Other economics
Australians’ views on economic policy – we like big government but we don’t want to pay for it
The most recent Essential poll has a number of questions on the way we see our political and economic systems, summarised below.
Our political system needs fundamental change, according to 40 percent of respondents, and another 48 percent believe it needs “some reform”, leaving only 12 percent who believe it is working well. Labor voters are more inclined to believe it’s working well (they’re in power), and those who feel comfortable with their personal financial situation believe it’s working well. It would be useful to know in which aspects people believe our system isn’t up to scratch.
We believe the government has a great deal of capacity to reduce costs, particularly in areas where governments have direct involvement such as health care. That’s not unexpected, but 76 percent of respondents believe governments can have a large or moderate impact in reducing the costs of “groceries and essentials.” Women are more inclined than men to believe that governments have such powers, and people who have financial difficulties are the most inclined to believe governments have such powers.
We’re well aware that the gap between rich and poor is widening. Unsurprisingly those who are comfortable with their financial situation are least aware of the gap. Surprisingly, however, older people are more aware of the gap than younger people.
There is a question about our understanding of the need for counter-cyclical economic management. Essential seems to have messed up their reporting on this question, but it appears that at least half of us understand how counter-cyclical spending works.
Respondents are asked what they believe to be the most important drivers of financial success. “Hard work” comes out on top, followed by “education”, “family wealth and inheritance”, and “social connections”. Greens voters are the most cynical about the idea that hard work and education provide a path to success. (Cynical or realistic?)
Respondents are asked for their views on 7 different government measures. We’re a fairly interventionist lot: 70 percent of us would like to see price caps on essentials. That’s followed by higher taxes on large corporations, lower income taxes, more funding for social services, and more generous unemployment benefits. At the bottom of the list is “reduce tax breaks like negative gearing for property investors – but even so, with 51 percent support and 17 percent opposition, it enjoys a net acceptance. In the middle of the list respondents are asked about fiscal policy generally: 59 percent believe that the government should run budget surpluses to reduce inflation. The conclusion we can draw is that we’re strongly supportive of redistributive policies, provided they don’t involve paying more in income tax – the classic contradiction. On these questions we might expect to find some “left”-“right” differences, but Coalition and Labor voters are very similar in their responses. Only Greens voters seem to be a little bolshie.
Respondents are asked if they own or intend to buy an electric vehicle. “I don’t own an EV and I don’t intend to purchase one” is the dominant response (62 percent). There is a related question on support for a road-user tax on EVs, but it’s not very revealing because of small sample sizes.
The consequences for Australia of a Trump victory
Peter Martin has a Conversation contribution From mass deportations to huge tariff hikes, here’s what Trump’s economic program would do to the US and Australia. Although the title includes Australia his article is mainly about the consequences for the US economy if Trump implements his promised policies of deportations, high tariffs, and presidential control of interest rates.
Martin describes how Trump’s policies have been run through a standard and respected economic model which finds the country to be most hurt by his policies would be the US itself, manifest in high inflation and capital flight.
Surprisingly it would result in a higher US Dollar, because of the impact of protectionism. This would hurt China (a specific Trump intention supported by his zero-sum view of world trade) and therefore it would hurt Australia as a supplier to China.
The model from which Martin draws his predictions shows a comparatively minor effect on Australia – an economy that by 2035 would be only 0.06 to 0.20 percent weaker than it would otherwise be.
Martin doesn’t go further into possible economic consequences of a Trump presidency – policies developed by an entirely politicized and inexperienced public service, and the possibility that he would pursue a reckless fiscal policy that would cause a global collapse in confidence in the US Dollar.
A health check on general practice in Australia
Each year the “Royal” Australian College of General Practitioners produces a Health of the Nation Report. It’s more about the health of general practice than the health of the nation, but that’s important, because GPs are generally where people access our bewilderingly complex health system, and if GP services are working well, pressure is eased on other parts of health care, particularly our over-stressed hospitals.
