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On this episode of Follow the Money, Greg Jericho and Matt Grudnoff join Ebony Bennett to discuss the latest GDP figures, the real drivers of inflation and how the Reserve Bank misread the state of the economy.

This discussion was recorded on Tuesday 10 September 2024 and things may have changed since recording.

Guest: Greg Jericho, Chief Economist, the Australia Institute // @GrogsGamut

Guest: Matt Grudnoff, Senior Economist, the Australia Institute // @MattGrudnoff

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

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

We’d love to hear your feedback on this series, so send in your questions, comments or suggestions for future episodes to podcasts@australiainstitute.org.au.

Last year the government announced it was considering removing its statutory power to overrule the Reserve Bank. Thankfully it has now reconsidered that move, and the actions of the RBA over the past year serve to remind everyone that it is far from infallible.

In its May Statement on Monetary Policy the RBA looked ahead one month and estimated that in June the annual growth of household consumption would be 1.1%. When the national accounts were released last week, the actual growth was revealed to be just 0.5%.

Now obviously economic forecasting is a bit of a mugs game, but household consumption makes up half of Australia’s economy and accounted for around 45% of all the growth in the economy over the past decade so it is pretty important. It is also the area of the economy most directly affected by interest rate rises. This error of forecasting suggests that the Reserve Bank has rather poorly misread just how greatly households had been impacted by the 13 rate rises that had taken the cash rate from 0.1% in April 2022 to 4.35% in November 2023.

This error is crucial because the main reason the RBA raises rates is to reduce the ability of households to spend. Because you can’t tell your bank that you don’t really feel like paying your mortgage this month, interest rate rises force households to divert money that would have been spent on goods and services to paying your mortgage.

In 2022, the government legislated Australia’s emissions reduction targets, “Australia’s greenhouse gas emissions reduction targets of a 43% reduction from 2005 levels by 2030 and net zero by 2050.”

The Australian Government claims that Australia’s domestic emissions have fallen by 29% since 2005.

This claim suggests that Australia is well on its way to meeting its domestic emissions reduction target under the Paris Agreement, even as the Australian Government subsidises and approves fossil fuel expansion.

But Australia is not actually decarbonising its economy and domestic fossil fuel emissions across the economy have changed very little under the Albanese Government (or previous governments).

Industry emissions (including stationary energy, fugitive emissions, and industrial processes) increased by 3% over the year 2023 while transport emissions also increased by 5%.

So how can Australia claim it is decarbonising when it is not?

On this episode of After America, Dr Emma Shortis and Alice Grundy reflect on the presidential campaign so far and on the dynamics of the Australia-United States relationship ahead of the third anniversary of the AUKUS deal.

This discussion was recorded on Friday 6 September 2024 and things may have changed since recording.

Join our webinar with Nick Bryant, former BBC United States correspondent and author of The Forever War, at 11am AEST on Thursday 12 September. Tickets are free, but registration is essential.

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

Host: Alice Grundy, Research Manager, Anne Kantor Fellows, the Australia Institute // @alicekgt

Show notes:

‘Is America ready to elect a Black woman president?’  by Emma Shortis, The Conversation (September 2024)

Theme music: Blue Dot Sessions

The Fuel Tax Credits Scheme should be scrapped for the mining industry, not farmers, the Australia Institute has said in response to calls at today’s National Farmer Rally to keep the tax rebate for the agricultural industry.

On this episode of Dollars & Sense, Greg and Elinor discuss the latest GDP growth figures, how rate increases have damaged the economy and what might come next.

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

Show notes:

‘Now the Australian economy is on its knees, will the RBA finally start cutting interest rates?’ by Greg Jericho, Guardian Australia (September 2024)

Plans to import LNG to Australia reveal the extraordinary failure of consecutive Australian governments to stand up to multinational gas corporations, the Australia Institute has said.

Key Points:

• Australia is one of the biggest exporters of gas in the world, alongside Qatar.
• Around 80% of Australia’s gas is exported as liquefied natural gas (LNG).
• Over half (56%) of gas exported from Australia attracts zero royalty payments, effectively giving a public resource to multinational corporations for free.
• Across the country, gas and oil extraction employs just 21,200 workers — less than half of one percent (0.15%) of the 14 million people employed in Australia

“This is pure farce,” said Rod Campbell, Research Director at the Australia Institute.

“We produce, burn and export a staggering amount of gas in this country. The gas industry itself is the biggest user of gas in Australia due to the gas it burns to process LNG exports. To suggest there is a shortage is absurd.

“The fact of the matter is that we have allowed multinational gas companies to take us for a ride by giving away our resources tax free and locking us into unsustainable export contracts.

