Comments on Peter Drysdale "Back to the future in managing the Chinese economy?" 24/08/2015
China is unlikely to go backward in terms of it economic system and management, although its approach to its political situation may be very different with tighter control along the its way to a destiny that is unknown at this stage.
China has benefited enormously from its economic reforms from a command economy to a market economy and through its opening to the outside world through economic integration with the international economy.
Its leadership team, no matter what some of their personal thinking, is unlikely to risk its legitimacy in governing the country by going back to the command economic system. The stakes are too high and the price would be too greater not only for the ordinary Chinese, but also much more for the leadership to do that. China is irrevocably integrated with the international economies and there is no possibility of return to its pre-reform era economic system, irrespective what the productivity of the previous era.
That, however, does not mean that China’s institutions will move in the direction of the US’s of any time soon, particularly its political system.
The interventions in its stock markets and the reactions to the fall of Chinese currency or more than 3% indicate the immaturity of the Chinese authorities in managing financial markets and exchange rate regime rather than a return to a command economic system.
Notwithstanding that, the general trend of economic liberalisation to market driven is clear and there is no point to go back and no point for people both inside and outside China to worry about a potential return to the previous economic system.
Showing posts with label economic reforms. Show all posts
Showing posts with label economic reforms. Show all posts
2015-08-24
China's economic development and its institutions
Comments on Paul Hubbard "If Mao still ran China, China would still be poor", 24/08/2014
While most of Paul Hubbard's arguments in this post may be correct (particularly in regarding the Mao era model) and that includes the title particularly, the point on the middle income trap is a bit confusing, particularly in the context of using the US institutions as a reference point. This is because the high income levels are themselves vastly different from the entry point ($US 12,616 or more on 1/07/2014 by World Bank) to the highest level ($103,050 for Norway), or even the level of the US ($55,200). China's income level was $7,380 then.
Yes, it can be expected China will continue to improve governance and carry out further and possibly continual reforms over the years and decades ahead. But that is very different to catch up with the institutions in the US.
It is possible that China may enter into the ranks of high income countries in a decade. Its institutions, however, can be reasonably expected to be still very different from that of the US's. Further, there is the debate whether China's development and economic growth represents a new and different model, presumably different from that of the US's.
While so far it is difficult to prove the China model, it cannot be completely ruled out at this stage either. It may takes much more time (likely to be several more decades) to prove or disapprove a China model.
While most of Paul Hubbard's arguments in this post may be correct (particularly in regarding the Mao era model) and that includes the title particularly, the point on the middle income trap is a bit confusing, particularly in the context of using the US institutions as a reference point. This is because the high income levels are themselves vastly different from the entry point ($US 12,616 or more on 1/07/2014 by World Bank) to the highest level ($103,050 for Norway), or even the level of the US ($55,200). China's income level was $7,380 then.
Yes, it can be expected China will continue to improve governance and carry out further and possibly continual reforms over the years and decades ahead. But that is very different to catch up with the institutions in the US.
It is possible that China may enter into the ranks of high income countries in a decade. Its institutions, however, can be reasonably expected to be still very different from that of the US's. Further, there is the debate whether China's development and economic growth represents a new and different model, presumably different from that of the US's.
While so far it is difficult to prove the China model, it cannot be completely ruled out at this stage either. It may takes much more time (likely to be several more decades) to prove or disapprove a China model.
2015-07-15
A short comment on a small point
Comments on ABC News Report "Bank strong but economy needs reform to maintain current living standards: NAB boss", 15/07/2015
This is a very short comment on only one small point. Mr Andrew Thorburn is National Australia Bank boss.
This is a very short comment on only one small point. Mr Andrew Thorburn is National Australia Bank boss.
I don't know if Mr Andrew Thorburn really said this or not, but it is a paragraph (the seventh paragraph) in the ABC news report online that I read:
Mr Thorburn said that change will not happen unless political and business leaders can clearly communicate why it is needed and how it can be implemented, and he fears if that does not happen, living standards will inevitably fall.
The point I would like to point out is the part "if that does not happen, living standards will inevitably fall".
I would argue that it will not be inevitable living standard will fall, it may be that the living standard will not rise as quickly as opposed to the case with some major and meaningful economic and structural reforms.
It is either an error (i.e. a misquote) of the reporter, or an oversight by Mr Andrew Thorburn, or a showing of the tendency of over sensationalising an issue or a point.
