Cricket’s Crystal Career Ball

May 27, 2010

Kevin Rudd reckons the fall in the Australian dollar has nothing to do with his new resources tax. So how does he explain this?

Sure – lots of other currencies have fallen against the USD – but not as much as ours has. Do the calculations yourself at Google Finance.

The Aussie dollar isn’t the only casualty of the resources tax. Treasury’s reputation for impartial advice has been shredded!

A fortnight ago I told you about the dodgy stimulus graph from Treasury discovered by the IPA’s Sinclair Davidson. Now there’s Treasury’s dodgy mining tax rates – this is Sinclair from the Catallaxy Files (a great website if you want to know the economics that no-one else is brave enough to write about).

While we raise taxes – New Zealand is cutting them. Their budget last week cut the top marginal rate on personal income tax to 33% (yep – that’s 33% – our top marginal rate is 45%) and cut company tax to 28%. They did this by increasing their GST from 12.5% to 15%.

I’m still getting great feedback on Chris Berg’s Sunday Age piece on what pigs can teach us about capitalism – he was inspired by Leonard Read’s famous 1950’s essay I, Pencil (if you haven’t read it before – you should – it’s about 2000 words). Here’s a video of Milton Friedman telling the I, Pencil story.

Ever wonder why things (your life, your work etc) don’t go your way?
It’s not your fault.
It’s luck.
This paper What Can International Cricket Teach Us About the Role of Luck in Labor Markets is getting lots of publicity. It’s fascinating stuff – it’s by two IMF economists. They analysed the record of every Test cricketer who debuted between 1950 and 1985. And their conclusion? Basically if you’re lucky enough to debut at home you’ll do better than if you debuted overseas – AND you’ll continue to do better.
Here’s what the Freaknomics guys at The New York Times said about it last month.

Here’s what IPA staff have been talking about this week: In Tuesday’s Age, Sinclair Davidson summed up what’s wrong with the mining tax, and on The Drum, Chris Berg looked at defence spending waste.

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