“When facing a genuine resource shortage, the usual first step is to reduce usage, but that is far from what’s happening here.

“Heavily subsidised multinational corporations have been driving up the cost of gas in Australia by forcing us to bid against the international market for our own resources.

A significant proportion of young Australians say attending live music is important to them, but rising costs are a major barrier to young peoples’ attendance at live music, a first-of-its-kind national survey conducted by The Australia Institute and commissioned by The Push has found.

As the live music industry in Australia continues to struggle financially, the survey found there is strong support among young Australians for policies that would both support the sector and encourage more young people to engage with live music events.

The Australia Institute, commissioned by The Push, surveyed 1,009 Australians between the age of 16 and 25 between 9 and 15 August 2024. The survey has a margin of error of plus or minus 3%.

GDP growth figures released today show the economy almost grinding to a halt. The economy grew by only 0.2% for the quarter and just 1% over the last year. The release of these GDP figures shows that the Reserve Bank is wrong when it says, “the economy is running a bit hot” and it is time to start cutting interest rates.

The only reason the economy has seen any growth is because of the contribution of government spending. Without this contribution the economy would have shrunk by 0.2% this quarter. Worst still, without the government’s contribution the economy wouldn’t have grown at all over the last year.

This highlights just how weak the private sector is right now. Household spending is down. Business investment is down. The private sector has been smashed by the rapid rise in interest rates, demand has dried up and production is grinding to a halt.

The current economic conditions highlight how close the Australian economy is to recession and how damaging high interest rates have been to the economy. With inflation falling in Australia and around the world it is time for the Reserve Bank to follow other central banks and cut interest rates.

The post Public spending keeps the economy going as the private sector is hit by rate rises appeared first on The Australia Institute.

Today’s national account figures show that GDP per capita fell by 0.4% during the June quarter. This is the 6th consecutive quarter of negative GDP per capita growth, showing that Australia is in a per capita recession amid an ongoing inequality crisis.

Key Points:

• GDP per capita growth of –0.4% represents the 6th consecutive quarter of negative per capita growth in Australia while total GDP growth of 0.2% is historically weak.
• Household consumption fell by 0.2%, the weakest growth rate since the COVID-19 lockdowns in the September quarter of 2021.
• Government expenditure contributed 0.3% to GDP growth.
• Interest rates are a blunt instrument that are causing normal Australians significant financial pain while the tax system is turbocharging wealth inequality.

“Today’s figures show that Australia’s economy has gone backwards for a record six consecutive quarters once you take into account population growth,” said Greg Jericho, Chief Economist at The Australia Institute.

“They confirm that households have been smashed by high interest rates despite our research showing that inflation has been mostly driven by company profits and supply-side factors. Fortunately, government spending has helped stop the economy from shrinking.

“Today’s figures highlight again how necessary the change to the Stage 3 tax cuts were, which will deliver some much-needed relief to low- and middle-income households rather than overwhelmingly benefit the rich.

On this episode of Follow the Money, Ebony Bennett discusses the latest in federal politics with Professor Mark Kenny, former Chief Political Correspondent for The Sydney Morning Herald, The Age and The Canberra Times.

This discussion was recorded on Tuesday 3 September 2024 and things may have changed since recording.

Guest: Mark Kenny, Director, ANU Australian Studies Institute // @markgkenny

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

Show notes:

‘The PM can ill-afford bad weeks as narratives harden’ by Mark Kenny, The Canberra Times (September 2024)

Public spending keeps the economy going as the private sector is hit by rate rises by Matt Grudnoff, The Australia Institute (September 2024)

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

Repeat delays are testament to how fiendishly difficult it is to get changes to electoral law right. The most recent delay has been attributed to constitutional concerns: how to design laws that limit political finance without violating freedom of political expression, which is protected by the constitution.

The High Court has reined in legislative overreach, and may get another chance to do so: last month former state independent candidates wrote to Premier Jacinta Allan arguing the carveout in Victoria’s political donation laws for the major parties’ funding vehicles is unconstitutional. Victoria introduced strict donations caps ahead of the last election. There were three independent MPs in the state’s lower house. After the election, none remained.

Only in politics does the winning team get to change the rules of the game. The risk is that MPs may vote to skew the electoral system to their own benefit, at the expense of a level playing field.
The Albanese government has given some clues of its plans, including a cap on donations, and a cap on spending of somewhat less than $1 million per candidate. One million dollars sounds like an eyewatering sum, but putting up a viable challenge to a sitting MP does not come cheap. The Australia Institute calculates each MP enjoys almost $3 million in incumbency advantages, plus non-financial benefits.

Republicans have tried to pin the Vice-President as ‘Comrade Kamala’, but are her economic policies all that radical? On this special After America and Dollars & Sense crossover episode, Dr Emma Shortis and Dr Greg Jericho discuss Harris’ economic agenda.