PS: for some background of the report, the following two paragraphs are the third and fourth paragraphs from that report as they are:
"There is no doubt that we cannot be complacent and we must recommit to further economic reform," he told the Trans Tasman Business Circle.
"I think the reality is that it has been quite some time in our country since there has been major economic and structural reform. I think we would have to go back to the GST in July 2000."
"I think the reality is that it has been quite some time in our country since there has been major economic and structural reform. I think we would have to go back to the GST in July 2000."
2015-07-12
Clever ways for getting reforms done
Comments on Stephen King "We know what to do, but how do we do it", 12/07/2015
If the difficulties in reforms for the good of the majority are the minority losers intensive lobbies at the expense of the silent majority, then it seems the experience of the Stockholm referendum may prove to be a successful strategy, that is, to have a referendum on a major reform, so the majority have their says heard. A referendum would neutralise lousy minority's disproportionate influence through lobbies.
Of course the method from the Vancouver experience with carbon tax is also a very good approach, particularly its revenue neutrality and linking any misuse of the carbon tax with the minister's pay cuts as a penalty is excellent.
If the difficulties in reforms for the good of the majority are the minority losers intensive lobbies at the expense of the silent majority, then it seems the experience of the Stockholm referendum may prove to be a successful strategy, that is, to have a referendum on a major reform, so the majority have their says heard. A referendum would neutralise lousy minority's disproportionate influence through lobbies.
Of course the method from the Vancouver experience with carbon tax is also a very good approach, particularly its revenue neutrality and linking any misuse of the carbon tax with the minister's pay cuts as a penalty is excellent.
2011-08-26
China's gradual evolutionary approach has been very constructive
Comments on Christine Wong “China: How far across the river?” 26/08/2011, http://www.eastasiaforum.org/2011/08/20/china-how-far-across-the-river/
I think the article by Zhao Boying, China's Road, is revealing in terms of China's gradual evolutionary reforms and development, in many areas.
While there was a broad consensus for reforms in the early days of reforms, China did not have a big bang design of reforms. It was one step at a time and some times there were back and forth, reflecting the fundamental guiding line of "touching stones to cross the river".
Inevitably, there were many unexpected results and outcomes that needed fixing. Government finance and services have not been exceptions.
Also, to get the whole system reformed/changed, the idea of allowing some to get rich first, seemed to also have a regional dimension as well as people dimension
China's reforming process is far from over and will be a long one. The gradual evolutionary approach has had its shortcomings, but has also achieved huge successes, especially compared to the former USSR and many eastern European countries.
If China can continue this evolutionary approach, but at the same time recognise the fact that as reforms proceed further and further, more experiences are accumulated and also where and how to get to the end point is becoming clearer and clearer, more systematic designs may be possible and could be implemented.
2011-01-11
Productivity, inflation and wage growth
Comments on Peter Anderson “Wages policy undermines productivity quest”, 11/01/2011, http://www.theaustralian.com.au/news/opinion/wages-policy-undermines-the-productivity-quest/story-e6frg6zo-1225985225840
While I agree with the notion that wages growth should be in line with the growth of productivity, I find the following paragraph from the post confusing:
"Our annual productivity growth at present stands at 1.1 per cent. This is half of the average during the 90s. Wages are rising three to four times faster than productivity. Across the longer term, that is not sustainable."
Let me start with last sentence. Wages growth is nominal that is inclusive the effects of both productivity and prices change of inflation. Anderson's statement did not mention how inflation was, and that makes it unclear whether the wages growth of 3 to 4 times faster is too fast or not.
Secondly, the differences in productivity growth between now and the average of the 90s can be the effects of many factors, including both domestic and international influences. For example, if the world productivity, especially the industrialised economies also has similar differences, then our productivity slow down may not necessarily a purely domestic issue.
Thirdly, there should be a balance between productivity agenda, as important as it is, and other equally agendas, such as proper, legitimate protection of labour rights.
PS: Further, the growth of labour supply can also be an influence on productivity, other things equal. Labour supply is affected by population growth and participation rate. Population growth is also affected by immigration.
While I agree with the notion that wages growth should be in line with the growth of productivity, I find the following paragraph from the post confusing:
"Our annual productivity growth at present stands at 1.1 per cent. This is half of the average during the 90s. Wages are rising three to four times faster than productivity. Across the longer term, that is not sustainable."
