The need to forecast long term drives the Department of the Treasury to make assumptions concerning the link between population growth and GDP. But this does not make their predictions better, but they can make them worse. When I look back on my teaching days I still marvel at the gap between GDP predictions and GDP actual figures. In the 1995 when I was teaching economics to bright HSC students, GDP was only just over $340 billion. GDP per capita was $20 647. By the year 2000, GDP Was $ 415 billion and GDP per capita was rising. By 2022 the GDP Had grown to
$1327 billion, with a GDP per capita of $51 722. in 2022 that figure was estimated to be
$64 451 per capita.
How did GDP grow so much and why is GDP per capita so much higher?
The simple answer is trade. Exports dominated the economic landscape. In 2019 total mining exports were $234 billion. In 2022 the export value of iron ore and concentrates alone was $124 billion.
Australia had been lucky when China bought staggering amounts of Australian exports. The mining firms got massive profit, governments in Australia got much higher tax receipts and some Australians got very rich. By 2022, the GDP has risen to $1 676.42 billion and GDP per capita was $64 451. Suddenly Australia had a lot of billionaires and some very highly paid CEOS. Many Australians, though not all thanks to poor education outcomes, we’re reaping the rewards from high economic growth over 20 year!s. The need to make sure very high income earners pay their taxes became a burning issue as Australia’s population growth stagnated.
As for the diseconomies from global warming, there is much that needs to be redressed. The Pacific region is the most exposed region. The possible global phenomenon of a three degree increase in world temperature will
have dire economic impacts. Firstly there is food security. Global food production is likely to fall. Secondly, there are many essential items that may become inaccessible. Thirdly, there is extreme weather events multiplying. Even Japan is likely to face even more severe problems as the number of extreme weather events increases.
As for bushfires and wildfires, into the near future, there is not much that can be done to stop them, so mitigation planning is vital.
The Intergenerational Report can be the starting point of planning for future sustainable economic growth, but it must not be the ending point. In this case action speaks louder than words. Governments must fast track alternate energy initiatives,and force all economic units to become deeply conscious of the global warming that is all around us. We are past midnight and a
terrible dawn of a new, but not better, age is fast approaching.
It’s produced by Treasury, so there’s a good chance it was produced by a remotely supervised intern at PWC. That would explain the mind-numbing lack of imagination and actionable insights.
You’re right, we deserve better from our government and the APS in such strategic areas. The list of failures is now beyond tedium.
Is it not the case that our projected 'demographic cliff' in a few decades is milder than several countries (Japan, Italy IIRC) are already going through? Yet the world does not seem to have ended there.
I couldn't agree more. We continue pretending global warming is someone else's problem.
This genfear stuff may have an upside - a good opportunity to dump those tax cuts.
But would they? It seems more than just a little strange that an incoming govt would honour the pledge of the outgoing and losing govt.
Libs seem to never find this a problem.
The need to forecast long term drives the Department of the Treasury to make assumptions concerning the link between population growth and GDP. But this does not make their predictions better, but they can make them worse. When I look back on my teaching days I still marvel at the gap between GDP predictions and GDP actual figures. In the 1995 when I was teaching economics to bright HSC students, GDP was only just over $340 billion. GDP per capita was $20 647. By the year 2000, GDP Was $ 415 billion and GDP per capita was rising. By 2022 the GDP Had grown to
$1327 billion, with a GDP per capita of $51 722. in 2022 that figure was estimated to be
$64 451 per capita.
How did GDP grow so much and why is GDP per capita so much higher?
The simple answer is trade. Exports dominated the economic landscape. In 2019 total mining exports were $234 billion. In 2022 the export value of iron ore and concentrates alone was $124 billion.
Australia had been lucky when China bought staggering amounts of Australian exports. The mining firms got massive profit, governments in Australia got much higher tax receipts and some Australians got very rich. By 2022, the GDP has risen to $1 676.42 billion and GDP per capita was $64 451. Suddenly Australia had a lot of billionaires and some very highly paid CEOS. Many Australians, though not all thanks to poor education outcomes, we’re reaping the rewards from high economic growth over 20 year!s. The need to make sure very high income earners pay their taxes became a burning issue as Australia’s population growth stagnated.
As for the diseconomies from global warming, there is much that needs to be redressed. The Pacific region is the most exposed region. The possible global phenomenon of a three degree increase in world temperature will
have dire economic impacts. Firstly there is food security. Global food production is likely to fall. Secondly, there are many essential items that may become inaccessible. Thirdly, there is extreme weather events multiplying. Even Japan is likely to face even more severe problems as the number of extreme weather events increases.
As for bushfires and wildfires, into the near future, there is not much that can be done to stop them, so mitigation planning is vital.
The Intergenerational Report can be the starting point of planning for future sustainable economic growth, but it must not be the ending point. In this case action speaks louder than words. Governments must fast track alternate energy initiatives,and force all economic units to become deeply conscious of the global warming that is all around us. We are past midnight and a
terrible dawn of a new, but not better, age is fast approaching.
It’s produced by Treasury, so there’s a good chance it was produced by a remotely supervised intern at PWC. That would explain the mind-numbing lack of imagination and actionable insights.
You’re right, we deserve better from our government and the APS in such strategic areas. The list of failures is now beyond tedium.
Is it not the case that our projected 'demographic cliff' in a few decades is milder than several countries (Japan, Italy IIRC) are already going through? Yet the world does not seem to have ended there.