Invest
Populist lesson for Aussie economy
With Brexit and the election of Donald Trump both riding the growing wave of populism around the world, an economist has warned Australian politicians to take note.
Populist lesson for Aussie economy
With Brexit and the election of Donald Trump both riding the growing wave of populism around the world, an economist has warned Australian politicians to take note.
Economist and senior fellow of think tank Per Capita Stephen Koukoulas says the populist victories of 2016 demonstrate the dangers inherent in globalisation without compensation.
“There is a net benefit of global trade [but] it’s pretty clear what happened with globalisation is that the economic theory didn’t turn out in practice because the benefits of trade were accruing very strongly to the top end of town,” Mr Koukoulas told nestegg.com.au.
“The theory is that you specialise, compensate the losers and the economy is net better off, but the problem was that while our economies were better off, [the benefits] didn’t get to the people who were hurting.”
In the aftermath of the Brexit result, a breakdown of the vote showed that the ‘Remain’ and ‘Leave’ votes were largely cast along socio-economic lines, with those left behind in working class areas more likely to vote to leave the EU.
Source: BBC, Brexit vote by area
Meanwhile in the US presidential elections, Trump’s victory was partly attributed to his appeal in ‘Rust Belt states’, with his anti-trade rhetoric striking a chord with those hardest hit by the loss of manufacturing jobs.
“It reveals a lot of inequality and redistribution issues, and it shows that the people who do lose from globalisation [need to be] compensated through spending, tax cuts and these sorts of things that will stop them being so pissed off that they’ll vote for someone like Trump,” Mr Koukoulas said.
“If some of that wealth creation from globalisation had, through government policy, health, education, and tax policy, been allocated towards lower income earners or those particularly suffering the fallout from their industries shutting down in the US, the UK and Australia even, then we wouldn’t have this groundswell of support for these fringe players.”
With 2016 demonstrating the heavy political cost of a disenfranchised working class, Australian politicians may have to re-evaluate their economic policies.
“I think Australian politicians have taken note of all this and are trying to work out what it means. Both parties want to win the next election and they’re working out they can avoid a Trump or Pauline Hanson undercutting them one way or another,” Mr Koukoulas said.
“Maybe we’re going to have more progressivity in the tax system as a means of dealing with this problem from the major mainstream political parties in Australia. Maybe that is the solution.”
Property
Millennials believe first home buyers need more support
Australia’s up-and-comers in the housing market say more needs to be done to slow rising house prices. ...Read more
Property
3 in 4 borrowers in trouble are in lockdown: ANZ
Despite offering support, ANZ said freezing home loan repayments will be the last resort, as three in four requests for support stem from NSW. ...Read more
Property
RBA gives APRA’s use of macro tools a tick of approval
Ahead of an expected move to impose tougher lending rules on the banks, the Reserve Bank has looked into previous attempts by APRA to cool the housing market. ...Read more
Property
Federal incentives are driving more first home buyers into the market
While property prices continue to grow, new research suggests that the government’s current crop of first home buyer incentives is having an impact on this segment of the market. ...Read more
Property
Why it now costs 130% more to service a mortgage than 3 decades ago
The lifetime cost of owning a home has increased by over 130 per cent in just three decades, new research has revealed. ...Read more
Property
Using the 30/30/3 rule for home buying during uncertain times
Thinking of buying a home? Uncertain economic times may have you double guessing your purchase, but the 30/30/3 rule can help you make this a reality. ...Read more
Property
Rental yields reach decade high, but not all markets move at the same pace
Changing consumer preferences towards lifestyle destinations and a lack of supply have led to record national price growth, albeit price fluctuations vary region-to-region, fresh figures show. ...Read more
Property
What younger Australians are getting wrong about home loans
As young Australians look to fight the odds and take their first step onto the property ladder, more and more are making easy mistakes. ...Read more
The Olympic effect on property and equity investors; COVID-19 Disaster Payments and super
Listen now
Do lockdowns boost property prices? Are short-sellers levelling the playing field? Did you lodge your tax returns early?
Listen now
Will lockdowns halt the housing boom? Is the metaverse taking over? And the cons of lodging your tax returns early
Listen now
Are you being priced out of the market? Have you got the Tuesday blues? And are you ready for the upcoming super changes?
Listen now
Property
Millennials believe first home buyers need more support
Australia’s up-and-comers in the housing market say more needs to be done to slow rising house prices. ...Read more
Property
3 in 4 borrowers in trouble are in lockdown: ANZ
Despite offering support, ANZ said freezing home loan repayments will be the last resort, as three in four requests for support stem from NSW. ...Read more
Property
RBA gives APRA’s use of macro tools a tick of approval
Ahead of an expected move to impose tougher lending rules on the banks, the Reserve Bank has looked into previous attempts by APRA to cool the housing market. ...Read more
Property
Federal incentives are driving more first home buyers into the market
While property prices continue to grow, new research suggests that the government’s current crop of first home buyer incentives is having an impact on this segment of the market. ...Read more
Property
Why it now costs 130% more to service a mortgage than 3 decades ago
The lifetime cost of owning a home has increased by over 130 per cent in just three decades, new research has revealed. ...Read more
Property
Using the 30/30/3 rule for home buying during uncertain times
Thinking of buying a home? Uncertain economic times may have you double guessing your purchase, but the 30/30/3 rule can help you make this a reality. ...Read more
Property
Rental yields reach decade high, but not all markets move at the same pace
Changing consumer preferences towards lifestyle destinations and a lack of supply have led to record national price growth, albeit price fluctuations vary region-to-region, fresh figures show. ...Read more
Property
What younger Australians are getting wrong about home loans
As young Australians look to fight the odds and take their first step onto the property ladder, more and more are making easy mistakes. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