Let me start with last sentence. Wages growth is nominal that is inclusive the effects of both productivity and prices change of inflation. Anderson's statement did not mention how inflation was, and that makes it unclear whether the wages growth of 3 to 4 times faster is too fast or not.
Secondly, the differences in productivity growth between now and the average of the 90s can be the effects of many factors, including both domestic and international influences. For example, if the world productivity, especially the industrialised economies also has similar differences, then our productivity slow down may not necessarily a purely domestic issue.
Thirdly, there should be a balance between productivity agenda, as important as it is, and other equally agendas, such as proper, legitimate protection of labour rights.
PS: Further, the growth of labour supply can also be an influence on productivity, other things equal. Labour supply is affected by population growth and participation rate. Population growth is also affected by immigration.
2010-12-14
Banks' sole criterion of policy reform too bare!
Comments on Michael Stutchbury “Lucky country can't bank on populist reforms”, 14/12/2010, http://www.theaustralian.com.au/business/opinion/lucky-country-cant-bank-on-populist-reforms/story-e6frg9p6-1225970526451
Michael, while I agree with you the Swan banking reforms are not real reforms but popular political treatments that will worsen consumer welfare in total, I do have some issues with the following criterion of reforms put forward by the Productivity Commission Chairman (to quote from your article):
'Last week, Productivity Commission chairman Gary Banks suggested that policy changes should only count as "reform" if backed by compelling evidence that they were the best option for improving productivity.'
Productivity is and should be only a part of overall consideration. Even though it could be an important consideration, it should not be the sole criterion for reforms.
For example, if the productivity effects remain the same and there are other significant benefits (say social distribution) under a policy change, it would be an important and worthwhile reform.
One has to understand that there are trade-offs between different policy objectives and productivity is but one of those objectives.
In that sense, what Banks argued was a partial approach and could be argued as an unhelpful argument or lobby by and from a special interest group, although I do not mean that Banks really had that intention. He might have been either in a different context or misunderstood.
What do you think?
Michael, while I agree with you the Swan banking reforms are not real reforms but popular political treatments that will worsen consumer welfare in total, I do have some issues with the following criterion of reforms put forward by the Productivity Commission Chairman (to quote from your article):
'Last week, Productivity Commission chairman Gary Banks suggested that policy changes should only count as "reform" if backed by compelling evidence that they were the best option for improving productivity.'
Productivity is and should be only a part of overall consideration. Even though it could be an important consideration, it should not be the sole criterion for reforms.
For example, if the productivity effects remain the same and there are other significant benefits (say social distribution) under a policy change, it would be an important and worthwhile reform.
One has to understand that there are trade-offs between different policy objectives and productivity is but one of those objectives.
In that sense, what Banks argued was a partial approach and could be argued as an unhelpful argument or lobby by and from a special interest group, although I do not mean that Banks really had that intention. He might have been either in a different context or misunderstood.
What do you think?
2010-08-23
Don't abuse the word reforms
Comments on Jessica Irvine “Big-picture reforms now most at risk”, 23/08/2010, http://www.smh.com.au/opinion/politics/bigpicture-reforms-now-most-at-risk-20100822-13aze.html?posted=sucessful
Let's forget the notion of big reforms for a moment and think about real issues that are important to the nation.
The biggest issue is to reduce government spending and wastes. On this account, the current government is not scoring well - the NBN is a white elephant, the CPRS takes households money to pay for big polluters and the mining tax would enable it to spend and waste more.
So don’t just label those as reforms, consider whether they are good or not!
The most sensible policies in those three areas should be:
1. A carbon tax with proceeds returned to households and distributed on an equal per capita basis.
2. No mining tax, because mining profit is taxed through company income tax.
3. Adopt the coalition’s broadband policy approach with minimum modifications.
As to the Henry review, the problems with its RSPT should be a summary of the quality and judgement of that review. It is not and should not be a blueprint for the future.
Let's forget the notion of big reforms for a moment and think about real issues that are important to the nation.
The biggest issue is to reduce government spending and wastes. On this account, the current government is not scoring well - the NBN is a white elephant, the CPRS takes households money to pay for big polluters and the mining tax would enable it to spend and waste more.
So don’t just label those as reforms, consider whether they are good or not!
The most sensible policies in those three areas should be:
1. A carbon tax with proceeds returned to households and distributed on an equal per capita basis.
2. No mining tax, because mining profit is taxed through company income tax.
3. Adopt the coalition’s broadband policy approach with minimum modifications.
As to the Henry review, the problems with its RSPT should be a summary of the quality and judgement of that review. It is not and should not be a blueprint for the future.
