MRC Reports
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Shattered Opportunity
How property investment tax smashes the middle class.
You don’t need to be rich in Australia to be a landlord thanks to the wonders of negative gearing. More than 2.1 million Australians own investment properties and 1.3 million negatively gear, mostly men and women on moderate incomes who have seized the opportunity to build a nest-egg for retirement.
At the 2019 election Labor proposed to abolish negative gearing for all investment properties other than new ones. It also proposed to reduce the capital gains tax discount on investment property from 50 per cent to 25 per cent, increasing the amount of tax paid on the sale of a property by 50 per cent.
In effect, Labor wanted to put a sin tax on thrift. It was placing a double disincentive for future generations to invest in property, enjoy the benefits of an income stream and accumulate wealth that their parents and grandparents enjoyed. It will make it harder for young Australians to accumulate wealth over their lifetimes, forcing more future retirees onto state benefits.
Housing is the single largest contributor to the net worth of Australians. The estimated overall value of the 9.6 million dwellings in Australia is $6.5 trillion, more than double the value of superannuation funds ($2.7 trillion) and more than four times the value of Australian listed stocks ($2 trillion). Some 27% of Australian homes are privately rented, giving us one the largest pools of private rental accommodation per head of population in the world.
Unions inc. Part 1.
From industrial strength to financial muscle
How did the union movement become richer while it membership was declining? And how does advent of cashed-up, quasi-incorporated super-unions alter the industrial and political equation? We examine the transformation of the movement’s shape and purpose in the past 25 years. Unions are not, as they portray themselves, champions of the poor. They are powerful special interest groups acting chiefly in the interests of well-heeled professionals.
Unions Inc. Part 2.
Busting the myths behind flexible employment
The trade union movement claims that an increasing number of workers are being forced into insecure jobs, depriving them of workplace rights and the security of a stable pay-cheque. The ACTU’s solution to this imagined crisis is to re-regulate the labour market, reversing 20 years of largely bi-partisan reforms that began in the mid 1980s. Evidence from around the world shows this would be a disaster for the economy, and for workers.
Power on Power Off
Rebooting the National Energy Market
Australia's energy crisis is entirely government made. It is arguably the most expensive policy failure in our lifetime. Fixing this mess will not be easy. It will require federal, state and local governments to focus on the national interest. Most of all, it will require that the market is left alone to balance supply and demand and to pass on the benefits of Australia's abundant sources of energy to consumers. An inefficient energy market puts a handbrake on the economy.
Fat Chance
Why sugar taxes won't work
Does a case exist for a “sugar tax”? The Greens, the Australian Medical Association and various other public health enthusiasts from around the world say it does. The MRC commissioned the economists at Cadence to investigate the veracity of the research behind this proposal. Five papers from Australia and one from Mexico, all published in the past two years, were analysed. Their findings were underwhelming, to say the least. There is little or no evidence that this tax has any effect on either or consumption or public health.
A Hidden Carbon Tax
How bad policy drives up the cost of electricity
The benefits of decarbonising the Australian economy are well understood within the framework of scientific assumptions about the causes of climate change. The costs of such policies however are seldom articulated. This paper examines how government intervention to reduce carbon gas emissions will alter the retail price of electricity. Reducing emissions is expensive, particular if the reductions occur in the generation sector. It involves substantial investment in new generators, storage and transmission.
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