The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Tuesday, May 10, 2011

RBA message: govt needs to get out of the way

In the post below, my friend shows how the change in the government's fiscal position as a share of GDP has been expansionary. Just as worrying is this chart from the RBA's latest Statement on Monetary Policy, which illustrates that government consumption (and investment) as a share of GDP is still way higher than it has been in previous years. In short, the message is that the public sector should get out of the way and stop competing with the private sector for resources. Now, the exception here is public investment in infrastructure. There is limited scope for the private sector to fund this, and so we do need government working together with private capital to jointly address Australia's chronic infrastructure deficiency. Remember: we will have 60% more people living here within four decades...More on this point later.