Entries by Geoff Le Fevre

Mercantilist and equilibrium fallacies in regional economics

The present paper discusses the divergent conclusions of two studies: that of Abelson, ‘Evaluating Major Events and Avoiding the Mercantilist Fallacy’, published in Economic Papers, and an economic impact evaluation completed in 2005 by the National Institute of Economic and Industry Research. In this case, the conflicting results are not due to major disagreements on theory: NIEIR agrees with most of the theoretical statements in Abelson’s article. Here, disagreement arises from the application of theory, or the relevance of assumptions

Energy and Environment (NER 67)

This paper first reviews the United Nations Framework Convention on Climate Change Conference of the Parties in Durban (COP-17) and discusses the global and Australian developments during the months leading up to COP-18 in Doha, Qatar in November–December 2012. The legislation progress and climate action developments of Brazil, South Africa, India, China, the USA, the European Union and Australia are reviewed. Although the Durban climate talks were able to maintain momentum in the global climate effort, it remains to be seen whether the Durban Agreement will in fact be a ‘historic breakthrough’ or a deferment of ambitious climate action into the future. Second, the paper reviews Australian climate change policy developments up to 12 September 2012.

Governing the Market: Threats to Australia’s Stability and Security

This paper was presented as a lecture in the Senate Occasional Series at Parliament House, Canberra on 8 August and represents an update of ‘The Australian Federation 2001: Political structures and economic policy’, a 2001 Alfred Deakin Lecture. The basic message here is that unless Australia adopts a middle course between the highly successful corporatist state model of development and the extreme neoliberal model that Australia has selected as its development framework, Australia’s internal stability and national security could well be severely degraded over the next two decades. In short, Australia will have to relearn and reapply some strategies and instruments to govern the market.

Income Tax Zone Rebates

Remote area zone rebates or allowances have been a feature of Australian income tax since 1945 and the social security system since 1984. In 2009, the Henry report on the tax system recommended that they should be reviewed, but no action has been taken. Zone rebates accord with each of the major purposes of the tax system. The first of these is the promotion of economic efficiency and economic development, chiefly by supporting the costs of infrastructure provision in remote areas and so assisting the pastoral and mining industries, where there is a case for compensation for the incidental effects of macroeconomic policy on these industries, and also assisting tourism, defence and indigenous development. The second major purpose of the tax system is the ability to pay principle; in this case, compensation for lower real incomes due to higher outback prices. Third is the benefit principle; that is, recognition of the higher cost of access to essential services from outback areas. As the Henry review expected, there is also a case for a review of zone boundaries, of the residence requirements and, in particular, of the rates, which have not been indexed since 1993. This paper presents the case for a review.

The Macro Melbourne Initiative Discussion Paper

In responding to the Macro Melbourne Initiative Discussion Paper, Ian Manning does not take dispute with it, but rather considers some of the same issues from a slightly different direction. The professed purpose of the Paper, as indicated in its sub -title, is to develop strategic responses to disadvantage. Despite this, the Paper itself is less ambitious, aiming to describe disadvantage in a way which will “stimulate new thinking on strategic giving and point to possible strategic investments by philanthropic trusts and corporate organizations that would address disadvantage and help prevent social problems arising”. Local Government may be added to the list of interested parties, but neither State nor Commonwealth Governments, whose policies are taken as background.

Energy and Environment (NER 66)

This paper reviews the global and Australian developments during the months leading to the Conference of the Parties of the United Nations Framework Convention on Climate Change Conference in Cancun, Mexico (COP-16) in December 2010. The legislation progress and climate action developments of Brazil, Indonesia, Africa, New Zealand, the United States and Australia are reviewed.

The Economic Impact of Public Events

The present paper examines a small and ill-defined area of government–private sector interaction: the organisation of public events. In particular, events that receive subventions from the public purse and that draw patrons from outside as well as within the subsidising jurisdiction are considered. Neoclassical economics asserts that economic policy should concentrate on leaving decisions to markets. As applied to the analysis of events, the neoclassical policy recommendation is for reliance on user charges except where there are non-economic reasons for free or subsidised provision. However, NIEIR’s analysis of event provision shows that this recommendation relies on assumptions that have not applied in most parts of Australia over the past 30 years. Instead, subventions to events that increase tourist visitation can increase incomes and employment. Thus, the case for subventions becomes one of priority against other expenditures, preferably exercised in the context of a coherent strategy for the future.