Trade liberalisation within the APEC region
This forum will examine and debate prospects for trade liberalisation within the Asia-Pacific Economic Cooperation (APEC) region. Over the last decade, the world has witnessed erosion in confidence in the stability of the global trading system as governed by the World Trade Organisation (WTO). The WTOs Doha Development Round has been abandoned, the Appellate Body of the WTOs Dispute Settlement Mechanism is unable to review appeals since the term of the last sitting Appellate Body member expired on 30 November 2020, and confidence in prospects for trade liberalisation have been shaken by the recent US/China trade war. This forum will examine alternative prospects for trade liberalisation through plurilateral agreements and the implementation of trade facilitation within the APEC region.
An RBA Fit for the Future?
The report ‘An RBA fit for the future’ analysed the Reserve Bank of Australia’s performance over the past 30 years and made 51 recommendations on the monetary policy framework, governance, leadership and culture of the RBA.
Some recommendations touch directly on the 3 pillars of macroeconomic policy – monetary, fiscal and macro-prudential policies.
This forum was devoted to a discussion of the recommendations and issues raised in the Report about the monetary policy framework. Will the recommendations ensure a monetary policy framework at the RBA that is fit for the future?
The first MEF for 2023 is titled Productivity. This forum will examine and debate productivity performance and policy. Productivity growth is the dominant long-run determinant of improvements in economic wellbeing. However Australia, like other developed countries, has experienced slowing rates of productivity growth in recent years. While the immediate impact of the productivity slowdown on Australian living standards has been temporarily masked by elevated terms of trade, if it continues, it presages a future characterised by slow growth in living standards and ongoing budgetary structural pressures. This forum will examine the recent history of Australia’s productivity performance, and consider the opportunities for productivity enhancing reform and innovation available to government and business across a range of economic activities, sectors, and policy domains.
Treasury’s 2023 Employment White Paper
The Albanese Government’s Jobs and Skills Summit held in September 2022 produced a number of policy recommendations to improve employment outcomes and community wellbeing, but it also acknowledged that further work was required to develop policy responses to the labour market issues confronting the nation.
As a consequence, Treasury was given the task of producing a White Paper, to be delivered late in 2023, providing “…a roadmap for Australia to build a bigger, better-trained and more productive workforce – to boost incomes and living standards and create more opportunities for more Australians.”
The scope and themes of the White Paper include:
- Full employment and increasing labour productivity growth and incomes, including the approach to achieving these objectives.
- The future of work and labour market implications of structural change.
- Job security, fair pay and conditions, including the role of workplace relations.
- Pay equity, including the gender pay gap, equal opportunities for women and the benefits of a more inclusive workforce.
- Labour force participation, labour supply and improving employment opportunities.
So, what should Treasury be thinking about in these policy domains? What are the issues and what policies do they require in response? And what policies should not be adopted?
Slides – Earnings, skills and structural change (Michael Coelli)
This forum will examine and debate tax policy. Federal and state governments face significant revenue raising challenges, both to fund the fiscal support measures necessitated by the recent pandemic, and to address future structural deficit pressures. This forum will examine whether budget repair and tax reform can be undertaken jointly. It will address tax reform in a system-wide context, examining responses to tax changes and connections across different parts of the tax system. Property tax reform has the potential to generate large economic gains. The forum will discuss detailed options for delivering state property tax reform. The implications of such reform for property prices and efficiency will be quantified and discussed.
The 2022 Federal Budget
This MEF will examine and debate the federal government budget. With an upcoming election, rising cost of living pressures, a global environment of heightened macro and security uncertainty, and following two years of fiscal support through the pandemic, this budget must navigate a challenging array of competing objectives and pressures. This MEF will examine the economic environment in which the budget will be delivered, the budget’s macroeconomic implications, potential monetary policy / budgetary policy interactions, debt sustainability, and the inferences to be drawn on the election policies of the major parties from the budget and budget reply.
