If one is to believe anything Kevin Rudd says, it is his proclamation that climate change is the greatest moral challenge of our time. Not only is it a moral challenge, it is also panning out to be the biggest ideological challenge of our time.
The Federal Budget is fundamentally – perhaps with a bit of accounting incorporated – an economic conception, right? Wrong. While in an ideal world the political implications of fiscal budgetary processes would be disregarded, the reality is that politics ultimately determines the economics of all government budgets – albeit to various extents. Perhaps paradoxically, however, economics still trumps out in the end. How so? Because the use of economics is often the best way to explain the politics behind the economics.
While last year the use of accounting manipulations was the most demonstrable element of the Federal Budget assailable for extensive analysis, this year there are myriad of components. These will now be explored – largely within the context of the economic concept of private interest theory. This theory is essentially that politicians, including Wayne Swan when preparing the budget, will make rational choices based on their own objectives when in a decision-making position. The primary objective pertaining to the budget for Swan, and by extension the Gillard Government, would ostensibly have been to deliver a well-received budget that will maximise their chances of being re-elected (or at least minimise the number of seats they lose) on September 14.
It is often said that an affluent society is best judged by how it treats its most vulnerable citizens. This honourable barometer tends to bring to mind notions of charity and generosity rather than a contemplation of the broader social benefits of investing in the underprivileged. When in fact, expenditure directed towards the disadvantaged has far-reaching economic and social returns that often go unconsidered.
Funding for addressing disadvantage is too often placed in the basket of ‘social programs’, which gives the community the erroneous impression that it has nothing to do with the economy. However, as proponents of the proposed National Disability Insurance Scheme will tell you: it’s not about philanthropy, it’s about investing in people through empowerment and participation.
Whilst the reputation for the intern experience is one of fetching coffees for superiors and photocopying a litany of documents, the experience I was fortunate to have at the Grattan Institute over Summer 2012/13 will be one to remain with me for years to come.
Founded in 2008 with financial endowments from the Federal and State governments, BHP Billiton and in kind support from the University of Melbourne, the Grattan Institute has sought to carve out a role as one of Australia’s most significant think tanks, specifically focused on public policy. Since founding, it has released a variety of influential reports on key policy issues with its most notable work released last year concerning the significant reforms that could unleash a new wave of economic growth in Australia.
In microeconomic theory, consumers and producers make up two halves of a productive economy. In such a model, even traditionally marginalised groups can be categorised as consumers or producers, or both.
Specifically, the homeless, who typically have very limited economic productivity and hence income flow, should be thought of as consumers with their own preferences and utilities. This perspective is essential for communities and NGOs when determining financial strategies to minimise homelessness. Using basic consumer theory, I will compare the results of cash and in-kind transfers given to the homeless.