SMART Workshop: Infrastructure economics and policy: new tools for new problems

Australia and the world is experiencing rapid growth in demand for transport infrastructure projects – both public and private. These projects are complex. They require expert planning, attract massive investments and carry significant risks.  How they are regulated has enormous impact on their ability to attract investment, deliver their objectives and meet the needs of the community or investor... more

Henry Ergas, Mark Harrison and Jonathan Pincus “Some Economics of Mining Taxation”, Economic Papers, vol. 29, no. 4, December, 2010, 369–383.

Abstract:
We argue five main propositions. First, the choice between royalties and profit-based taxation involves an efficiency tradeoff, between diminished incentives to produce output on one hand, and diminished incentives to minimise costs on the other (as in Laffont and Tirole, 1993). So the Brown tax is indeed a tax, and one that reduces the incentive to mine. Next, the ex post Resource Super Profits Tax (RSPT) falls on quasi-rents as well as on rents, and therefore involves some expropriation. Third, there may be a case in favour of a retrospective RSPT or the like, but it has yet to be made persuasively. Fourth, the successor to the RSPT – the Minerals Resource Rent Tax (MRRT) – has many of the inefficiencies of the RSPT but adds some further serious inefficiencies of its own. Last, the value of revenues from taxes such as the RSPT and the MRRT is usually over-stated, as those revenues are highly risky. The failure to take account of the risky character of those income streams amounts to fiscal illusion and make it more likely that unwise spending commitments will be made.

Click the link below to download a pdf version of the full article.

Cost Benefit Analysis Course, Sydney Business School, 2-3 December 2010

The SMART Infrastructure Facility of the University of Wollongong is presenting a 2 day cost benefit analysis course aimed at executive managers and professional staff working in infrastructure related fields in government and private industry.

With increased pressure for evidence-based decision making, managers need to be equipped to carry out effective cost benefit analysis to back up their infrastructure decisions.

This unique two-day executive course takes participants through the essential elements of cost benefit analysis and equips participants to avoid common pitfalls and errors. It is a foundation course for future programs on cost benefit analysis.

The course is developed and taught by well-known infrastructure economist Professor Henry Ergas, together with Dr Alex Robson and Dr Mark Harrison, senior research fellows at the SMART Infrastructure Facility at the University of Wollongong and directors in the economics practice at Deloitte.

Click here to access more information about the course, including the full course brochure and registration form.

Henry contributes to
"The Effectiveness of Health Informatics" in
"Healthcare and the Effect of Technology: Developments, Challenges and Advancements"
Author(s)/Editor(s): Stefane M. Kabene (Ecole des Hautes Etudes en Santé Publique, France)



Click here to purchase the full version of the chapter.

This article appeared in The Review (supplement to the AFR) on the 30th of January 2009, page 3, titled "Economic certainty". The article is a speech Henry presented at the Economic Society of Australia, Canberra branch, in November 2008. 

 

The collapse of ABC Learning has prompted widespread calls for greatly increased regulation of childcare services. According to Deputy Prime Minister Julia Gillard, child care needs to be a "highly managed market", not only with regulation of service standards but also with caps on the number of places. Equally, the organisation representing independent private childcare operators, Childcare Associations Australia, has called on the Government not to allow "another childcare monopoly" to take ABC Learning's place. Central planning is in the air. To view the article click read more.

“What I'm determined to do with the cabinet colleagues is to say well, here are some performance benchmarks in terms of how this is implemented over the next three years. .. we do that and everyone's clear about what's expected of them.”
Kevin Rudd, interviewed on the ABC’s 7-30 Report, 27 November, 2007.

Time only flows one way, but many listeners to Kevin Rudd’s first post-election interview with the ABC’s Kerry O’Brien must have felt a sense of “déjà vu all over again”. Were they in Australia or in early Blairite Britain?

As an economist, it is my duty to talk about costs.
—J.B. Brigden

RISK IS INHERENT in life because life is inherently uncertain. As Peter Bernstein has put it, uncertainty simply means that more things can happen than will happen—and while some of those things are very good, others are bad and some are very bad indeed. How we deal with those bad outcomes is a crucial part of our lives as individuals and as societies. That governments have a role in helping to deal with bad outcomes is undoubted.

Henry Ergas on understanding the Howard legacy

Epochs, the German philosopher Georg Hegel said, become meaningful only as they come to an end. It is only ‘‘a shape of life grown old’’ that we can grasp and thus ‘‘paint its grey in grey’’, for it is when chapters of history come to their close that concepts and analysis can merge with practice and experience. ‘‘The owl of Minerva’’ (the Roman goddess of wisdom) therefore ‘‘spreads its wings only with the falling of the dusk’’, and as it takes flight, condemns the past to a world that ‘‘cannot be rejuvenated but only understood’’.

Risk is inherent in life because life is inherently uncertain. As Peter Bernstein has put it, uncertainty simply means that more things can happen than will happen – and while some of those things are very good, others are bad and some are very bad indeed. How we deal with those bad outcomes is a crucial part of our lives as individuals and as societies.