The Labour Market after the Pandemic
This MEF will examine both the short-term and enduring impacts of COVID-19 on the Australian labour market. It will consider lessons for policy makers, covering labour market, macroeconomic and immigration policy.
Budget 2021/22 – A new focus on families?
The 2021 budget includes initiatives on women’s health and economic security, and promises increased spending on child care as one of its major policy announcements – a marked shift from last year’s budget, which was widely criticised as lacking a targeted response to the pandemic’s gendered labour market impacts, and the stress it caused families with caring responsibilities. Overall, will families that care for children or the elderly be better off now, and how does this vary along the income distribution? Can we expect improvements in women’s workforce participation and employment, and will the balancing of family responsibilities and work life become easier?
Economic Implications for Australia of the EU’s Carbon Border Adjustment Mechanism
In simple terms, a carbon tariff is a tax on foreign imports based on their CO2 content. Such tariffs are designed to level the playing field for domestic import-competing industries whose costs have risen due to a domestic CO2-price levied at the point of production. It is argued that carbon tariffs are necessary to avoid “carbon leakage” – local production shutting down and moving to countries without strong climate policies.
The European Union and Britain have both made commitments to make significant emission cuts by 2030 (55% and 68% compared with 1990 levels, respectively) and to achieve carbon neutrality by 2050. As part of its commitment, the EU president, Ursula von der Leyen, proposed a tariff – known as a carbon border adjustment mechanism (CBAM). The proposal was strongly endorsed by the European Parliament’s environment committee, and is due to be tabled in parliament this year.
The question addressed in this paper, is what effect an EU CBAM will have on the Australian economy. Using the Victoria University Regional Model (VURM), we evaluate those effects through to 2050 based on an EU CO2 price rising from its current level of around $70 a tonne to $120 per tonne in 2050.
Economic implications of carbon neutrality in China
China aims to curb greenhouse emissions before 2030 and achieve carbon neutrality by 2060. Using a newly developed economic model of China, CHINAGEM-Energy, we investigate the economic implications of China’s carbon neutrality path over the period 2020 to 2060. To achieve carbon neutrality by 2060, China must change its energy structure significantly. Coal and gas consumption must decline dramatically, while demand for renewable energy, especially solar and wind, must expand. In broad terms, dramatic carbon emission reduction has only a mild negative impact on China’s real GDP. China can still grow strongly, while reaching carbon neutrality by 2060. However, China’s import demand for fossil fuel will fall significantly. Since China is the second largest destination of Australia’s coal and gas exports, China’s movement to carbon neutrality implies declining demand for Australia coal and gas in the long term.
The Impact of the COVID-19 Pandemic on the Australian Economy
The Treasurer’s economic statement of 23 July 2020 highlighted the extreme uncertainty surrounding the macroeconomic outlook globally and nationally, with the course of the economy being profoundly influenced by the course the COVID-19 pandemic might take. Yet we know we are experiencing the deepest national and global recession since the Great Depression.
Will it be a V-shaped recovery, or U-shaped, L-shaped or possibly W-shaped involving a double dip? As recovery begins, more of those workers who gave up searching for jobs when the COVID-19 lockdowns began will be encouraged to re-enter the labour market, adding to the pool of unemployed. When might unemployment peak?
Australia’s services exports, including inbound university students and tourists and professional services exports such as engineering services, will be hostage to ongoing international travel restrictions. What effect will those restrictions have on national prosperity?
Understanding Australia’s Poverty Issues: A Multi-Dimensional Matter
The Forum will touch on what we know about poverty from a macro and micro economic perspective as well as take a look at some of the issues that are linked to addressing matters related to poverty.
The Banking Royal Commission has been scrutinising the behaviour of banks and other financial institutions. It will make recommendations to the government on reforms to the financial sector. The Melbourne Economic Forum will discuss possible reforms.
The Economic Challenge for the 45th Parliament
The Forum will address the economic policy challenges facing Australia in the aftermath of the federal election.
Since tax reform remains an ongoing policy issue, this Forum builds on the excellent discussion at the December Forum.