This discussion was recorded on Friday 30 August 2024 and things may have changed since recording.

Register for our webinar with Nick Bryant on Thursday 12 September via the Australia Institute website.

Guest: Greg Jericho, Chief Economist, the Australia Institute // @GrogsGamut

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

Show notes:

Dollars & Sense, the Australia Institute

Theme music: Blue Dot Sessions

Peter Dutton and Donald Trump have a knack for political division. There’s no doubt that stoking fear and the politics of division can be brutally effective, but the last thing Australia needs is to import the damaging culture wars of the American far right, dominated by bonkers conspiracy theories adhered to by militant acolytes untroubled by reality.

Trump vowed to conduct ‘ideological screenings’ and to bar refugees from Gaza if he wins the Presidency and he’s also said he will bring back his controversial ‘Muslim ban’ on immigration. Similarly, Dutton has been echoing Trump’s call to ban refugees from Gaza, arguing that accepting people coming from Gaza is a national security risk. Zali Steggall described the policy as ‘inherently racist’ and this week Treasurer Jim Chalmers said: “[Dutton] divides deliberately, almost pathologically, and that sort of division in our leadership, in our society, right now is worse than disappointing — it’s dangerous.”

On this episode of Dollars & Sense, Greg and Elinor discuss the Greens’ ‘Robin Hood’ tax proposal, post-pandemic profits and the latest inflation data.

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

Show notes:

‘Unemployment is rising and Australia’s economy is weak – but don’t hit the recession alarm just yet’ by Greg Jericho, Guardian Australia (August 2024)

The media industry has changed radically over the last three decades, transformed by the 24-hour news cycle, social media and the tech giants, and now artificial intelligence. On this special episode of Follow the Money, recorded live at Politics in the Pub in Canberra, Minister Ed Husic, Senator Sarah Hanson-Young and Karen Percy from the Media, Entertainment & Arts Alliance (MEAA) discuss technology, trust and the future of journalism.

This discussion was recorded live on Wednesday 21 August 2024 and things may have changed since recording.

Guest: The Hon Ed Husic MP, Minister for Industry and Science

Guest: Senator Sarah Hanson-Young, Greens Arts & Communications spokesperson // @sarahinthesen8

Guest: Karen Percy, Federal President (Media), Media, Entertainment & Arts Alliance (MEAA) // @PercyKaren

Host: Richard Denniss, Executive Director, the Australia Institute // @RDNS_TAI

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

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

This week the Pacific Islands Forum meeting in Tonga will see leaders from the region address the dramatic impact of climate change and the urgent need to reduce emissions. It is an important moment for the Australian government to reject the lies of the gas industry and acknowledge that approving more gas will ruin the livelihood of the millions living in the Pacific Islands.

Gas is a massive contributor to greenhouse gas emissions (the clue is in the name!) that cause climate change. And given the world has just experienced 13 straight months of record setting temperatures, it is brutally clear that we need to reduce emissions quickly and with much greater urgency than has been the case over the past decade. But reducing emissions is not compatible with gas company profits, so gas companies and their boosters in the media routinely bring out a scare of gas shortages and with it calls for more gas.

Australians have gone through another winter without running out of gas despite being told earlier this year that a gas shortage was very much on the cards. And so of course now the gas industry is warning that a gas shortage could still occur because… well… because the gas industry knows that the only way it can justify demanding the government approve new gas mines is if people think we are about to run out.

ABC journalist and podcaster Matthew Bevan joins Dr Emma Shortis on this After America to discuss the Democratic National Convention and Trump’s to set the agenda.

This discussion was recorded on Monday 26 August 2024 and things may have changed since recording.

Guest: Matthew Bevan, host and writer of If You’re Listening, the ABC // @MatthewBevan

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

Show notes:

‘Harris delivers warm and strong acceptance speech as Democrats take joy, hope and renewal to the electorate’ by Emma Shortis, The Conversation (August 2024)

Theme music: Blue Dot Sessions

One of the most regular and biggest scare campaigns Australians are subjected to is that Australia is about to run out of gas – that households will not be able to run heaters in winter or the light will go out in summer and the air conditioners will stop working because there will be no gas to power the electricity.

These warnings are increasingly shrill. In March for example The Australian newspaper warned that “Urgent action needed if Australia is to avoid catastrophic gas shortfall”. Despite getting through winter without a catastrophe this morning The Australian newspaper is now warning, that a “Perfect storm’ warning” has been issued to Australia’s east coast energy market.

It is all balderdash.

