1999 Annual Report - Melbourne Institute by The Faculty of Business and Economics, The University of Melbourne

MELBOURNE INSTITUTE OF APPLIED ECONOMIC AND SOCIAL RESEARCH

Annual Report 1999 and Outlook 2000â&#x20AC;&#x201C;2001

Melbourne Institute of Applied Economic and Social Research Level 7, Economics and Commerce Building The University of Melbourne Victoria 3010 Australia Phone: (03) 8344 5330 Fax: (03) 8344 5630 Email: melb.inst@iaesr.unimelb.edu.au WWW: http://www.melbourneinstitute.com

CONTENTS Some Highlights ........................................................................................................................................ 3 Introduction to the Melbourne Institute.................................................................................................... 4 Director’s Report....................................................................................................................................... 6 Outlook for 2000 and 2001....................................................................................................................... 8 Staff, Associates and Research Students................................................................................................... 10 Advisory Board ........................................................................................................................................ 12 Research Areas........................................................................................................................................ 14 Macroeconomics and Business Cycle Analysis .................................................................................... 14 Labour, Social and Fiscal Studies ...................................................................................................... 15 Enterprise Performance Research ...................................................................................................... 17 Contributions to Policy Analysis and Debates.......................................................................................... 18 Melbourne Institute Business Economics Forum ..................................................................................... 20 Melbourne Institute Public Economics Forum......................................................................................... 22 Conferences............................................................................................................................................. 23 Publications by Subscription ................................................................................................................... 25 Staff Publications, Seminars, Presentations and Media Coverage ............................................................ 29 Finance and Performance Indicators ....................................................................................................... 39

2000 The University of Melbourne, Melbourne Institute of Applied Economic and Social Research

COPYRIGHT: All rights reserved. Apart from fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright Act 1968, no part of this publication may be reproduced, stored or transmitted in any form or by any means without the prior permission in writing of the publisher. ISSN 1441–1423 Desktop publishing by Melbourne Institute of Applied Economic and Social Research, The University of Melbourne (Nellie Lentini) Printed by Impact Printing

SOME HIGHLIGHTS • Vigorous ongoing contribution to debate on

unemployment • Important conference and associated book on the

“Policy Implications of an Ageing Population” (jointly with the Productivity Commission) • Director appointed to the Reference Group on

Welfare Reform • Final report produced on the efficiency and equity Melbourne Institute Business Economics Forum discussion

effects of the Government’s tax reform package • Economic forecasting performance becomes

increasingly widely recognised • Book on How Big Business Performs: Private

of the book on the ageing population. From left: Professor Peter Dawkins (Melbourne Institute), Dr Graeme Woodbridge (Productivity Commission), Professor John Creedy (Melbourne Institute), Professor Jeff Richardson (Monash University), Dr Anna Howe (Australian Association of Gerontology)

Performance and Public Policy launched at conference on “Big Issues for Big Business” • Important advances in frontier techniques presented at a conference on “Forecasting and

Business Cycle Analysis” • Relationships maintained and extended with relevant private and public organisations and

community groups such as Westpac, William M. Mercer, IBISWorld, Mercantile Mutual, Reserve Bank of Australia, Department of Family and Community Services, Department of Employment, Workplace Relations and Small Business, Productivity Commission, Australian Taxation Office, Victorian Department of State Development, CEDA and the Brotherhood of St Laurence

Performance Indicators Melbourne Institute performance indicators registered increases in: • National competitive research grants

• Other research funding

• Total external research income

• Subscriptions to Melbourne Institute products

• Articles in refereed journals

• Total publications

• Media references Melbourne Institute staff published 41 articles in refereed journals including Fiscal Studies, Manchester School, International Tax and Public Finance, Scandinavian Journal of Economics, International Journal of Management Reviews, Journal of Quantitative Economics, History of Economics Review, Economic Analysis and Policy, Economics Letters, The Journal of Contemporary Issues in Business and Government, Australian Economic Papers, Applied Economics, Australian Social Monitor, The Australian Economic Review, Australian Social Policy, The Economic Record, Economic Papers, Economic and Labour Relations Review, Australian Journal of Labour Economics, and Review of Political Economy.

INTRODUCTION TO THE MELBOURNE INSTITUTE Vision, Mission, Focus, History and Strategic Objectives Vision To help the world to see economic and social issues more clearly, and to foster a hard-headed but softhearted approach to economic and social modelling, indicators and policy analysis.

Mission The Melbourne Institute seeks to build highly skilled and focused research teams to conduct nationally and internationally recognised, independent and impartial research on economic and social modelling, indicators and policy analysis. It aims to be important for government, business and community groups in Australia, as well as a leading academic centre of excellence, by producing high profile and high quality publications and reports, holding valuable conferences, seminars and briefings and contributing strongly to public policy analysis and discussion. It also seeks to develop distinctive world class intellectual property and to transfer some of that to other countries, especially those in the Asia-Pacific region.

Focus Unifying Theme The unifying theme of the Melbourne Instituteâ&#x20AC;&#x2122;s research agenda is to examine the determinants of both economic performance and social outcomes, and to explore the mutual relationship between the two.

Expertise and Intellectual Property The Melbourne Institute’s expertise and intellectual property lie in: •

economic and social modelling

•

economic and social surveys and indicators

•

economic and social policy analysis

Research Programs The Melbourne Institute’s expertise and intellectual property are especially focused on the following research areas: •

Macroeconomics and Business Cycle Analysis

•

Labour, Social and Fiscal Studies

•

Enterprise Performance Research

History The Melbourne Institute was formed in 1962 under the leadership of Professor Ronald Henderson. It was the first economics research institute in an Australian university. Henderson built up an organisation with about 40 staff by the early 1970s. It engaged in a wide range of research areas including macroeconomic forecasting, financial economics and social economics, and is best remembered for its work on poverty and the development of the “Henderson Poverty Line”. After the Henderson era, Professor Peter Dixon was appointed Director and, after some restructuring, the new Institute based its operation around Dixon’s ORANI model of the Australian economy. In the early 1990s, Peter Dixon and a number of his senior colleagues left the Institute to join Monash University. This necessitated a second period of adjustment and restructuring initiated by Professor Richard Blandy who was Director from 1992 to 1994. The current Director, Professor Peter Dawkins, took up his position in January 1996. With his senior management team and in association with the staff and the Advisory Board, he developed a strategic plan with the unifying theme being the link between economic performance and social outcomes. The first version of this plan was for the period 1996–2000 and is updated annually.

