. This post explores activity in two other markets for short-term bank liabilities that are often perceived as close substitutes for fed funds—the markets for Eurodollars and “selected deposits.” 

Felix Aidala, Gizem Kosar, and Wilbert van der Klaauw

One of the most striking features of the labor market recovery following the pandemic recession has been the surge in quits from 2021 to mid-2023. This surge, often referred to as the Great Resignation, or the Great Reshuffle, was uncommonly large for an economic expansion. In this post, we call attention to a related labor market change that has not been previously highlighted—a persistent change in retirement expectations, with workers reporting much lower expectations of working full-time beyond ages 62 and 67. This decline is particularly notable for female workers and lower-income workers.

Andrew Haughwout, Donghoon Lee, Daniel Mangrum, Belicia Rodriguez, Joelle Scally, and Wilbert van der Klaauw 

Jaison R. Abel, Richard Deitz, Jonathan Hastings, and Joelle Scally

Felix Aidala, Andrew Haughwout, Ben Hyman, Jason Somerville, and Wilbert van der Klaauw

Who will benefit most from the Coalition’s new nuclear energy plan? And why does the media fall into the trap of covering it like genuine policy? On this episode of Follow the Money, the Australia Institute’s Dr Matt Ryan and Rod Campbell discuss the Coalition’s nuclear announcement and the cost of Australia’s failure to decarbonise.

This discussion was recorded on Tuesday 25 June 2024 and things may have changed since recording.

Guest: Matt Ryan, Postdoctoral Research Fellow, the Australia Institute // @mattdjryan

Guest: Roderick Campbell, Research Director, the Australia Institute // @R_o_d_C

Host: Ebony Bennett, Deputy Director, the Australia Institute // @ebony_bennett

Theme music: Pulse and Thrum; additional music by Blue Dot Sessions

The Australia Institute surveyed a nationally representative sample of 1,005 Australians about the prosecution of Julian Assange.

Respondents were asked if they think the Federal Government is doing too much or too little to secure the release of Australian citizen Julian Assange.

• One in three Australians (34%) think that the Federal Government is doing too little to secure the release of Julian Assange, the single most popular choice.
• Australians are more likely to answer “Don’t know / Not sure” (31%) than that the Federal Government is doing the right amount (24%) or too much (11%).
• Three times as many Australians think the Federal Government is doing too little to secure the release of Assange as think it is doing too much (34% vs 11%).
• Labor voters are as likely as Australians overall to think that the Federal Government is doing too little to secure the release of Assange (33% vs 34%).
• The single most popular response among Labor, Coalition, Greens and One Nation voters is that the Federal Government is doing too little.

The post Polling – Prosecution of Assange appeared first on The Australia Institute.

“To have that message then sitting alongside the pursuit of an Australian publisher for the publication of information that embarrassed the United States, really became irreconcilable and I think exposed some of the hypocrisy of that relationship and of the United States in particular.”

– International & Security Affairs Senior Researcher Dr Emma Shortis

The post What Assange means for the AUS/US relationship – Dr Emma Shortis on ABC News | Video appeared first on The Australia Institute.