2010-05-24
The China model to be developed
Comments on David Kelly “Costs of maintaining stability in China”, 23/05/2010, http://www.eastasiaforum.org/2010/05/23/costs-of-maintaining-stability-in-china/
The so called China model does not really exist, or is so fluid or evolving or in transition that is not a model. It is like what Deng said of Chinese economic reforms, "cross the river by toughing stones".
However, it is likely that China has got to a stage that it needs to consider its future strategic directions that may lead to China model eventually.
Such considerations should adopt the same overarching strategies as Deng did for economic reforms, but in a much broader context.
The so called China model does not really exist, or is so fluid or evolving or in transition that is not a model. It is like what Deng said of Chinese economic reforms, "cross the river by toughing stones".
However, it is likely that China has got to a stage that it needs to consider its future strategic directions that may lead to China model eventually.
Such considerations should adopt the same overarching strategies as Deng did for economic reforms, but in a much broader context.
2010-02-23
Also on the scale of China's economic impact
Comments on Ligang Song “The scale of China’s economic impact”, 23/02/2010, http://www.eastasiaforum.org/2010/02/23/the-scale-of-chinas-economic-impact/
Song's article is an interesting one.
I'd like to comment on some points in the article.
First, some challenges are also opportunities, as touched in some parts of the article. For example, the so called low carbon economy can be both extremely challenging for the world as a whole because it will represent as an additional constraint and possibly very rewarding for some economies. Assuming the presumed low carbon economy or changing towards it will be true in the next couple of decades, one has to consider not only from an absolute advantage, but also a comparative advantage point of view.
From that point, there will be very different implications for different economies. For some, it may be double whamming, while for some it may be a new, rare and extremely valuable development opportunity.
Secondly, while it may be perceived desirable to have a systematic institutional reform, history does not necessarily prove that is always feasible and realisable. China’s economic reforms in the past 30 years or so was on the premise of “cross the river by touching stones” as opposed to a well designed, systematic, big bang approach to reform.
Thirdly, it may be more pertinent to talk about systematically economic reforms in China 30 or even 20 years ago, the reform tasks in that front, while still incomplete, are largely accomplished.
Fourthly, political reforms, while undoubtedly extremely important in the long run, can be equally extremely tricky and difficult. What is the target “model” for political reforms for China? While many people either explicitly or implicitly assume the western style political system as THE model for China to follow, is it an inevitable end and/or path of the political reform?
Fifthly, in terms of the process or stage of economic development, while China’s growth might not be expected to slow, it does not necessarily mean that its energy, resource and carbon intensity of growth will not recede, as the Song states. Definitely the intensity of energy, some resources and carbon of the Chinese economy as a whole is likely to decline. I guess this is the reason and underlying logic why the Chinese government has proposed for its carbon intensity to decrease by 40-45% by 2020 over that of 2005. 40-45% reduction is by no means a small recession in the intensity.
So my view on China’s impact on many things is that it is now at a very interesting stage where there will be a sharp difference in terms of the absolute and relative magnitude. The next phase of the Chinese economy is likely to increase the share of quality growth in its total growth as opposed to a sheer focus on quantity growth. The implications of that transformation on many things, especially on resources, will be very interesting to see.
We perhaps need to borrow an analogue to the adaptive and rational expectations theories in analysing the Chinese economic growth for the next decade or two.
Song's article is an interesting one.
I'd like to comment on some points in the article.
First, some challenges are also opportunities, as touched in some parts of the article. For example, the so called low carbon economy can be both extremely challenging for the world as a whole because it will represent as an additional constraint and possibly very rewarding for some economies. Assuming the presumed low carbon economy or changing towards it will be true in the next couple of decades, one has to consider not only from an absolute advantage, but also a comparative advantage point of view.
From that point, there will be very different implications for different economies. For some, it may be double whamming, while for some it may be a new, rare and extremely valuable development opportunity.
Secondly, while it may be perceived desirable to have a systematic institutional reform, history does not necessarily prove that is always feasible and realisable. China’s economic reforms in the past 30 years or so was on the premise of “cross the river by touching stones” as opposed to a well designed, systematic, big bang approach to reform.
Thirdly, it may be more pertinent to talk about systematically economic reforms in China 30 or even 20 years ago, the reform tasks in that front, while still incomplete, are largely accomplished.
