Australian Economic Review

Name: Australian Economic Review
Creator: vLex
License: https://vlex.com/terms-of-service/

Publisher:: Wiley
Publication date:: 2021-02-01

ISBN:: 0004-9018

Issue Number

No. 57-4, December 2024

Latest documents

Decarbonising the Australian Economy Introduction
For most of the last 15 years, Australia policy on climate change has been decidedly underwhelming, leaving us behind where we need to be to fulfil our obligations under the Paris Accord. But there are encouraging signs at present that there is an emerging consensus—amongst captains of industry, different levels of government, policy‐makers and everyday Australians—that we can achieve our ambitions to live in a world that is far less reliant on carbon.
Can Australia be a Renewable Energy Superpower?
Current trade patterns reflect the low cost of transporting carbon‐intensive fossil fuels. But renewable energy is expensive to transport. In a world moving to net‐zero emissions, Australia can capitalise on its abundant renewable energy resource to process and export green minerals and fuels. With the right policy settings, Australia could not only meet its own international commitments to reach net‐zero carbon emissions by 2050, but it could make a significant contribution to the global reduction in emissions, and prosper in the process.
Can Australia Become a Green Iron Powerhouse?
As a country with an abundance of renewable resources, Australia has an opportunity to emerge as a global leader in the production of green iron rather than simply extracting and exporting iron ore around the world. While it makes sense to do so in the changing geopolitical environment, and to assist in achieving our commitments to dramatically reduce our carbon emissions, this paper sheds light on the complex technical and economic arguments for the creation of a green iron industry here in Australia. We argue that targeted government intervention coupled with industry commitment to transforming the sector could realistically result in the emergence of a nascent green iron industry in the medium term.
Challenges in the Consumer‐Side of the Energy Transition
The decarbonisation of the Australian economy relies on the transition of the electricity grid from fossil fuel to renewable sources. In this paper, we briefly summarise the logic behind the design of the National Electricity Market, the market servicing 88% of the Australian population. We then explore the challenges facing the National Electricity Market during its transition and emphasise key proposals aimed at reforming the consumer, or demand‐side, of the market. We highlight four challenges ‐ whether consumers will be active, whether retail markets can deliver contracts that facilitate efficient transition, whether the wholesale market will operate effectively and whether regulatory barriers can be quickly addressed.
Does Financial Structure Matter for Economic Growth? New Evidence from China
Following the methodology of Beck et al. in 2001 and Levine in 2002, three relative indicators are constructed to measure China's financial structure at the provincial level and these indicators are applied to explore the current financial structure–economic growth nexus in the Chinese context. The ordinary panel regression model results indicate that different dimensions of financial structure have different growth implications, while the panel threshold regression model results suggest a nonlinear relationship between financial structure and economic growth based on the stage of economic development, the relative importance of the state sector, and the financial structure per se.
Labour Market Arrangements and Competition Law in Australia: Time for Change?
As part of an ongoing review of Australia's Competition and Consumer Act (CCA) by Treasury, consideration is being given to removing the exemption from that law for conduct related to the labour market. This article considers whether there is sufficient justification to do so and, if so, how such conduct should be assessed under the CCA. No‐poach agreements are cartel conduct and other restrictive agreements may substantially lessen competition in labour markets. Nevertheless, in some circumstances there are legitimate reasons for some of these arrangements. Some suggestions are made as to how restrictive labour arrangements could be addressed by competition law.
The Dual Risks of Digital Exclusion and Unaffordability of Telecommunications in Lower‐Income Australian Households
We analyse household telecommunications spending in Australia over the period 2006–2021 using Household Income and Labour Dynamics in Australia (HILDA) survey data. We find the affordability of telecommunications is improving, and that telecommunications spending behaves like other core necessities, such as food. We find households in which members are not employed, have relatively low education, are elderly, Aboriginal or Torres Strait Islanders or immigrants, speak English poorly, reside alone, or have long‐term health conditions are at heightened risk of digital exclusion due to lower spending on telecommunications. Households located in rural areas, with children or with members that work from home are at higher risk of digital exclusion as a consequence of overspending on telecommunications. Overall, the number of people at risk of digital exclusion from inadequate spending or overspending is quite small in Australia. The risks appear to have decreased during COVID‐19. Telecommunications is a core necessity but given the small number of people at risk of exclusion, policies addressing affordability should be highly targeted.
Issue Information
Sensitive Intervention Points for Australia's Transition to Net‐Zero Emissions
Australia is not on track to meet its obligations under the Paris Accord. How can action to achieve net zero be accelerated? Here, we apply the concept of ‘sensitive intervention points’ and consider six potential interventions that could have a disproportionate impact on Australia's progress: (i) a national plan to clarify direction; (ii) a national net‐zero authority to coordinate efforts; (iii) support for a set of nationally significant projects in particular places; (iv) an industrial policy response akin to the US IRA; (v) a standard for the construction industry; and (vi) a requirement that companies develop net‐zero plans. Individually and collectively, we argue that they could plausibly accelerate Australia's trajectory to net‐zero emissions.
The Slope of the Phillips Curve and the Optimal Average Inflation Targeting Window
The slope of the Phillips curve has been shown to be flatter in recent years, including in Australia. How does this impact the optimal targeting window for a central bank conducting an average inflation targeting policy? This article shows that, in the face of the flattening of the Phillips curve, it is desirable to increase the targeting window. Doing so would lead to lower inflation fluctuations and to a non‐trivial welfare gain. In a persistently higher‐than‐target inflation, high‐interest‐rate environment, this implies that the central bank should keep the nominal interest rate higher for longer.