Strategic Objectives In 1999, the Melbourne Institute had ten objectives in its strategic plan: 1.

to be the central focus of applied economic and social research on economic performance and social outcomes in Australia (umbrella objective);

to be an Australian leader in economic and social modelling;

to be the best known and most highly regarded supplier of economic and social indicators in Australia;

to contribute strongly to economic policy analysis, discussion and development in Australia;

to be a centre of postgraduate training in applied economic and social research;

to achieve outstanding academic standards for its research output, and to be a leader in Australia and the AsiaPacific region in its specified research programs;

to be widely regarded as one of the outstanding sources of applied economic and social research to be available under contract to business and government;

to produce a range of high quality publications (eg. books, journals, newsletters, working papers);

to provide information, commentaries and advice to business and government clients; and

10. to expand the Melbourne Institute’s research activities into other countries in the Asia-Pacific region.

DIRECTOR’S REPORT Introduction: Hard Heads: Soft Hearts The aspiration to undertake high quality, hard-headed, economic and social analysis to shed light on the determinants of good social outcomes continues to shape the research agenda of the Melbourne Institute. Our vision is to help the world to see economic and social issues more clearly and to foster a hard-headed but soft-hearted approach to economic and social modelling, indicators and policy analysis. In 1999, a number of important economic and social issues captured our attention. Unemployment continued to be an important focus. As one of the “five economists” who wrote to the Prime Minister on this subject in 1998, writing and talking about this important issue continued to be important in my activities in 1999. Further, we were successful in obtaining an ARC grant (in association with three government partners) to undertake a major project on “Unemployment: Modelling and Policy Analysis” in 2000 and 2001. The partners are the Department of Employment Workplace Relations and Professor Peter Dawkins Small Business (DEWRSB), the Department of Family and Community Services (FaCS), DIRECTOR and the Productivity Commission. The aim is to develop a range of modelling tools which will enable us to simulate the effects of alternative policies aimed at reducing unemployment. Meanwhile, the Australian economy has continued on a strong growth path and unemployment is declining gradually. Some economic forecasters have been suggesting the economic outlook is softening significantly and unemployment will not continue down much further. The Melbourne Institute’s macroeconomic forecasts, however, produced by our Centre for Business Cycle Analysis, continue to suggest a strong outlook with unemployment coming down towards 6 per cent, albeit still a high level after eight or nine years of strong economic growth. Our forecasting model has been performing very well since its inauguration in 1997, so I think there is a good chance it will be about right. In 1999, our Centre for Business Cycle Analysis not only further cemented its reputation for reading the economy, but made some important advances in research on the nature of business cycles that are being recognised internationally. Another important development was the organisation of a conference in March 1999 with the Productivity Commission on the important topic of “Policy Implications of the Ageing of Australia’s Population”. The proceedings were published as a book and became the focus of two of our Forums later in the year. Another feature of 1999 was the publication of our book on How Big Business Performs: Private Performance and Public Policy, the culmination of a major research project analysing the IBIS data base on large Australian enterprises. Another publication that drew on the IBIS data base and a new survey of Australian firms was on the Contours of Restructuring and Downsizing in Australia. The launches of both publications engendered a great deal of interest and good coverage in the media. We have also been delighted by the very positive reviews that How Big Business Performs: Private Performance and Public Policy received in scholarly journals. Our research agenda on enterprise performance continues and now encompasses small and medium as well as big business. These are some prominent examples of our research in 1999. A more extensive description follows in this report.

Our Three Research Areas and Outlook 2000–2001 We are now focusing on three research programs with one of them, Labour, Social and Fiscal Studies, incorporating three of the five areas that we operated in 1998. The three programs are Macroeconomics and Business Cycle Analysis; Labour, Social and Fiscal Studies; and Enterprise Performance.

In these three areas, we aim to build highly skilled and focused research teams to conduct nationally and internationally recognised, independent and impartial research on economic social modelling, indicators and policy analysis. We also seek to contribute strongly to public policy analysis and discussion. In 1999, we were very active in each of the three areas. Some highlights were noted above and more details are provided in what follows later in this report. We also present our outlook for 2000–2001 on pages 8 and 9.

Staffing In the course of 1999, a number of new staff joined the Melbourne Institute. These were Dr Mariah Evans as Senior Research Fellow, and Ms Yi-Ping Tseng as Research Fellow. Three staff members were promoted to Senior Research Fellow: Dr Peter Summers, Dr Elizabeth Webster and Dr Mark Harris. Ms Anne Leahy, formerly a senior economist at BHP, joined the staff to work on public relations and contribute to our research activities. We also made some new appointments of senior researchers to join the Melbourne Institute in 2000. First, Professor Mark Wooden was appointed as a Professorial Fellow. Three “adjunct appointments” of research associates were made: Professor Bruce Chapman of the ANU as Professorial Fellow, Dr Alan Duncan of the University of Nottingham as Principal Fellow, and Professor John Freebairn of the Economics Department at the University of Melbourne as Adjunct Professor. Dr Mark Rogers left Melbourne to take up a position at Oxford University. However, he Professor Mark Wooden ONE OF OUR NEW STAFF IN 2000 has retained a link with the Melbourne Institute by accepting an adjunct position as Senior Fellow to collaborate with our in-house researchers in the field of Enterprise Performance. Dr Rebecca Valenzuela left the Melbourne Institute to take up a lectureship at Monash University. We wish them both well in their new positions.

Advisory Board in 1999 I would like to thank Dr Peter Jonson and the Advisory Board for their important contribution. The Board plays a crucial role for the Melbourne Institute in the form of high level advice and contact with the world of government, business and community groups. A sub-committee, chaired by Phil Ruthven, assisted in the refining of the strategic plan, and the full Board’s three meetings in 1999 produced very helpful ideas and support. The membership of the Advisory Board is outlined on pages 12 and 13. Bishop Michael Challen retired from the Board at the end of 1999 consequent upon his retirement as Executive Director of the Brotherhood of St Laurence. I would like to thank him very much for his contribution to the Board in my first four years as Director. He was a very important advocate for the social policy research agenda. In 2000, two new members will join the Board: Associate Professor Alison McClelland (Department of Social Work, La Trobe University) and Father Nic Frances (Executive Director of the Brotherhood of St Laurence). A special mention again for Tony Cole who, in addition to serving on the Board, chairs the Melbourne Institute Business Economics Forum and is co-chair of the Melbourne Institute Public Economics Forum in Canberra.