Australia digs up and exports a lot of gas. A really, really large amount. How much? Try 82,000,000 tonnes of the stuff each year. That is the 2nd largest amount of LNG production in the world, suggesting we are pretty good at it. But all that gas ends up as global greenhouse gas emissions and we’re meant to be reducing emissions.

For over two years now it has been clear that profits have been the main culprit of inflation, and that wages have not driven prices despite repeated warnings from the Reserve Bank and business groups that a wages breakout could be about to come and start a mythical “wage-price spiral”

The latest data on wage growth in Enterprise Agreements from the Fair Work Commission (FWC) is just the latest evidence that reveals how wrong those spreading a fear campaign about wages have been.

In the 3 months to 26 July this year, the 3 month weighted average of annual wage growth in enterprise agreements lodged with the FWC was 3.7% – down from a peak of 4.3% in October 2023. The last time the average was this low was in August last year. Importantly the 3.7% growth is lower than the most recent annual inflation figure of 3.8%.

While business groups and conservative media outlets continue to argue that wage growth is keeping inflation high, in reality – as has been the case for the past 2 years – wages are not driving inflation, indeed they are lowering it.

While the intention to reduce the influence of corporate political donations is welcome, the proposed legislation would disproportionately advantage incumbent parties, including enormous increases in public funding, much of which could be spent on election campaigning.

The Australia Institute’s submission to the government consultation into the Bill finds that:

On this episode of Dollars & Sense, Greg and Elinor get out the world’s tiniest violin for Australia’s big banks, who are finally having to compete to offer better mortgage rates, and discuss why three of the ‘big four’ are now offering less for term deposits.

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 // @GrogsGamut

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

Theme music: Blue Dot Sessions

We’re told it’s a cost-of-living crisis, but not everyone is feeling the pinch. New Australia Institute research shows that the ultra-rich are getting richer, thanks in part to Australia’s distorted tax system. On this episode of Follow the Money, Dr Richard Denniss and Dave Richardson join Dr Alice Grundy to discuss the growing problem of inequality and what we can do to fix it.

This discussion was recorded on Tuesday 20 August 2024 and things may have changed since recording.

Guest: Richard Denniss, Executive Director, the Australia Institute // @RDNS_TAI

Guest: David Richardson, Senior Research Fellow, the Australia Institute // @daverr01

Host: Alice Grundy, Anne Kantor Research Manager, the Australia Institute // @alicektg

Show notes:

Wealth and inequality in Australia by David Richardson and Frank Stilwell, the Australia Institute (August 2024)

‘The Morrison election: What we know now’ by Richard Denniss, The Monthly (June 2019)

The billboards explain that major gas companies in the NT pay no royalties or petroleum resources tax, and that NT drivers contribute 30 times more in vehicle registration to NT Government revenue than the gas industry.

Key Points:

• Australia Institute research has found over the last four years, multinational companies made $149 billion exporting gas they got for free, including $37 billion from the NT. If royalties had been charged on this gas, at least $13.3 billion ($3.4 billion from NT) in revenue could have been raised.
• Reasons provided by Darwin Airport to not run the advertisements include that they were:
  • Negative in nature.
  • Political in nature.
  • Directed at other clients of Darwin Airport advertising services.
• Similar billboards in other jurisdictions, such as Western Australia, have been accepted as legitimate advertising.

“Democracies function best when the public is well-informed, and this becomes a challenge when private companies are deciding what information people can see,” said Richard Denniss, Executive Director of the Australia Institute.

“I think most people would be surprised to learn that vehicle registrations contribute far more to Northern Territory Government revenue than the gas industry, but the reason they’re surprised to hear it is because, as we’ve seen, there are barriers to sharing this type of information in public places like airports.

While the gas industry has been busy trying to tell you that we need more gas, we’ve been busy countering their spin with facts, especially in Western Australia and the Northern Territory.

However, not everyone is as enthusiastic as we are for the message to get out.

A billboard too far?

We wanted to let the people of the Northern Territory know the facts about gas, so we designed this billboard and tried to put it up at Darwin airport.

The Airport refused our business saying it was “negative” and “directed at one of its clients”.

No worries, we’ll leave Santos out of this.

We came back with this design.

On this episode of After America, political scientist Associate Professor Zim Nwokora joins Dr Emma Shortis to discuss the DNC and the Trump campaign’s failure to cut through against a new Democratic candidate.

This discussion was recorded on Friday 16 August 2024 and things may have changed since recording.

Guest: Zim Nwokora, Associate Professor, Deakin University

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

Show notes:

‘Sweet home, Chicago: the Democrats return to the site of their most tumultuous convention. This time, they are united’ by Emma Shortis and Liam Byrne, The Conversation (August 2024)

Theme music: Blue Dot Sessions

This would see products like period underwear and tampon inserters placed in the same category as vapes, gambling and gaming PCs.

