News

Nov172017

Here’s to your health: Guidelines for alcohol consumption are more varied than the health lobby thinks

The joys of December for many kick off with the work Christmas party, a chance to unwind with colleagues with the pleasure of beach cricket and family long lunch in prospect.

The common factor in all these life-affirming activities is alcohol, usually served refreshingly cold to complement our wonderfully warm summer days and nights.

But be warned, Australia. The nanny state is increasingly worried about our drinking costs. The Bureau of Statistics reported this month that …

Nov172017

Let the market decide: government intervention in the energy sector has long been counterproductive

Let the market decide: government intervention in the energy sector has long been counterproductive

Is our energy market mega-shambles a case of market failure or government failure?

BHP Billiton chief Andrew Mackenzie told his shareholders on Thursday that it was time governments got out of the way.

“We’d like them to kind of back off a bit,” he told shareholders on Thursday. “Let the market do its business.”

The argument about how far governments should intervene in the gas and electric markets has being going on for at least 150 years, we discovered this …

Nov172017

Feelings are for chickens

“Feelings” are for chickens, says law professor, who finds students surprisingly eager to engage in critical thinking.

During a week characterised by ostentatious displays of feelings, it was a relief to be reminded that calm, rational thought is still encouraged in some parts of the liberal west.

Adam MacLeod, an associate professor of law at Faulkner University in Alabama, US, shared an amusing and inspiring speech he delivered to his first-year students on a

Nov142017

Rent-seekers think Liberals wrong? Well that’s good

Nick Cater writes in The Australian:

“Any fool can criticise, condemn and complain,” wrote Dale Carnegie. “But it takes character and self-control to be understanding and forgiving.”

Carnegie’s advice should temper our loathing of the people responsible for wrecking a perfectly good energy market with their ill-judged policy intrusions.

They may claim to be well intentioned, but as Carnegie reminds us in How to Win Friends and Influence People, even …

Nov102017

The NEG is bad news for South Australia: But it’s good news for everybody else

“Coal is dead, long live renewables,” South Australian Premier Jay Weatherill retweeted on Thursday as a power plant that once provided a fifth of the state’s energy came crashing to the ground.

The link between SA’s high power prices, fragile electricity grid and premature closure of every coal-fired power station is yet to sink home to the Premier and his Energy Minister, Tom Koutsantonis.

On Thursday Koutsantonis reaffirmed the SA government’s opposition to …

Nov102017

The robots are coming: Why automation is not a cause for concern

A generation ago, producing and distributing a newsletter like this one was a labour-intensive exercise. The newsletter’s content needed to be created, printed, stuffed into envelopes and posted.

Technology has eliminated most of that labour, but also, as has been the way since the invention of the wheel, created work elsewhere.

The case of newsletters and think tanks shows how. The staff hours and money the MRC would have invested in a weekly newsletter can now be …

Nov102017

Death by a thousand cuts: Everybody’s cutting corporate tax but us

Company tax cuts in Australia are long overdue.

The average company income tax rate in the OECD has dropped from 32 per cent in 2000 to 24 per cent today.

10.11.17OECDCompanyTaxRates2017

That’s why this week officials from the Department of Treasury published a paper outlining the potential impacts on the rest of the world if the United States drops its federal company tax rate from 35 to 20 per cent, as President Donald Trump has promised.

Treasury is staggeringly clear about the impacts on …

Nov102017

The seven deadly flaws of sin taxes

The seven deadly flaws of sin taxes

Exactly why free-thinking people should make unwise decisions has troubled economists since the beginning of economics.

In his seminal book on the topic, Wealth and Welfare, British economist Arthur Pigou (1877-1959) quoted Ancient Roman poet Ovid: “Video meliora, proboque, deteriora sequor (I see better things, and approve, but I follow worse).”

Or to put it in a modern context: “I know I should spend my money on fruit and vegetables, but stuff it, another schooner …

Nov072017

Palaszczuk’s green leaning will kill mine and jobs

Nick Cater writes in The Australian:

The directive never to stand between a premier and a bucket of commonwealth money at last has been overturned, albeit for a motive less noble than we may have wished.

Six months ago Queensland Premier Annastacia Palaszczuk seemed eager to grab a lazy billion from Canberra to kickstart a railway that would create jobs and a stream of mining royalties from the Galilee Basin, a hitherto untapped source of wealth and — dare we suggest — …

Nov032017

Australia’s 17th Prime Minister Proved no Holt on National Progress

Three months after Harold Holt disappeared forever in the tempestuous surf off Victoria’s Cheviot Beach on 17 December 1967, Gough Whitlam told parliament in a poignant eulogy to the late Prime Minister that Holt’s “place in the political annals of our nation remains to be fixed by the perspective of history”. Half a century after his dramatic departure, it is a timely occasion to appraise the contribution and legacy of the affable, sunny-natured man who led …

Nov032017

Cheaper to buy a new phone than recharge its battery?

‘Cheaper to buy a new phone than recharge its battery?’, a headline you would expect to see in the satirical online website the Betoota Advocate crossed our desks this week.

But it wasn’t satire, it was a chart by economists from MLC, reproduced below, comparing electricity price movements to telecommunication equipment and services prices (i.e. mobile phones) from the Consumer Price Index.

3.11.17CheaperToBuyNewPhoneThanRechargeBattery

Since 2007, electricity prices paid by households have risen 126 per cent …

Nov032017

Myth busting industry super fund 'outperformance'

When we released our research, ‘Guarding your nest egg: restoring independence to industry retirement funds’, earlier this year, we predicted that industry super funds would claim that they outperform retail funds as a standard defense to sensible reforms such as adding independent directors to superannuation trustee boards.

So, we took the time to consider whether they really had a point and made the effort to explain away this myth, and point out that average industry …

Nov032017

Ignoring market forces is a new peak in bank bashing

We have reached peak bank bashing.

Businesses ultimately prosper if they deliver products and services consumers want – and to do this they need the freedom to respond to market forces.

With the expansion of technology in our economy and around the world, consumer demands in terms of service have increased significantly, and the competition to service consumers has also intensified.

We see this in areas such as banking. Digital disruption is clearly playing a role …

Nov032017

Beyond education funding - dealing with social disadvantage

In our submission to the review into the Gonski funding arrangements this week, we challenged the notion that pouring money into schools does much if anything for the most socially disadvantaged children.

We argue that the Gonski Review’s narrow focus on education funding meant that scant consideration was given to the link between social disadvantage and educational achievement. There is abundant evidence, for example, that the life chances of a child growing up in …

Nov032017

Four ways we are paying for Labor's broadband blunder

The reaction to the release of Telstra’s annual results on Thursday is a cold reminder of how long it can take poor government decisions to show up in outcomes.

Telstra shares fell to $3.51 on Thursday, meaning that a cool $25 billion has been sliced off the company’s value in 17 months.

Part of this loss can be attributed to lower than expected margins on the broadband capacity Telstra buys from nbn and sells to its customers.

Shareholders in other broadband …

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