Administrative and Technical Support I would also like to take this opportunity to thank the administrative and technical support team who play very important roles in ensuring the smooth operation of the Melbourne Institute. From left: Ms Karen Roe, Mr Jean-Luc Garlick, Ms Rachel Derham and Ms Lara Hammond ADMINISTRATIVE AND TECHNICAL TEAM

OUTLOOK FOR 2000 AND 2001 Introduction: Director Reappointed for a Further Five Years Our strategic plan for 1996–2000 included a target of doubling our research output, being a leader in economic and social modelling and in the production, analysis and commentary on economic and social indicators, and being an increasingly influential source of ideas for government, business and community groups. In December 1999, a University committee reviewed this performance and recommended the reappointment of the Melbourne Institute Director, Peter Dawkins, for a second five-year term from 2001 to 2005. In 2000 a new strategic plan for that period will be developed. Meanwhile, some of our planned activities in 2000–2001 are outlined below.

Social Policy Research We are pleased to report that the Melbourne Institute has been selected as one of the preferred tenderers for the provision of social policy research to the Department of Family and Community Services (FaCS) for the period 2001–2004. We are currently negotiating a contract, which is expected to involve funding from FaCS of the order of $750,000 per year, over this period. Three teams will be put in place in the following areas: • Empirical Studies of the Interaction of the Labour Market and the Social Security System (led by Mark Wooden) • The Supply and Demand for Income Security: Behavioural Policy Modelling (led by John Creedy) • Economic and Social Research on Families and Communities (led by David Johnson)

Survey of Household Income and Labour Dynamics in Australia (HILDA) The Melbourne Institute has been selected by the Department of Family and Community Services to be the lead organisation (in association with the Australian Institute of Family Studies and the Australian Council of Educational Research) responsible for the management and conduct of a major new longitudinal survey known as the survey of Household Income and Labour Dynamics in Australia (HILDA). This survey promises to be of enormous importance for social policy and labour market research in Australia. Mark Wooden is the project director.

GST Report Monitoring the GST is an occasional report that aims to provide information on the GST and new tax package over the period of its implementation. It presents the results of a survey of Australian households and the professional analysis of Melbourne Institute staff. Six reports will be released in 2000 (May, June, July, August, September, October).

Welfare Reform Seminars, Forums and a Major Two-Day Conference The Melbourne Institute’s Director, Professor Peter Dawkins, is a member of the Reference Group on Welfare Reform established by the Minister for Family and Community Services, Senator Jocelyn Newman, in October 1999. In the course

of the work of the Reference Group, the Melbourne Institute hosted two seminars to discuss relevant issues with a range of academics as well as experts from government, business and the community sector. The Melbourne Institute also based one of its Business Economics Forums and one of its Public Economics Forums on Welfare Reform. In November 2000 it will be jointly hosting, with the Department of Family and Community Services, a major two-day conference on welfare reform.

Launching the Melbourne Institute Tax and Transfer Simulator The Melbourne Institute’s new behavioural model of the Australian tax and transfer system, developed as joint intellectual property with the Department of Family and Community Services, will be launched in the second half of 2000. It is planned that this model will be extensively used to assess the likely effects of a range of possible reforms to the tax and social security system. This could include for example various options canvassed in the report of the Reference Group on Welfare Reform reporting to the Commonwealth Government in mid 2000.

Economic and Social Outlook Conference It is currently our intention to hold the first of a proposed series of biennial “Economic and Social Outlook Conferences” in 2001. The aim of the conference will be to explore the major economic and social trends in Australia and to debate associated policy issues.

Research on the Economics and Reform of the Health-Care System The Melbourne Institute has identified this area as one of major importance for policy-based research in Australia. It is therefore exploring ways to make a major contribution in this area. To start, the Melbourne Institute Public Economics Forum in Canberra focused on this topic in June 1999 with associated articles in the Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends. We aim to develop a research agenda in this area with a view to getting properly underway in 2001.

Monograph on Innovation, Productivity and Profitability of Australian Enterprises In 2000–2001, the research findings from our current ARC SPIRT grant project on the performance of Australian enterprises will be brought together and summarised in a new monograph. This will provide a wealth of research evidence about the factors associated with innovativeness, productivity and profitability in small, medium and large enterprises.

Sydney Business Economics Forum We are very pleased with the success of the Melbourne Institute Business Economics Forum in Melbourne which has been in operation since 1997. The Melbourne Institute Public Economics Forum in Canberra also got off to a good start. It is intended that our next initiative of this kind will be the Melbourne Institute Business Economics Forum in Sydney. It is planned that this will be launched in 2001.

STAFF, ASSOCIATES AND RESEARCH STUDENTS Staff in 1999

Research Officer Mr Ben Jensen, BCom Melb.

Director and Ronald Henderson Professor Professor Peter Dawkins, BEc Flinders, BSc Lough., MSc (Eco) Lond., PhD Lough.

Publications Manager Ms Nellie Lentini, BA Monash

Deputy Director Associate Professor David Johnson, DipAgrEc NE, BAgrSc, MCom, PhD Melb.

Public Relations Ms Anne Leahy, BCom Melb. Finance and Information Technology Manager Mr Jean-Luc Garlick, BSc, Dip Hum, Dip Eco Com LaT.

Assistant Director Mr Don Harding, BEc, MEc ANU

Functions Manager Ms Karen Roe, BA, MA LaT., PGDACS Melb.

Truby Williams Professor of Economics Professor John Creedy, BSc (Eco) Brist., BPhil (Eco) Oxf., FASSA

Senior Administrative Officer Ms Rachel Derham, BSc Melb.

Professorial Associate Dr Jonathan Kelley, BA Camb., MA, PhD Calif.

Administrative Assistant Ms Rosy Qin (on leave) Ms Kate Ringvall, BA (Asian Studies) Murdoch

Principal Fellows Dr Ernst A. Boehm, AUA, BEc, MEc Adel., DPhil Oxf., MCom Melb. Dr Alan Duncan, BA (Eco) Manchester, DPhil (Eco) York

Postgraduate Students Ms Siobhan Austen, BEc NE, MCom Curtin Mr Ben Jensen, BCom Melb. Ms Joanne Loundes, BEc Murdoch Ms Rosanna Scutella, BCom Melb. Ms Penny Smith, BEc UWA

Senior Research Fellows Dr Mariah Evans, BA (Soc) Reed, MA (Soc) Illinois, PhD (Soc) Chicago Dr Mark Harris, BA (Eco) Suss., GDipEc, PhD Monash Dr Peter Summers, BA (Communic), MA (Urb Reg Plng), MS (Math), PhD Iowa Dr Elizabeth Webster, BEc, MEc Monash, PhD Camb.

New Staff (in 2000)

Senior Fellow Dr Mark Rogers, BSc (Eco) Lond., MSc (Eco) Warw., PhD ANU

Research Officer Mr Matt Hammill, BEc Newcastle, BCom Melb.