This isn’t the first time federal policy has made menstrual products harder to afford.

People who menstruate, most of whom are women, fought for nearly two decades for the goods and services tax (GST) to be removed from sanitary products such as tampons. The campaign lasted from before the GST was introduced in the year 2000, all the way up until 2018, when state and federal governments finally agreed to act.

The decision to exempt sanitary products cost the budget $30 million.

This might sound like a lot of money, but in budgetary terms, it’s next to nothing.

By way of comparison, tax breaks for luxury utes cost Australians $250 million last year, according to recent research by The Australia Institute.

While car sales data is not broken down by gender, few would contest that this tax break is mainly enjoyed by men.

And not just any men. The tax break only applies to new vehicles that cost over $80,000. Some of these utes cost up to $250,000, so we’re talking about very rich men.

There is widespread public support for banning gambling advertisements on free-to-air media because of the harm caused by gambling. The main objection is that Australia’s free-to-air networks, hit by declining revenues and fragmenting audiences, can’t afford to lose the money.

But there’s a simple solution.

A small levy on the many billions of dollars gambling companies extract from Australians could compensate the media for the lost revenue – with enough left over to increase funding for the ABC.

Such a levy would cost the gambling industry less than a quarter of a billion dollars a year.

That’s a tiny fraction of the money lost on wagering.

Each year, losing bets cost Australians about $25 billion dollars, according to the Australian Institute of Health and Welfare and the Australian Gambling Research Centre.

That doesn’t include the cost to society of problem gambling, which feeds addiction and mental health problems.

According to the Australian Bureau of Statistics, gambling company revenues totalled $17.2 billion dollars in 2022-23.

Meanwhile, the industry spent about $239 million advertising on free-to-air TV, metropolitan radio, and online.

Key Points:

• Gambling company revenues totalled $17.2 billion dollars in 2022-23.
• Meanwhile, the industry spent about $239 million advertising on free-to-air TV, metropolitan radio, and online.
• Therefore, a levy on gambling revenues of just 1.4% could replace all that lost advertising income.
  • Round it up to 2% and the government could replace some of the money the ABC has lost in budget cuts as well.

“Politically, this policy is definitely worth a punt, with good odds that it would be a vote-winner,” said Stephen Long, Senior Fellow at the Australia Institute.

“A 2% levy on the gambling industry, which represents a tiny fraction of the money lost on wagering, could compensate the media for any lost revenue resulting from a gambling ads ban. There would even be enough left over to replace some of the money that the ABC has lost in budget cuts as well.

“For the media and the Australian public, this represents a rare win-win scenario.

“Implementing such a policy would reduce the harm to the community that gambling advertising causes, while simultaneously guaranteeing a revenue stream for public interest broadcasting.

“The free-to-air networks could then sell the advertising slots the gambling companies occupied to other businesses while pocketing the levy as well, producing a revenue bonanza.

On this episode of Dollars & Sense, Australia Institute Senior Economist Matt Grudnoff and Elinor discuss the government’s gambling reforms and new research showing that the wealth of Australia’s richest 200 people nearly tripled over the last two decades.

Each week on Dollars & Sense, we dive 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: Matt Grudnoff, Senior Economist, the Australia Institute and Centre for Future Work // @MattGrudnoff

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

Show notes:

‘Give Junk Food & Gambling Ads the Punt’, The Australia Institute (2022)

‘Wealth and inequality in Australia’ by David Richardson and Frank Stilwell, The Australia Institute (2024)

Theme music: Blue Dot Sessions

Columbia University Professor and former World Bank Chief Economist Joseph E Stiglitz joins Ebony Bennet on this episode of Follow the Money to discuss inequality and the rise of Trump, Australia’s “environmental deficit” and his new book, The Road to Freedom: Economics and the Good Society.

This discussion was recorded on Tuesday 13 August 2024 and things may have changed since recording.

Guest: Joseph Stiglitz, Nobel Prize-winning economist // @JosephEStiglitz

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

Show notes:

The Road to Freedom: Economics and the Good Society by Joseph E Stiglitz (2024)

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

On this special episode of After America, recorded live at the State Library of New South Wales, Dr Emma Shortis is joined by Professor Joseph Stiglitz and the Hon Malcolm Turnbull AC to discuss the role of inequality in US politics and dealing with the Trump White House.

This discussion was recorded live on Monday 29 July 2024 and things may have changed since recording.