Fourthly, political reforms, while undoubtedly extremely important in the long run, can be equally extremely tricky and difficult. What is the target “model” for political reforms for China? While many people either explicitly or implicitly assume the western style political system as THE model for China to follow, is it an inevitable end and/or path of the political reform?
Fifthly, in terms of the process or stage of economic development, while China’s growth might not be expected to slow, it does not necessarily mean that its energy, resource and carbon intensity of growth will not recede, as the Song states. Definitely the intensity of energy, some resources and carbon of the Chinese economy as a whole is likely to decline. I guess this is the reason and underlying logic why the Chinese government has proposed for its carbon intensity to decrease by 40-45% by 2020 over that of 2005. 40-45% reduction is by no means a small recession in the intensity.
So my view on China’s impact on many things is that it is now at a very interesting stage where there will be a sharp difference in terms of the absolute and relative magnitude. The next phase of the Chinese economy is likely to increase the share of quality growth in its total growth as opposed to a sheer focus on quantity growth. The implications of that transformation on many things, especially on resources, will be very interesting to see.
We perhaps need to borrow an analogue to the adaptive and rational expectations theories in analysing the Chinese economic growth for the next decade or two.
2009-09-16
A chance for Turnbull to win the next election on economic reform
Comments on Paul Kelly “Economic reform a Turnbull minefield”, 16/09/2009, http://www.theaustralian.news.com.au/story/0,25197,26078848-12250,00.html
Economic reform may or may not be a Turnbull minefield. It depends on how Turnbull and the opposition take the current opportunities that the Rudd government has offered them.
Paul Kelly argues that “the Liberal Party confronts a novel political and intellectual dilemma: how does it present as the party of economic reform when the new policy fashion is fiscal stimulus and labour market regulation?” based on that “the two events reshaping Australia's policy debate are Kevin Rudd's 2007 election victory that crushed the 20-year momentum towards labour market deregulation and last year's global financial crisis that enshrined fiscal expansion and state intervention as the ameliorating responses.”
While what Paul Kelly’s statements are true, the performance of the Rudd government over the past two years has presented Turnbull and the opposition some unique gifts in defeating the incumbent government at the next election next year.
Gillard/Rudd have misused the mandate they got from the last election on IR reforms and swinged too much towards inflexibility of the labour market towards collective agreements. This exposes a weakness in their approach to IR reform, that is, ideology driven as opposed to get the balance “right”. Turnbull can attack the Rudd government on productivity and efficiency while keeping fairness as a balance.
Politically, Turnbull needs to accept that Work Choice has been dead and the coalition has moved on from that. What they have to do is to correct Gillard/Rudd’s over regulation of the labour market to make it both fair and efficient. That is what Turnbull should argue.
On the fiscal stimulus, the Rudd government is even more vulnerable. The cash handouts have been wasteful and led to unnecessarily larger budget deficits and government debt. The school education spending has been exposed as not only wasteful, but also as having little to do with education revolution and hence future productivity. The list goes on and on, like the $43 billion NBN with no business case study.
Turnbull and Hocky need to accept the need for fiscal stimulus but focus efficient and effective fiscal stimulus as opposed to panic spending behaviour of throwing money at all costs at the expenses of government budget and debt.
So there are already enough opportunities for Turnbull to get on upper hand with the Rudd government in the two areas that Paul Kelly has argued to be a minefield for Turnbull. They are now in favour of Turnbull than Rudd.
One of the main issues is likely to be in the area of the ETS. This has been the coalition especially Turnbull’s weak political spot. What Turnbull needs to do is to neutralise this issue and that should not be difficult to achieve, particularly given the government has also been exposed as inflexible and could not even get any non-government senators on side.
I see the next election is winnable for the Coalition if it can avoid any more big political mistakes and focus on the economy, labour market and responsible government.
Economic reform may or may not be a Turnbull minefield. It depends on how Turnbull and the opposition take the current opportunities that the Rudd government has offered them.
Paul Kelly argues that “the Liberal Party confronts a novel political and intellectual dilemma: how does it present as the party of economic reform when the new policy fashion is fiscal stimulus and labour market regulation?” based on that “the two events reshaping Australia's policy debate are Kevin Rudd's 2007 election victory that crushed the 20-year momentum towards labour market deregulation and last year's global financial crisis that enshrined fiscal expansion and state intervention as the ameliorating responses.”