Research Fellows Mr Simon Feeny, BA Portsmouth, MSc Reading Mr Michael Harris, BEc ANU Dr Hyeon-seung Huh, BEc Yonsei, GDipEc, MEc Syd., PhD UNSW Mr Woei Tian Liew, BSc, MSc LaT., GDipEc Melb. Ms Joanne Loundes, BEc Murdoch Ms Rosanna Scutella, BCom Melb. Dr Yi-Ping Tseng, BEc Taiwan, PhD ANU Data Base Manager Mrs Glenys Harding, BEc ANU

Professorial Research Fellow Professor Mark Wooden, BEc Flinders, MSc (Eco) Lond.

Administrative Assistant Ms Lara Hammond

New Adjunct Appointments Adjunct Professor Professor John Freebairn, BAgr (Eco), MAgr (Eco) UNE, PhD Davis Professorial Fellow Professor Bruce Chapman, BEc ANU, PhD Yale

Dr Ernst Boehm

Professor Bruce Chapman

Professor John Creedy

Professor Peter Dawkins

Ms Rachel Derham

Dr Alan Duncan

Dr Mariah Evans

Mr Simon Feeny

Professor John Freebairn

Mr Jean-Luc Garlick

Mr Matt Hammill

Ms Lara Hammond

Mr Don Harding

Mrs Glenys Harding

Dr Mark Harris

Mr Michael Harris

Dr Hyeon-seung Huh

Mr Ben Jensen

Associate Professor David Johnson

Dr Jonathan Kelley

Ms Anne Leahy

Ms Nellie Lentini

Mr Woei Tian Liew

Ms Joanne Loundes

Ms Rosy Qin

Ms Karen Roe

Dr Mark Rogers

Ms Rosanna Scutella

Dr Peter Summers

Dr Yi-Ping Tseng

Dr Elizabeth Webster

Professor Mark Wooden

ADVISORY BOARD Advisory Board Members in 1999 Chairperson Dr Peter Jonson, Professional Director Members Ms Stella Axarlis, Managing Director, Bilcon Engineering Mr Gary Banks, Chairman, Productivity Commission Bishop Michael Challen, Executive Director, Brotherhood of St Laurence Mr Tony Cole, Principal â&#x20AC;&#x201C; National Practice Leader, Investment Consulting, William M. Mercer Mr Michael Costa, Secretary, Labor Council of NSW Professor Peter Dawkins, Director and Ronald Henderson Professor, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne Mr Bill Evans, General Manager, Economics, Westpac Banking Corporation Dr Peter Jonson Professor John Freebairn, Head, Department of Economics, The University of Melbourne Mr Don Harding, Assistant Director, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne Associate Professor David Johnson, Deputy Director, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne Mr Ian Little, Secretary, Department of Treasury and Finance Professor Peter Lloyd, Ritchie Professor of Economics and Director, Centre for Financial Studies, The University of Melbourne Dr David Rosalky, Secretary, Department of Family and Community Services A meeting of the Advisory Board Mr Phil Ruthven, Executive Chairman, IBISWorld Professor Boris Schedvin, Deputy Vice-Chancellor (Academic Management), The University of Melbourne Mr Glenn Stevens, Assistant Governor (Economic), Reserve Bank of Australia Professor Ross Williams, Dean, Faculty of Economics and Commerce, The University of Melbourne Board Secretary Ms Karen Roe, Functions Manager, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne

New Members in 2000

Professor Peter Dawkins

Father Nic Frances, Executive Director, Brotherhood of St Laurence Associate Professor Alison McClelland, Department of Social Work, La Trobe University Professor Mark Wooden, Professorial Research Fellow, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne

Mr Gary Banks and Bishop Michael Challen

Ms Stella Axarlis

Mr Michael Costa

Mr Phil Ruthven, Associate Professor Alison McClelland and Dr David Rosalky

Associate Professor David Johnson and Mr Tony Cole

Professor Peter Lloyd

Professor Boris Schedvin

Mr Glenn Stevens

Mr Ian Little and Professor Mark Wooden

Mr Don Harding and Professor John Freebairn

Mr Bill Evans and Mr Wayne Jackson (Vice Dr David Rosalky)

Father Nic Frances and Professor Ross Williams

RESEARCH AREAS Macroeconomics and Business Cycle Analysis

Mr Don Harding

Dr Peter Summers

This research program is conducted within the Westpac – Melbourne Institute Centre for Business Cycle Analysis under the leadership of Don Harding. The Centre had a very good year contributing to the Australian macroeconomic debate. As in past years, a significant part of that contribution came from the Centre’s closely watched economic indicators. These included Westpac – Melbourne Institute Leading and Coincident Indexes of Economic Activity, the Westpac – Melbourne Institute Consumer Sentiment Index, the Melbourne Institute Survey of Inflationary Expectations (sponsored by the Reserve Bank), the Mercantile – Mutual Household Saving Report and the ABKP IdeaWorks Retail Probe. During 1999, the Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends continued to provide accurate readings of the Australian, state and international economies. Over the past three years, the forecasts for Australia and the United States from the Melbourne Institute model proved to be accurate at times when other forecasters were wide of the mark. The forecasts became an important part of the Melbourne Institute Business Economics Forum. In 2000, we will extend the Quarterly Bulletin to include forecasts of the six Australian states and two territories. Each special topic in the Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends provided informed discussion of important policy issues. In 1999 these included employment initiatives (1.99), health reform (2.99), ageing in the 21st century (3.99) and taxation reform (4.99). These topics attracted a broad interest from policy makers and the media, and formed the basis for the policy discussion at the Melbourne Institute Business Economics Forum. During 1999, the Centre’s research program progressed with support from the Australian Research Council and the involvement of Professorial Associate Professor Adrian Pagan of the ANU. The Business Cycle Seminar Series attracted international speakers such as Professor Chris Sims (Yale and Princeton) and Professor Roger Farmer (European University Institute and University of California Los Angeles). One of the highlights of 1999 was the “Forecasting and Business Cycles: Frontier Techniques” conference which attracted a wide cross-section of academics, business economists and government officials (see section on conferences). This conference produced several important outcomes. The first of these was a process to develop a formal set of business cycle dates for Australia. The second outcome was a commitment by the Australian Bureau of Statistics to explore, in consultation with the Reserve Bank and the Melbourne Institute, the feasibility of constructing a real-time macroeconomic data set for Australia. Such a data set comprises the data as they are seen at each release, and allows the scientific study of revisions and the analysis of how revisions influence policy.

Labour, Social and Fiscal Studies In 1999 we drew together three of our previous research programs into one, because of the strong inter-relationships between labour, social and fiscal studies. Peter Dawkins coordinated this program. A wide range of projects on the tax and social security system and on the labour market were undertaken in 1999 in teams led by David Johnson, John Creedy and Beth Webster. Adjunct Professor John Freebairn also contributed strongly to academic leadership in this area.