Guest: Joseph Stiglitz, recipient of the Nobel Prize for Economics and Professor at Columbia University Business School // @JosephEStiglitz

Guest: Malcolm Turnbull, former Prime Minister of Australia // @TurnbullMalcolm

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

Show notes:

The Road to Freedom: Economics and the Good Society by Joseph E Stiglitz (2024)

‘How the World Can Deal with Trump’ by Malcom Turnbull, Foreign Affairs (2024)

Theme music: Blue Dot Sessions

Nobel-Prize winning economist, former World Bank Chief Economist Professor Joseph E. Stiglitz joined Q+A to explain what’s really causing inflation.

Professor Stiglitz is touring Australia as a guest of the Australia Institute, as part of our 30th anniversary celebrations in 2024.

The post Greedflation: what’s really causing inflation | Joseph Stiglitz on Q+A appeared first on The Australia Institute.

The wealth of Australia’s richest 200 people nearly tripled over the last two decades. In 2020-21, capital gains exceeded all other types of income combined. Tax reform is needed to address this problem.

The post Wealth and inequality in Australia appeared first on The Australia Institute.

Key Points:

• • Inequalities of incomes and wealth in Australia have grown in recent decades and the tax system is making the situation worse.
  • The wealth of those on the Rich 200 list rose from the equivalent of 8.4% of the nation’s GDP in 2004 to 23.7% of GDP in 2024.
  • In 2020-21, capital gains exceeded all other types of income combined.
  • The estimated revenue forgone through the failure to fully tax realised capital gains in 2023-24 is estimated to be $19 billion.
  • Three types of tax reform could restrain the growth of wealth inequality in Australia:
    • more comprehensive taxation of capital gains,
    • the introduction of an annual tax on wealth above a specified threshold, and
    • the introduction of a wealth transfer tax.

• Any one of these would make a big difference; all three would be transformational.

“Australia is getting more unequal. Wealth inequality is growing rapidly, and the tax system is making it worse. Australia needs new ideas and new policies to fix it,” said David Richardson, Senior Research Fellow at the Australia Institute.

“Growing economic inequality is making life worse for millions of Australians and holding our country back. The International Monetary Fund and others have shown how economic inequality tends to reduce a nation’s economic growth.

As experienced elder states-people from both major parties slam the deal as disastrous for Australia’s long-term interests, it is clear that Australia should end its conciliatory deference to the U.S.A and instead begin advocating in our own national interest.

“Australians found out about this new deal via a release from the White House, continuing a longstanding trend of secrecy around an agreement that lacks transparency and accountability,” said Emma Shortis, Senior Researcher in International & Security Affairs at the Australia Institute.

“Secrecy is not security, and Australians have a right to know what the government is agreeing to.

“The AUKUS deal has been met with dismay by Australia’s Pacific partners. It badly damaged our relationship with the French government, undermined our multilateral commitments and relationships, and dramatically misinterpreted the trajectory of American power. It unnecessarily escalates tensions with China.

“Australia is unlikely to get these submarines. More importantly, we do not need them.

“The deal was merely an announceable for a government seeking to shore up its position before an election and wedge the opposition. It is an outrageously expensive, unnecessary plan that will probably fail. And even if it wasn’t all of those things, it will not make Australia or our region safer – it will do the opposite.”

On this episode of Dollars & Sense, Greg and Elinor discuss the pay increase for childcare workers, what’s happening in the stock market and the decision to keep interest rates on hold.

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 // @GrogsGamut

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

Theme music: Blue Dot Sessions

We’d love to hear your feedback on this series, so send in your questions, comments or suggestions for future episodes to podcasts@australiainstitute.org.au.

Are the home affairs and immigration portfolios a poisoned chalice for the new minister, Tony Burke? And are the opposition’s attacks on the government over the economy having an impact ahead of the election? On this episode of Follow the Money, we discuss the latest in federal politics with Paul Bongiorno.

This discussion was recorded on Tuesday 6 August 2024 and things may have changed since recording.

Guest: Paul Bongiorno, columnist, The Saturday Paper and The New Daily // @PaulBongiorno

Host: Greg Jericho, Chief Economist, the Australia Institute // @GrogsGamut

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

We’d love to hear your feedback on this series, so send in your questions, comments or suggestions for future episodes to podcasts@australiainstitute.org.au.

New APRA figures show the impact the Reserve Bank’s program of official interest rate increases has had on the Australian economy.

From the low of 0.10% in April 2022, official interest rates have increased by 425 basis points to 4.35%. Thankfully the Reserve Bank has this month kept rates steady, but the damage to the economy has already been done.

Since the March quarter of 2022, quarterly interest payments to the banks from the rest of the Australian economy went from $25.8 billion to $78.95 billion in March 2024. If we annualise these figures that means there has been a $212 billion increase in payments to the banks since official rates were increased.