While what Paul Kelly’s statements are true, the performance of the Rudd government over the past two years has presented Turnbull and the opposition some unique gifts in defeating the incumbent government at the next election next year.
Gillard/Rudd have misused the mandate they got from the last election on IR reforms and swinged too much towards inflexibility of the labour market towards collective agreements. This exposes a weakness in their approach to IR reform, that is, ideology driven as opposed to get the balance “right”. Turnbull can attack the Rudd government on productivity and efficiency while keeping fairness as a balance.
Politically, Turnbull needs to accept that Work Choice has been dead and the coalition has moved on from that. What they have to do is to correct Gillard/Rudd’s over regulation of the labour market to make it both fair and efficient. That is what Turnbull should argue.
On the fiscal stimulus, the Rudd government is even more vulnerable. The cash handouts have been wasteful and led to unnecessarily larger budget deficits and government debt. The school education spending has been exposed as not only wasteful, but also as having little to do with education revolution and hence future productivity. The list goes on and on, like the $43 billion NBN with no business case study.
Turnbull and Hocky need to accept the need for fiscal stimulus but focus efficient and effective fiscal stimulus as opposed to panic spending behaviour of throwing money at all costs at the expenses of government budget and debt.
So there are already enough opportunities for Turnbull to get on upper hand with the Rudd government in the two areas that Paul Kelly has argued to be a minefield for Turnbull. They are now in favour of Turnbull than Rudd.
One of the main issues is likely to be in the area of the ETS. This has been the coalition especially Turnbull’s weak political spot. What Turnbull needs to do is to neutralise this issue and that should not be difficult to achieve, particularly given the government has also been exposed as inflexible and could not even get any non-government senators on side.
I see the next election is winnable for the Coalition if it can avoid any more big political mistakes and focus on the economy, labour market and responsible government.
2009-09-11
Howard is correct on history
Comments on John Howard “Rudd demeans himself over history”, 11/09/2009, http://www.theaustralian.news.com.au/story/0,25197,26055356-7583,00.html
Howard is now calm and objective about history and he is correct except for a small point that is his IR reforms were too big and went a bit too far.
I think the number of big reforms over the past nearly three decades done by both sides of political sides in government that Howard described have really been outstanding. Both deserve credits for them. Denying either side is attempting to rewrite the history.
While Howard was politically very firm, both in opposition and in government, he become fairly pragmatic during government.
Rudd is in danger of being more politically stubborn by using the financial and economic crises to push outdated earlier Labour ideologies of big government and big spending and skewing too much against efficiency in favour of over playing equity.
He has already been exposed as having gone too far to the left. Whether he will be permanently remembered as that will depend on what he will do from now on.
The jury is still out.
Howard is now calm and objective about history and he is correct except for a small point that is his IR reforms were too big and went a bit too far.
I think the number of big reforms over the past nearly three decades done by both sides of political sides in government that Howard described have really been outstanding. Both deserve credits for them. Denying either side is attempting to rewrite the history.
While Howard was politically very firm, both in opposition and in government, he become fairly pragmatic during government.
Rudd is in danger of being more politically stubborn by using the financial and economic crises to push outdated earlier Labour ideologies of big government and big spending and skewing too much against efficiency in favour of over playing equity.
He has already been exposed as having gone too far to the left. Whether he will be permanently remembered as that will depend on what he will do from now on.
The jury is still out.
2009-09-05
Australia should continue its economic reforms
Comments on Michael Stutchbury “How we beat the recession”, 5/09/2009, http://blogs.theaustralian.news.com.au/currentaccount/index.php/theaustralian/comments/how_we_beat_the_recession/
Australia has benefited from the successful reforms from the previous successive governments, as well as China boom.
We have been able to weather the most severe world recession in many decades thanks to the past successes.
Macroeconomic policies, both monetary and fiscal, have played a useful role and contributed. Both the government and RBA should be congratulated, although the government should not over claim credits.
We should continue economic reforms to raise productivity and to stay in the front of world frontier.
Industrial relations changes are an unfinished business. The Rudd/Gillard government needs a strategy to move beyond its current rewriting of the IR laws after the next election if it retains the government, as it is expected now. There should be no complacency about that.
Relations with Asia especially with China also need to be attended closely.
Australia has benefited from the successful reforms from the previous successive governments, as well as China boom.
We have been able to weather the most severe world recession in many decades thanks to the past successes.