Professor Peter Dawkins

Associate Professor David Johnson

Professor John Creedy

Dr Elizabeth Webster

Professor John Freebairn

Tax and Social Security The final report of our major ARC project on the efficiency and equity effects of tax reform (in association with CEDA and the Brotherhood of St Laurence), including an assessment of the government’s tax reform package (prior to the amendments resulting from negotiation with the Democrats), was completed. Our research suggested that the introduction of a broad-based goods and services tax was of benefit to the economy, but that compensation would be needed to maintain equity across demographic and income groups. Suggestions for improvement to the government’s plans were made, in particular, to increase the generosity of compensation for low income groups and to improve the fairness of the overall package. Under the leadership of Professor John Creedy, several researchers at the Melbourne Institute collaborated with Dr Alan Duncan (of the Institute for Fiscal Studies in London) to produce a large scale tax microsimulation model. The MITTS model is the first behavioural microsimulation model for Australia allowing for individuals’ labour supply to change in response to changes in the direct tax and transfer system. The research is supported by the Department of Family and Community Services. MITTS will be a valuable tool for the detailed analysis of the implications for tax revenue, government expenditure, labour supplies, income distribution and tax burdens of changes in social transfers and income taxation. The first version of the model is expected to be launched in the year 2000.

The Interaction of the Labour Market and the Social Security System The MITTS model is expected to be an important tool for evaluating the reforms to the social security system aimed at increasing work incentives. This has become an increasingly important theme of the Melbourne Institute’s research. Three other projects for the Department of Family and Community Services (FaCS), utilising the FaCS administrative longitudinal data base, continued during 1999. The three topics were participation and claimant status of persons on more than minimum family payment; incentives, means-tested benefits and the earnings distribution of benefit claimants; and repeated spells on benefits: an analysis of churning. The final reports from these projects will be published in 2000.

Other Labour Market Research The Melbourne Institute also began a major project on the nature, extent and causes of nominal and relative wage flexibility. This is part of an ARC “SPIRT” grant project in association with the Reserve Bank of Australia. One of the main sources of data for this project included a survey of approximately 5000 individual householders across Australia.

Two of the last papers under the Full Employment Project considered whether labour market programs have a significant positive effect on participants’ employment probabilities. It was found that employment-based programs, such as wage subsidy programs and job creation programs, increased participants’ chances of getting a job (after the program had ended) by between 20 and 25 percentage points. Training programs and employment placement programs (such as job clubs), however, were found to have a negligible impact. While labour market programs may assist selected individuals, it was not clear whether this was solely at the expense of other job seekers, because the total stock of jobs did not change, or if indeed there was a net increment in total employment. To clarify the situation, the Melbourne Institute undertook empirical analysis to estimate whether labour market program expenditure over the past few decades had any impact on either the aggregate vacancy rate or the inflation rate. Both projects returned a negative answer, suggesting the main effect of labour market programs is a reallocation of scarce jobs between competing job seekers. Another initiative undertaken in 1999 was the investigation of the returns to higher education. David Johnson and Peter Dawkins of the Melbourne Institute worked with Jeff Borland of the Economics Department and Ross Williams, Dean of the Faculty of Economics and Commerce at the University of Melbourne, to measure private social and government returns from investment in higher education. The project will continue in 2000. The findings of another survey-based Melbourne Institute report, The Contours of Restructuring and Downsizing in Australia published in July this year, have broad social policy relevance. The project was sponsored by the Myer Foundation and CEDA, and Professor Craig Littler (now of the University of London) collaborated with Melbourne Institute staff in the research. Downsizing and restructuring have been widespread in Australia during the 1990s, as in many other OECD countries. From 1993–1995, 56 per cent of larger Australian organisations downsized, with this figure rising to 62 per cent in the 1997–98 period, giving no indication of a slowing in this type of corporate reorganisation. Close to half of responding organisations reported stripping out entire layers of management. While there was no clear evidence that downsizing raises the general level of unemployment, it may have affected the labour force participation rate, especially for specific groups of workers. It also appeared that downsizing had a negative effect on the morale, motivation and commitment levels amongst those staying in downsizing organisations. While “survivor syndrome” effects were shown to be continuing and persistent, the trend was in the direction of improvement, suggesting that some companies were better managing change.

Australian Social Monitor

Dr Mariah Evans

Dr Jonathan Kelley

Another important feature of this research program was the ongoing production of the Australian Social Monitor. The issues published in 1999 contained articles covering various topics such as income inequality, superannuation, cost of children, foreign trade, confidence in universities, domestic violence, attitudes to pensions, industrial relations, attitudes towards abortion, and evolution.

Enterprise Performance Research

Enterprise Performance Research Team meeting in 2000

Dr Mark Rogers

In 1999 we released a book entitled How Big Business Performs: Private Performance and Public Policy (published by Allen & Unwin). This incorporated findings from our research agenda on the performance of large enterprises over the foregoing few years. It was launched at a successful conference and received positive reviews. This was also the second year of a major three-year ARC project on the performance of Australian enterprises. The partner organisations who supported this research in addition to the ARC were IBISWorld, the Australian Taxation Office, the Productivity Commission, the Victorian Department of State Development, and the Office of Small Business in the Commonwealth Department of Employment, Workplace Relations and Small Business. Five papers were produced in 1999 on various aspects of innovation, productivity and profitability. Applied analysis of the performance of small and medium enterprises was given a big boost by the availability of the Australian Bureau of Statistics’ Growth and Performance Survey (GAPS). This survey tracked around 6000 firms over the period 1994–95 to 1996– 97 (and additional years are planned). The great value of this survey was that it covered both qualitative variables (for example, experience of managers, use of management techniques) How Big Business Performs and quantitative variables (for example, profits, labour productivity). Various papers and reports were underway using the GAPS, and the understanding of SMEs in Australia was substantially enhanced. One of the partners in this project, the Australian Taxation Office, also commissioned the Melbourne Institute to commence research on modelling the profitability and tax performance of large Australian enterprises. In a research project called the Innovation Scoreboard, which began in 1997, the Melbourne Institute aims to assess more broadly the innovativeness of large Australian companies and to analyse the links between innovation and firm performance. In addition to looking at R&D expenditure, this research involves analysis of intellectual property data; that is, patents, trademarks and designs. Our research showed that investment in R&D and intellectual property had strong links with the Ms Joanne Loundes ANOTHER MEMBER OF share market value of firms. The techniques used enabled the compilation of an innovation index for THE TEAM companies also. This index was a weighted sum of R&D, patent, trademark and design activity where the weights were given by statistical analysis between the activities and market value. The index, therefore, provided a method of assessing overall innovative effort. The innovation index appeared in the Melbourne Institute’s publication entitled R&D and Intellectual Property Scoreboard 1999, produced in association with IP Australia and IBIS. In another project, Beth Webster undertook a study to pilot several methods for determining the benefits to employers from training the workforce. This project was undertaken in collaboration with the Centre for Labour Market Research (WA) and AustralAsia*Economics (Adelaide). In 1999, Mark Rogers was the coordinator of this research program, a role he performed with great efficiency and success. He has left the Melbourne Institute to take up a position at Oxford University. We are pleased that he remains a Senior Fellow of the Institute and is collaborating with our other enterprise performance researchers.