Since that low of March 2022, each 25 basis point increase in the official interest rate increased banks’ annualised interest charges by around $12 billion. For comparison that is slightly more than the Australian government is budgeted to spend in this financial year on support for carers.

Over the same period, quarterly payments to the banks for home loans increased from $13.5 billion to $32.8 billion. The increase of $19.3 billion per quarter equates to just over $77 billion per annum. It also means that each 25 basis point increase in the official rate increases annualised interest charges on home loans by $4.5 billion per annum. Each 100-basis point increase increased the banks’ annualised interest charges on home loans by $18 billion.

Patricia Karvelas peppered the Treasurer with questions this morning, asking whether there is there anything the government can do to slow “non-essential projects” to “allow flow back to housing”.

The short answer is yes. There is one particular kind of infrastructure the government can cut back on first: fossil fuels.

Every time the government approves new coal mines or gas expansions, it’s giving the go ahead to projects that soak up labour and equipment — taking resources away from the construction of essential infrastructure like dwellings, roads, and railways.

Some $41 billion worth of new fossil fuel projects are gobbling up the construction supply chain.

Recent research by the Australia Institute using official government data has found that fossil fuel projects make up 53% of the total funding committed to resource and energy infrastructure across Australia.

Woodside, for example, has committed an estimated $18 billion to oil and gas projects in Western Australia; Santos $4.3 billion to the Barossa gas project in the NT. Further billions are flowing to coal projects in NSW and Queensland.

In the wake of the Reserve Bank’s latest forecasts, Treasurer Jim Chalmers is facing calls to cut back infrastructure investment to relieve inflation pressures and ramp up housing construction – cutting back on fossil fuels is an easy first step to address this problem.

Key Points:

Washington DC-based international policy expert Dr Nancy Okail joins Dr Emma Shortis on this episode of After America to discuss America’s relationships with China and the Middle East, and possibility a more progressive approach to foreign policy led by Kamala Harris.

This discussion was recorded on Friday 2 August 2024 and things may have changed since recording.

Guest: Nancy Okail, President and CEO, Centre for International Policy // @NancyGEO

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

Show notes:

‘Ukraine and Israel and the Two Joe Bidens’ by Matthew Duss, The New Republic (December 2023)

‘The Killing of a Hamas Leader Is Part of a Larger War’ by Matthew Duss and Nancy Okail, The New York Times (August 2024)

Theme music: Blue Dot Sessions

The wording of the Western Australian Government’s fact sheet on petroleum resources exemplifies the way in which the country’s resources are described to the public:

“Petroleum resources are owned by the community and a royalty is a purchase price for the resource. The community expects a fair return for the loss of its non-renewable petroleum resources.”

This rhetoric does not reflect reality. While the community might expect a fair return for the loss of its resources, in many cases it gets no return at all, fair or otherwise.

Australia has ten facilities that export gas as liquified natural gas (LNG). Six of these projects—both of the Northern Territory’s facilities and four of the five operating in Western Australia—pay no royalties, either state or federal. These facilities represent 56% of Australia’s gas export capacity. This means that all the gas exported from the NT, and more than half the gas exported from Australia, is given for free to the companies exporting it.

The monetary value of this gas is enormous. The total value of LNG exports over the last four years is estimated at $265 billion Australia-wide, $37 billion of which was exported from the NT. All of the NT’s LNG exports were royalty-free and Australia’s royalty-free exports totalled $149 billion. To put this another way: in the last four years alone, Australians have given away the gas that made $149 billion worth of LNG, for free.

This one simple change could redirect much of the clean, cheap renewable energy that is currently being wasted, or “curtailed”, by the National Energy Market during the day.

Key Findings:

• Annual forced curtailment for 2023-24 was around 4,000 gigawatt-hours (GWh).
• This represents around 9.3% of Australia’s total generation from wind and utility solar.
• Historically, Off-peak hot water systems have been set to operate at night, but they could be reconfigured to consume electricity during the middle of the day, when there is an abundant supply of renewable electricity.
• Switching off-peak hot water to the middle of the day could provide around 4,000 GWh of flexible demand, almost the exact current level of renewable curtailment.
• This could save up to $6 billion in household electricity and energy costs by 2040.

“The fact that we in Australia choose to waste cheap and clean renewable energy on a regular basis is absurd,” said Dr Richard Denniss, Executive Director at the Australia Institute.

“While the persistent claims of a looming energy crisis and gas shortage ring out across the country, we are turning our back on nearly 10% of the current renewable capacity in our grid.

“The time for inflexible, expensive and polluting electricity from fossil fuels has come and gone. It is now up to the Federal Government to make the necessary changes that will allow Australians to properly access clean, cheap renewable energy.

This “curtailment” is carried out to maintain grid stability by preventing an oversupply of electricity at a time when there is simply not enough demand for it.