This year’s report is about general improvements in the conditions for GPs, but that’s from a low base. Their pay in comparison with other medical specialists is low. That differential worsened when the Coalition government, in an arbitrary decision, decided to freeze Medicare rebates for GPs. Their pay has been partly restored by the present government’s decision to provide incentives for GPs to bulk bill patients under 16 years old and those who hold Commonwealth concession cards. Those incentives have worked in lifting the bulk-billing rate (but they have taken Medicare a little further away from its original model of universalism). The report also notes that more people are putting off GP visits because of the cost.
The report notes that GPs are consistently reporting that the most common health issues they manage are mental health related: 71 percent of GPs report psychological issues in their top three reasons for patient presentations. This means consultations have become longer, and Medicare rebates do not cover this development.
It reports that conditions for GPs are improving, but there are still large administrative burdens. Burnout is still a problem, and too few medical graduates are choosing general practice, although the situation is improving a little. And there is a complaint about “role encroachment by other health professionals”. (Most professionals are grateful to be relieved of some of their routine tasks.)
Their recommendations to government for more funding and more university places are predictable – and easily justified.
The RACGP has a short summary of the report, and the full report is available separately.
Universities ranked
The Times World University Rankings 2025 came out on Wednesday. By now we might have expected to find at least one Conversation contribution, but perhaps the finding that all but one university (the University of Melbourne) have slipped in their rankings has discouraged contributors.
Holding at #39 -- University of Melbourne
The Times Higher Education Chief Global Affairs Officer Phil Baty gives a short account (8 minutes) of the rankings, particularly as they relate to our universities, on Radio National Drive: Australian universities plunge in international rankings. He explains that one reason rankings of our universities have slipped, as have universities in many other countries, is because there are more universities in Asia now making their way into the top rankings: two Chinese universities are now in the top twenty. A slip in ranking does not always indicate a slip in standards.
Rankings count, however, because they are influential in attracting students and research funding. Also most of our universities are probably slipping in absolute terms, because they are struggling financially.
He explains that the problem is inadequate core funding. As we have seen the business model of cross-subsidizing research and domestic students with overseas students is fragile.
Readers will probably dip into the rankings to see how their alma mater has performed (You can filter results by country). The University of Melbourne holds its place at #39. The “Group of 8” (Melbourne, Monash, Sydney, ANU, Queensland, UNSW, Adelaide, Western Australia) come in ahead of other Australia universities.
A glance at those rankings reveals that the top-ranked universities have student-to-staff ratios of around 10:1, while the ratios for our universities are more like 30:1. Of course we expect universities that excel in research, such as Harvard and Oxford, to have low ratios in comparison with universities more engaged in teaching, but this disparity is worth researching. Australian academics are finding the teaching workloads overwhelming, and undergraduates are often complaining about large or non-existent tutorial classes.
The core issue is funding. In its war on learning the Coalition left our universities severely under-funded, and the current government has not rectified the situation. Distributional justice would be served if the government raised more tax to fund higher education, particularly if those taxes are collected from well-off older Australians, including wealthy retirees who enjoyed the benefits of free or low-cost tertiary education in their youth.
Bread and circuses, football and music
Football stadiums feature strongly in Australian elections. In the current Queensland campaign the LNP opposition promises to re-build or revamp the Gabba. In the current ACT campaign the Liberals promise to build a new stadium and Labor is promises to upgrade an existing one and is hinting that it will build a new one. In the Tasmanian election earlier this year construction of a football stadium was central in the campaign in a rather messy way (see the roundup of 18 May for “The shonky economics of football stadiums”).
The Australia Institute has a short post The Carnival is Over: music festivals struggle as football roars, showing that while live music has struggled to survive, the AFL and NRL have never had it so good, thanks to generous treatment by governments. Tax exemptions, originally designed to encourage community participation in sport, have been used to subsidize people watching league football. That’s in addition to direct capital contributions for stadiums.
That’s one reason why ticket prices for live music are so much higher than tickets for football.
A further contrast is that young people at live music events are usually dancing (even if not very elegantly), while at football fans are sitting on their bums. That original public health tax subsidy should be reversed.