CONTRIBUTIONS TO POLICY ANALYSIS AND DEBATES One of the Melbourne Institute’s strategic objectives was to contribute strongly to economic policy analysis, discussion and development in Australia. Examples in 1999 in approximate chronological order included the following. • Peter Dawkins and John Freebairn were active as two of the five economists who wrote a letter to the Prime Minister in October 1998 with some suggestions about how to substantially reduce unemployment. There was considerable interest from the Government, the Opposition, and various interest groups and commentators. It resulted in a number of speaking engagements, TV and radio appearances etc. Dawkins and Freebairn were two of the speakers at the Business Council of Australia conference on “Rebuilding the Safety Net” in April. • Peter Dawkins was commissioned to undertake a project of the Business Council of Australia to further develop and model the wage–tax trade-off proposal. • Don Harding and Joanne Loundes developed a proposal for restructuring unemployment benefits in the “Policy Watch” section of the Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends. • The final report of the Melbourne Institute’s project on the efficiency and equity effects of tax reform (supported by the ARC, CEDA and the Brotherhood of St Laurence) was launched in May (David Johnson, John Freebairn, Rosanna Scutella, Glenys Harding). • Peter Dawkins wrote an invited 3,000 word article for the Australian Financial Review, published on Friday 16th April, on the way forward for economic/social/industry policy for Australia. • The Melbourne Institute embarked on research on the health system. Consequently, health policy was the focus of the second Melbourne Institute Public Economics Forum in Canberra in June. • Don Harding’s paper and presentation to the Melbourne Institute Public Economics Forum on health received considerable interest from the media and the health industry. • Peter Dawkins was a keynote speaker at the “Victorian Skills Summit” in June. • Peter Dawkins made a presentation on “Skills and Our Future” to the staff of Employment Victoria in June. • The Federal ALP consulted with relevant experts in their policy review on employment and other issues. A number of members of staff of the Melbourne Institute were consulted in this process. • The Melbourne Institute undertook research on the economics of higher education funded by the Vice-Chancellor. • Mark Rogers completed two review papers for IP Australia (The Economic Value of the IP System) and the Science, Engineering and Technology Taskforce, Victorian Government (Innovation and Economic Growth). • Research by David Johnson and others was heavily quoted in the recent Productivity Commission report on gambling. • Don Harding was a speaker at a conference on health reform held in Brisbane in October. • Peter Dawkins was appointed by the Federal Minister for Family and Community Services, Senator Jocelyn Newman, to be a member of the Reference Group on Welfare Reform that has been asked to prepare a Green Paper. • Peter Dawkins was a speaker at the ACOSS national conference in November.

Australian Financial Review 16 April 1999

Peter Dawkins on the way forward for economic and social policy in Australia

Australian Financial Review 15 July 1999

On the Westpac – Melbourne Institute Consumer Sentiment Index

Australian Financial Review 24 June 1999

On the Westpac – Melbourne Institute Leading Index of Economic Activity

Australian Financial Review 3 February 1999

Sydney Morning Herald 27 February 1999

Australian Financial Review 10 March 1999

On the Five Economists’ Plan

The Australian 16 July 1999

Reporting on article by Don Harding in the Mercer – Melbourne Institute Quarterly Bulletin

Australian Financial Review 18 May 1999

Opinion page article by David Johnson and John Freebairn on the Tax Reform Package

MELBOURNE INSTITUTE BUSINESS ECONOMICS FORUM In 1999, the Melbourne Institute Business Economics Forum continued to generate considerable interest in Melbourne. The number of members grew to 25 and the four quarterly breakfasts attracted considerable interest. Tony Cole chairs the Forum. Breakfasts were held on 24 March, 16 June, 14 September and 30 November at the Hotel Sofitel or Grand Hyatt in Melbourne. At each breakfast, the Melbourne Institute’s forecasts were presented and discussed, and special topics were canvassed such as the “Five Economists’ Plan”, the Melbourne Institute’s forecasting record, policy implications of an ageing population, and taking stock of the new tax system. As well as Melbourne Institute researchers, a number of external commentators were involved. These included Peter Dixon and Jeff Richardson (Monash University), Graeme Woodbridge (Productivity Commission), Anna Howe (Australian Association of Gerontology), Bill Evans (Westpac) and Ric Simes (Rothschild). Dr Peter Summers delivering Melbourne Institute forecasts

Members Gold and Full Australia Post BHP Co. Business Council of Australia City of Melbourne Department of Premier and Cabinet Department of Treasury and Finance Faculty of Economics and Commerce, The University of Melbourne General Motors – Holdens Automotive JobPower Mercantile Mutual Reserve Bank of Australia Urban Land Corporation Westpac Banking Corporation William M. Mercer Associate ANZ Banking Group CEDA Central Highlands Water Department of State and Regional Development IBIS Business Information Institute of Public Affairs Institute for Private Enterprise

National Institute of Accountants PricewaterhouseCoopers Productivity Commission Shell Australia Western Australian Business Economics Forum (joint venture with IRIC, Curtin University of Technology) CCD Australia City of Perth Curtin Business School, Curtin University of Technology Department of Land Administration Department of Productivity and Labour Relations Department of Resources Development Graduate School of Business Leader of the Opposition, West Australian Parliament Lotteries Western Australia Western Power Corporation Westralia Airports Corporation

Question time at a quarterly breakfast

Guests at a quarterly breakfast

Dr Peter Summers and Mr Don Harding further discuss the special topic with a member

MELBOURNE INSTITUTE PUBLIC ECONOMICS FORUM In 1999 the Melbourne Institute Public Economics Forum was launched in Canberra. The number of inaugural members was nine and the four quarterly luncheons attracted considerable interest. Luncheons were held on 30 March, 22 June, 21 September and 7 December at Parliament House and the Hyatt Hotel Canberra. At each luncheon, the Melbourne Institute’s forecasts were presented, and special topics were canvassed such as the “Five Economists’ Plan”, the Melbourne Institute’s forecasting record, The inaugural luncheon at Parliament House policy implications of an ageing population, and taking stock of the new tax system. In addition to Melbourne Institute researchers, guest speakers included Chris Richardson (Access Economics), Michael Keating (ANU), Richard Scotton (Monash), Gary Banks (Productivity Commission). A number of external commentators were involved. These included Craig Emerson MP, Chris Gallus MP, Steven Kates (ACCI), Andrew Podger (Department of Health and Aged Care), Brendan Nelson MP, Mark Latham MP, Bruce Chapman, Steve Dowrick, Bob Gregory and Peter McDonald (ANU), Bruce Bacon and Greg Smith (Treasury) and Graham Matthews (Access Economics). The Forum was co-chaired by Tony Cole, Ted Evans and Michael Keating.

