Justin Pyvis
Justin has a PhD in Economics and over 20 years of experience in applied economic, policy and investment analysis with the WA Treasury and AECOM in Perth, and Aletheia Capital in Hong Kong. He writes Aussienomics in between freelance gigs and work on a book covering the policies that create the conditions for prosperity.
2024
I thought I’d kick the year off by commenting on perhaps the biggest issue facing the average Australian last year, and one that looks set to continue in 2024: inflation and the cost-of-living crisis. According to the ABS:
2023
The numbers are in: in 2022-23, Australia’s population grew by 624,100 people, or around 2.4%. That’s a huge figure – a record, in fact – and it was driven by the net addition of 518,090 overseas migrants. As you might expect, the media jumped all over it:
When COVID-19 struck, the Australian government – along with just about every government around the world – unleashed unprecedented support for workers who were at risk of losing their jobs due to the various health-related restrictions on business activity. One of the talismans of the Scott Morrison/Josh Frydenberg government’s response was JobKeeper, a scheme formulated by Treasury’s Jenny Wilkinson, for which she was later awarded a Public Service Medal.
Australia has a long and successful history of immigration. Migrants contribute economically, help fill labour shortages, improve the country’s demographics and provide important cultural diversity. But as countries like Sweden have learned, migration can also present significant challenges.
Whether immigrants fuel inflation is a complicated question, in part because there’s no single, uniform “immigrant”. Immigrants can be students, skilled workers, entire families, refugees, retirees, or backpackers. Their ages also vary, as do their consumption, savings, and working patterns.
Ah, the age-old question: does money buy you happiness? The general consensus is yes – to an extent. For example, surely the happiness a person gets from their billionth dollar is less than what they derived from their first dollar?
When you create a system that makes it costly to do things ‘by the book’ – common examples are drugs, guns and more recently, building houses – you alter the incentives that individuals face in their day-to-day lives. In the case of housing, strict planning and zoning laws create positive transaction costs, raise the price of houses, and increase the payoffs for criminality.
Denmark has a housing problem. Not Denmark the country, but Denmark Western Australia – population 2,375 – which happens to be the least affordable town in the state and “ one of the most inefficient communities in WA when it comes to the balance between large family homes and smaller dwellings, with a ratio of 1.22 bedrooms per resident”.
US President Joe Biden recently passed an executive order regulating artificial intelligence (AI), which was met with mixed reactions. A common criticism is that the order was highly prescriptive – it assumed a lot a about the future direction of AI, even though it’s a huge unknown.
Andrew Leigh delivered a great speech to the Economic Society of Australia in Canberra last week (alas I was not in attendance), in which he outlined his ‘Ten Lessons for Economic Policymakers’ in detail.