Macroeconomic policies, both monetary and fiscal, have played a useful role and contributed. Both the government and RBA should be congratulated, although the government should not over claim credits.
We should continue economic reforms to raise productivity and to stay in the front of world frontier.
Industrial relations changes are an unfinished business. The Rudd/Gillard government needs a strategy to move beyond its current rewriting of the IR laws after the next election if it retains the government, as it is expected now. There should be no complacency about that.
Relations with Asia especially with China also need to be attended closely.
2009-09-01
Emerson's approach to economic policies better
Comments on Michael Stutchbury “Labor the competition party?” 1/09/2009, http://blogs.theaustralian.news.com.au/currentaccount/index.php/theaustralian/comments/labor_the_competition_party/
Craig Emerson's approach is a much better one among Labour ministers including PM. We need more Labour politicians like Craig Emerson to keep Australia's economic reform on track and the Australian economy competitive internationally and Australian businesses competitive domestically too. Australia and Australians will benefit from such an approach as Emerson's.
This is especially important given what has occurred in Australian government spending that has been shown as inefficient and wasteful.
Both businesses and governments need to be competitive and should subject to effective and rigorous competition. Australia needs competition. Media, especially economic editors and reporters/journalists should scrutinise them very rigorously too.
Craig Emerson's approach is a much better one among Labour ministers including PM. We need more Labour politicians like Craig Emerson to keep Australia's economic reform on track and the Australian economy competitive internationally and Australian businesses competitive domestically too. Australia and Australians will benefit from such an approach as Emerson's.
This is especially important given what has occurred in Australian government spending that has been shown as inefficient and wasteful.
Both businesses and governments need to be competitive and should subject to effective and rigorous competition. Australia needs competition. Media, especially economic editors and reporters/journalists should scrutinise them very rigorously too.
2009-07-03
Rudd and Gillard overdone to industrial relations to be both efficient and fair
Comments on Corin McCarthy “Kev07's scab flick politics”, 3/07/2009, http://www.theaustralian.news.com.au/story/0,25197,25724259-5015664,00.html
It is always easy to attack the deficiencies of known policies and propose an alternative with unknown effects if that alternative can be dressed up as better. That is normally opposition does.
Howard did that before the 1996 election. Rudd did that in the 2007 election. They were both successful, because the public were bored with the incumbent and were looking for alternatives.
In terms of work place relations, the Rudd government had a mandate to reform the Howard unfair system. Howard just went too far. It might have been good for efficiency, but it lost the society’s value of fairness. Efficiency and fairness or equity are the two fundamental issues of the economy. They need to be balanced.
However, Rudd and Gillard do seem to have gone too far in correcting the unfairness of the Howard industrial relations system. There needs to be a place for unions. But there is also a place for individual agreements. In fact, it seems more attractive to have a dual system in the work place, so employees can choose from them, if firms are big enough.
The phasing out in a period of individual agreements can minimise the impact of Rudd / Gillard reforms, although it will not remove all the negative effects on employment as well as productivity.
It seems that the Rudd Labour government cannot see the damages of its overdone reforms to the economy and the society or will not admit them. That is a regrettable and bad for Australians. The earlier the government realise that, and the earlier it take measures to remedy them, the better it is for the economy and for Australians as a whole.
It is always easy to attack the deficiencies of known policies and propose an alternative with unknown effects if that alternative can be dressed up as better. That is normally opposition does.
Howard did that before the 1996 election. Rudd did that in the 2007 election. They were both successful, because the public were bored with the incumbent and were looking for alternatives.
In terms of work place relations, the Rudd government had a mandate to reform the Howard unfair system. Howard just went too far. It might have been good for efficiency, but it lost the society’s value of fairness. Efficiency and fairness or equity are the two fundamental issues of the economy. They need to be balanced.
However, Rudd and Gillard do seem to have gone too far in correcting the unfairness of the Howard industrial relations system. There needs to be a place for unions. But there is also a place for individual agreements. In fact, it seems more attractive to have a dual system in the work place, so employees can choose from them, if firms are big enough.
The phasing out in a period of individual agreements can minimise the impact of Rudd / Gillard reforms, although it will not remove all the negative effects on employment as well as productivity.
It seems that the Rudd Labour government cannot see the damages of its overdone reforms to the economy and the society or will not admit them. That is a regrettable and bad for Australians. The earlier the government realise that, and the earlier it take measures to remedy them, the better it is for the economy and for Australians as a whole.
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