Members Gold and Full Australian Taxation Office Department of Family and Community Services Department of Health and Aged Care Department of Industry Science and Resources Department of the Parliamentary Library Medibank Private Associate Bureau of Transport Economics Department of Finance and Administration Productivity Commission

Professor Peter Dawkins greeting guests

From left: Professor Peter Dawkins, Ms Elizabeth Morgan, Mr Mark Paterson, Mr Ted Evans, Mr Michael Raper and Mr Patrick McClure at the Melbourne Institute Public Economics Forum in Canberra

CONFERENCES Three conferences were held in 1999. One was a joint conference with the Productivity Commission on the policy implications of an ageing population. The other two were on business cycles and on big business in Australia.

Policy Implications of the Ageing of Australia’s Population, 18–19 March 1999

Conference Proceedings

A conference, jointly convened by the Productivity Commission and the Melbourne Institute, was held in March 1999. The conference brought together researchers, policy makers and practitioners from many different fields, and addressed a broad range of issues to do with ageing. This included the effects on economic growth, government revenue and expenditure in the long term, superannuation, health, the provision of long-term care and housing arrangements. The conference proceedings were published as a book. Seventy-five people attended.

Forecasting and Business Cycle Analysis: Frontier Techniques, 15 October 1999 This conference was the second in the Melbourne Institute’s biennial series on business cycles and forecasting. The conference was based on research conducted by the Melbourne Institute’s Centre for Business Cycle Analysis, notable for its emphasis on combining modern econometric techniques with the methods developed by Burns and Mitchell at the United States National Bureau of Economic Research. The Melbourne Institute’s researchers conveyed the results and practical implications of that research to a broad audience from business, government and academia. Lunch Speaker, Mr Glenn Stevens Presentations at the conference covered the four broad areas of macroeconomic forecasting, leading indicators, understanding business cycles, ASSISTANT GOVERNOR (ECONOMIC), RESERVE BANK OF AUSTRALIA and frontiers of business cycle research. The day concluded with a panel discussion of the future directions for research in these areas. Alongside the Melbourne Institute’s researchers, Don Harding and Pete Summers, notable speakers included Vance Martin and Olan Henry (University of Melbourne), Allan Layton (QUT), Lance Fisher (UNSW), Mardi Dungey (La Trobe) and Andrea Brischetto (RBA). The luncheon address was given by Glenn Stevens (Assistant Governor (Economic) of the RBA). There were 88 attendees at the conference and the subject of business cycles and forecasting was included as a special topic in the Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends.

Big Issues for Big Business, 25–26 November 1999 Over one and a half days, the Melbourne Institute ran a trilogy of half-day conferences that represented the outcome of a major program of research at the Melbourne Institute on the performance of Australian big business. The three

conference themes were “How Big Business Performs”, “Downsizing and Restructuring in Australian Industry” and “Mergers: Private Performance and Public Policy”. The leaders of that research team, Professor Peter Dawkins, Professor Stephen King, Professor Danny Samson and Professor Craig Littler, presented their findings and discussed them with other senior academics, business leaders, business analysts, consultants and senior public servants. These included Professors Ian Harper, Robert Officer, Joshua Gans and Associate Professor Vivek Chaudhri (University of Melbourne), Mr Tom Bevington (Bevington and Partners), Mr Ross Jones (ACCC) and Mr Hilary Roberts (Australian Hospital Care). Mr Phil Ruthven of IBISWorld concluded the first session in the trilogy with a speech on “The Conference luncheon addressed by Professor Alan Fels Good and Bad of Australian Business” during the conference dinner. The second session’s proceedings included a special presentation by Professor Kim Cameron by audio link from Case Western University in Ohio, USA. Before the third session, a luncheon address by Professor Allan Fels of the Australian Competition and Consumer Commission on “Big Business and the Trade Practices Act” was well attended by media and delegates alike. Several important publications by the Melbourne Institute were released at the conference. The book How Big Business Performs: Private Performance and Public Policy, published by Allen and Unwin in association with the Melbourne Institute, was officially launched at the conference dinner. Contours of Restructuring and Downsizing in Australia by the Melbourne Institute in association with CEDA and the Myer Foundation, and “Mergers: a Policy Forum” from the Australian Economic Review were distributed to conference delegates. There were 81 attendees.

PUBLICATIONS BY SUBSCRIPTION Melbourne Institute Economic and Social Journals Australian Economic Review in 1999 Articles and Submissions The format of the Australian Economic Review continued in the style that has been developed over recent years. The ‘Contributed Articles’ section continued to attract a strong rate of submission. ‘Policy Forums’ were published in all four issues in 1999, and included ‘Should Inflation Be the Sole Target of Reserve Bank Monetary Policy?’, ‘Exchange Rates and Capital Controls’, ‘The Equal Pay Case—Thirty Years On’, and ‘The Junior Rates Inquiry’. Each issue contained a ‘For the Student’ article: ‘Monopoly Power, Innovation and Economic Growth’, ‘Macroeconomic Forecasting at the Melbourne Institute’, ‘A Review of the Asian Crisis: Causes, Consequences and the Policy Responses’, and ‘Taxation, Redistribution and Progressivity: An Introduction’. Two issues included a ‘Data Survey’ article: ‘Australian and Australian Economic Review International Survey Data for Multivariate Analysis: The IsssA’ and ‘A New Arrangement for Confidentialised Unit Record Files’. In 1999, the Review published 41 articles, as in 1998 when 41 articles were published also. The size of the Review remained much the same with a total for 422 pages. In Table 1, we show the distribution of articles by type for the last four years. Table 1: Published Articles in 1996, 1997, 1998 and 1999 Type of Article

1996

1997

1998

1999

Invited Articles Contributed Articles Policy Forum Data Surveys For the Student Pages

2 13 15 5 4 472

0 18 19 3 4 466

0 16 19 2 4 444

1 15 19 2 4 422

Table 2: Submissions in 1996, 1997, 1998 and 1999* Papers Brought forward from previous year** Submissions during year

Decisions made Accepted: published Accepted: in queue Rejected/withdrawn Resubmit In process

1996

1997

1998

1999

22 36

23 58

31 38

29 54

13 3 22 16 4

18 4 32 15 12

16 3 24 11 15

15 3 31 12 22

* Contributed articles only ** Sum of acceptances in queue, resubmissions and articles in process

In 1999, we received 54 submissions in the Contributed Articles section, considerably more than the previous year’s 38 submissions. Table 2 shows the number of submissions for the past four years. The acceptance rate for papers which have been published (as a percentage of submissions) has been 32 per cent over the past four years.

