A bit of catching up

Here's a few things that caught my eye last week, but about which I did not have time to post:

*  Greg Jericho looked at what the government can do to increase revenue via taxation in his usual calm and measured way.   Interesting, he includes an international comparative table of combined government expenditure that shows that, as a percentage of GDP in 2012, Australia is actually way, way down the list.   Amongst the highest spending countries are some of the European social democrat ones like Sweden, Denmark and Finland.  The figure for Sweden is surprising at 52% of GDP, as the Washington Post noted late last year that the country had made big cuts:

Sweden’s economic growth has been much higher than that of the rest of Western Europe, or the United States, since 2006. Data from the International Monetary Fund and the Organization for Economic Cooperation and Development show that Sweden has one of the lowest inflation rates in Europe; it runs a budget surplus every year; its corporate tax rates are considerably lower than U.S. rates; and it spends more on research and development, as a share of its economy, than we do. Its firms are highly competitive in the world economy, and it runs sizable current-account surpluses.

After its crisis, Sweden reduced public expenditures by 20 percent of its gross domestic product, slashing social transfers such as unemployment benefits and sick-leave compensation. It cut its public debt in half (its debt, as a proportion of the economy, is now about half that of the United States).

So is it the case that Sweden is still a big spender of government money internationally, even after it changed tack somewhat?   I think so, but doesn't the IPA tell us that big government spending as a percentage of GDP is always bad, bad, bad?


*  Speaking of the IPA, Julie Novak apparently did her PhD on government size:

The thesis was entitled “The economic consequences of the size of government in Australia” and she found inter alia that an increase in government size by ten percentage points is associated with a lower annual GDP per capita growth rate of between 1.2 and 2.5 percentage points.

I wonder if the Scandinavians got consideration in it?  Or is Australia just meant to be a special case?

Anyway, consistent with her faith based ideology that taxation is always, always to be reduced, she naturally wrote against increasing the GST in The Drum, a government funded mouthpiece for the IPA which the IPA wants the government to defund.   Funnily enough, she complains about the regressive nature of the GST:

Another dimension of the GST debate which perhaps deserves more attention is that the poor, who generally pay little in income taxes in any case, are likely to financially suffer as a result of increasing the GST because more of their disposable incomes are directed toward everyday consumption items.

Yet, aren't the IPA types always complaining about how its only the rich who are paying all the taxes?   I got the distinct impression they wanted the poor to pay more to pay their way.  

And, what's more, Sinclair Davidson tweeted last week (with apparent approval) a column in the AFR with the title: "‘Regressive’ claim against GST does not stack up."

So who from the IPA do I believe?   Get your act together, fellas; you're not even consistent now.


*   So, Tony Abbott is back from his square gaiting tour of Asia.  There seems to me to be an awful lot of unqualified praise for "free trade" agreement that takes 15 years to fully kick in, and it is a curious thing that only a few commentators have pointed to the Productivity Commission's 2010 skepticism about such bilateral agreements But the mere fact that such diverse commentators as Bernard Keane and Terry MCrann are on the same skeptical side indicates to me that the skepticism is probably well deserved.

And here are a couple of more skeptical takes: from the Canberra Times and Sydney Morning Herald (both Fairfax outlets, yet the general gist of their political commentary has been to celebrate the deals as a triumph.) 

In fact, prolific blogger on journalistic matters Mr Denmore has been pretty furious about the general journalistic preparedness to read out scripts prepared by (presumably) Peta Credlin on the trade agreements.  I think it clear that he has a point.

Update:   Ha!  Of course it couldn't last.  Terry McCrann, who works for Rupert, naturally has to get in line and praise the Abbott trip to high heaven.

Mind you, I am not at all surprised that the Chinese find an Abbott visit a more pleasant experience than one with 

And I forgot before - not much skeptical commentary around about Abbott flying the kite about joint military operations with China.   Where did that come from?   Was they any spluttering over morning coffee at Russell Offices when they read that?