John Humphreys, Chief Economist at the Australian Taxpayers’ Alliance, dives into pressing Aussie economic issues. He argues for a cash flow tax to enhance investment while criticizing the NSW Greens' gas ban, highlighting its minimal environmental impact but significant cost implications. Humphreys also challenges the inefficiencies of stamp duty, revealing its huge deadweight loss. Additionally, he discusses rising government spending and its effects on productivity, painting a complex picture of Australia's economic landscape.
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Real Per Capita Spending Is The Better Metric
Measuring government size as a share of GDP can mislead because richer societies may not need proportionally more redistribution.
John Humphreys argues real per capita spending is a better measure and shows a large upward trend since 1970.
insights INSIGHT
Stamp Duty Is Exceptionally Costly
Stamp duty on property causes very large deadweight losses, far worse than GST or income tax.
CPC modelling finds marginal excess burden around $0.70–$0.80 per extra dollar raised from stamp duty.
insights INSIGHT
Inflation Falls But Productivity Matters More
Inflation has come down into the RBA target band but that alone won't fix the cost-of-living squeeze.
John Humphreys stresses real wages and productivity growth must recover to restore living standards.
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Show host Gene Tunny and Australian Taxpayers’ Alliance Chief Economist John Humphreys tackle hot topics in Australian economic policy: the case for a cash flow company tax, the politics and maths of a gas ban, why stamp duty drags the economy, the growing size of government and the cost of living crisis.
Government Spending and Adverse Effects on Economic Dynamism (8:32)
Stamp Duty and Efficiency Cost (19:42)
Inflation Data and Cost of Living Crisis (25:39)
Productivity Commission's Company Tax Reform (28:55)
Workers' Compensation and Tax Incidence (43:11)
Tariffs and Taxation (54:52)
Takeaways
Cash Flow Tax Reform – The Productivity Commission proposes cutting company tax to 20% for most firms, adding a 5% cash flow tax, and keeping the system revenue neutral—aimed at boosting investment.
Gas Ban Impact – John argues the NSW Greens’ proposal would delay global warming by only 10 hours by 2100, even under optimistic assumptions, yet could raise costs for consumers and businesses.
Stamp Duty Inefficiency – Economic modelling by the Centre of Policy Studies (CoPS) shows stamp duty’s deadweight loss at 70–80 cents per $1 raised, far worse than GST or income tax.
Government Spending Growth – The CIS’s Robert Carling claims over half of Australians now earn primary income from government sources, raising concerns about productivity and political incentives.
Hidden Tax Burdens – Workers’ compensation costs, though nominally paid by employers, often reduce workers’ wages in the long run, John argues.
Economics Explored 