Analysis of NEM data suggests that annual forced curtailment for 2023-24 was around 4,000 gigawatt-hours (GWh). This represents around 9.3% of Australia’s total annual wind and utility solar generation.

A possible source of flexible demand for this generation is residential off-peak hot water. Off-peak systems account for around 30% of Australian household hot water systems. They are designed to use power overnight, a period when electricity demand has historically been lowest, but during which coal-fired generators have kept producing electricity regardless.

Today, off-peak times could be redefined, and off-peak systems reorganised to consume renewable electricity during the middle of the day, when there is an abundant supply of renewable electricity. Research by the Institute for Sustainable Futures at the University of Technology Sydney estimates that switching off-peak hot water to the middle of the day could have provided around 4,000 GWh of flexible demand in 2020—coincidentally, almost the exact level of renewable curtailment in 2023–24.

The shots fired at Donald Trump at a rally in Pennsylvania on Saturday are being investigated as an assassination attempt of the former president and current Republican presidential nominee.

Assassination attempts on presidents and presidential nominees are littered throughout American history. What happened in Pennsylvania is horrifying, but sadly not surprising.

I’ve been really struck by how many senior political figures in the United States came out after the shooting and said political violence has no place in America. US President Joe Biden said violence of this kind is “unheard of” in the US.

That is pretty astounding. The United States was founded on political violence, and incidents of political violence mark its entire history.

In fact, Biden began his political career framing himself as the political heir to the murdered Kennedy brothers – President John F. Kennedy, who was assassinated in 1963, and Robert F. Kennedy, assassinated in 1968.

However, for this incident to occur in this moment, given the volatile nature of the presidential campaign so far and the deep divisions in the United States, is deeply concerning.

The Wrap with Ebony Bennett

Nobel Prize-winning economist Professor Joseph E. Stiglitz kicked off his Australian tour this week and has well-and-truly hit the ground running.

There were full houses in Sydney and Hobart to see the former World Bank chief economist and best-selling author, who’s visiting Australia as a guest of the Australia Institute, as part of our 30th anniversary celebrations.

Here are three key takeaways from the first week of his tour:

1. Australia’s democratic institutions are the envy of the world

Mandatory, preferential voting and an independent electoral commission have helped Australia avoid some of the “perverse” outcomes seen in the United States, according to Professor Stiglitz.

“If the US had had rank order voting, Trump would not have been on the ballot in the first election in 2016.”

Professor @JosephEStiglitz unpacks three democratic institutions that Australia does better than the US.#auspol pic.twitter.com/5zY6zJ3HbS

— Australia Institute (@TheAusInstitute) July 30, 2024

The Australia Institute surveyed a nationally representative sample of 1,014 Australians about whether they support public funding for political parties and candidates to run election campaigns and cover administrative costs.

The results show that:

• Three in five (60%) Australians oppose public funding of political parties and candidates. Only one in four (27%) Australians support public funding.
• A majority of voters for all political parties oppose public funding.
• Seven in ten (71%) Australians oppose increasing public funding for political parties and candidates. Only one in six (18%) Australians support increasing it.
• A majority of voters for all political parties oppose increasing public funding. Opposition was highest among voters for One Nation (92%), the Coalition (78%) and Other/Independent candidates (71%).
• Earlier polling research finds that Australians would be more likely to use an alternative public funding system, “democracy vouchers” (39% are likely), than to donate under the status quo (16% are likely).

The post Polling – Public funding for political parties and candidates appeared first on The Australia Institute.

Superannuation tax concessions are meant to encourage saving for retirement, but the system is being gamed to help the wealthiest avoid paying tax. Australia Institute Chief Economist Greg Jericho joins Ebony Bennett on this episode of Follow the Money to bust some super myths and discuss what a fairer system should look like.

This discussion was recorded on Tuesday 30 July 2024 and things may have changed since recording.

Guest: Greg Jericho, Chief Economist, the Australia Institute // @GrogsGamut

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

Show notes:

‘Who benefits? The high cost of super tax concessions’ by Minh Ngoc Le (June 2024)

‘Superannuation tax concessions are making inequality worse’ by Greg Jericho (July 2024)

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

You can see Professor Joseph E Stiglitz speak live in several cities across Australia as part of the Australia Institute’s 30th anniversary celebrations. Tickets are available via our website.

On this episode of Dollars & Sense, Greg and Elinor discuss Australia’s uncompetitive airline industry, the cost of privatising essential public services, and the latest inflation figures.

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 // @GrogsGamut

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

Theme music: Blue Dot Sessions

We’d love to hear your feedback on this series, so send in your questions, comments or suggestions for future episodes to podcasts@australiainstitute.org.au.