Australian Social Monitor The Australian Social Monitor was launched in September 1998. The Australian Social Monitor is published with support from the International Social Science Surveys/Australia and ANUTECH at the Australian National University. The Australian Social Monitor aims to Australian Social Monitor monitor and analyse important social trends and attitudes. The issues published in 1999 contained articles on various topics such as income inequality, superannuation, cost of children, foreign trade, confidence in universities, domestic violence, attitudes to pensions, industrial relations, attitudes towards abortion, and evolution.

Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends The Quarterly Bulletin is sponsored by William M. Mercer Pty Ltd and provides an authoritative analysis of international, national and state economic environments with a particular focus on the state economies and on reading the business cycle. In addition, each issue covers a special topic considered to be of particular interest. The special topics covered in 1999 included employment initiatives, health reform in Australia, ageing in the 21st century, and measuring the price effects of proposed tax reforms. Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends, nos1–4.99. Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends Victorian Supplement, nos1–4.99.

Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends

Melbourne Institute Economic and Social Indicators Westpac – Melbourne Institute Indexes of Economic Activity Published monthly the Westpac – Melbourne Institute Indexes of Economic Activity examines movements in leading, coincident and lagging indicators of economic activity in Australia together with comparative data from overseas. It also includes a quarterly leading index of inflation. Indexes of economic activity are designed to enhance the decision making process of financial and business managers by anticipating and identifying turning points in the economy. Each index blends several variables that reflect different aspects of the economy; their combination is intended to give a more representative picture than any one indicator would by itself.

Westpac – Melbourne Institute Indexes of Economic Activity

Westpac – Melbourne Institute Survey of Consumer Sentiment The Consumer Sentiment Index reflects the average of consumers’ responses with regard to their evaluation of their household financial situation over the past year, the coming year and the next five years; anticipation of economic conditions over the coming year and the next five years; and a view on buying conditions for major household items. Assessments of future unemployment are also recorded. Each quarter, consumers are also surveyed about their views on

buying conditions for cars and dwellings, the wisest place to invest savings and economic news recall. This report is produced monthly.

Westpac – Melbourne Institute Survey of Consumer Sentiment (NSW, Victoria, Queensland, Western Australia) Each quarter, consumer sentiment data as presented for Australia is also presented for NSW, Victoria, Queensland and Western Australia (with the exception of the news recall data).

Melbourne Institute Survey of Consumer Inflationary Expectations The Melbourne Institute Consumer Inflationary Expectations measures are designed to represent the average householder’s expected rate of consumer price rises over the coming twelve months. The survey is a direct measure of inflationary expectations as consumers are surveyed on whether and by how much they believe prices will go up or down. The report is produced monthly.

Melbourne Institute Survey of Household Saving Intentions The Household Saving Report contains data on householders’ current saving behaviour, reasons for saving, current household asset and debt structure and their assessment of the best ways to hold assets. The report is produced quarterly. In December 1999, Mercantile Mutual began sponsoring this report.

Melbourne Institute Wages Report The Wages Survey records employees (self-reported) wage changes over the previous twelve-month period. This survey has been designed to capture the growth in wage rates. The report is produced quarterly.

Mercantile Mutual – Melbourne Institute Household Saving Report

Poverty Lines: Australia Poverty Lines: Australia is a quarterly newsletter that updates the “Henderson Poverty Line” as defined in the 1973 Commonwealth Commission of Inquiry into Poverty. The Poverty Lines are standard reference material for those concerned with social welfare policy in Australia. The income levels of various sized families are used to ascertain when and where a poverty situation occurs.

Other Melbourne Institute Publications Produced in 1999 Tax Reform: Equity and Efficiency Series In May 1999, the fourth report in the Tax Reform: Equity and Efficiency Series was released. The report, “Evaluation of the Government’s Tax Package”, evaluated the reform proposals taken to the 1998 federal election by the Howard Government. In particular, it evaluated the revenue, efficiency and equity effects of the indirect tax changes. The primary aim of tax reform was to generate long-term structural improvements in the economy. Thus the report was concerned mainly with longer term effects. Medium-term impacts and short-run and transition adjustment cost effects were also discussed.

The R&D and Intellectual Property Scoreboard 1999: Benchmarking Innovation in Australian Enterprises Produced in September 1999, the R&D and Intellectual Property Scoreboard was a comprehensive assessment to date of the innovative activities of large Australian enterprises. The report provided an invaluable information source for benchmarking and competitor analysis. The innovative activities covered by the report contained the latest available information on the level of R&D and applications for intellectual property (patents, trade marks and designs). The report included R&D expenditure and intensity for parent companies, the level and intensity of intellectual property applications for parent companies, and an industry breakdown of R&D expenditure and intellectual property applications. The sponsors of the 1999 scoreboard were IBISWorld and IP Australia.

The Contours of Restructuring and Downsizing in Australia This monograph, released in July 1999, identified ‘good’ and ‘bad’ downsizers occupying extreme positions on the survivor syndrome scale, but also linked to outcome factor with productivity improvements following downsizing associated with the ‘good’ downsizers. In addition, the evidence suggested that downsizing was not associated with enhanced profitability, as measured over the two succeeding years. Finally, an emerging theme in the report was that there are conflicting views about whether any particular downsizing effort is successful or unsuccessful. This report is the first of two to be produced in the study. The second publication, to be released in 2000, will report on further research involving case studies of particular firms and industries as well as a population survey which seeks to identify the effects of downsizing on the labour market prospects of those who leave the downsizing enterprises.

STAFF PUBLICATIONS, SEMINARS, PRESENTATIONS … Book, Monographs and Published Research Reports Backhouse, R.E. and Creedy, J., From Classical Economics to the Theory of the Firm: Essays in Honour of D. P. O’Brien, Cheltenham, UK, Edward Elgar, 1999, ix + 299pp. Creedy, J., Economic Welfare: Concepts and Measurement, vol. 1, Cheltenham, UK, Edward Elgar, 1999, xliii + 343pp. Creedy, J., Economic Welfare: Concepts and Measurement, vol. 2, Cheltenham, UK, Edward Elgar, 1999, xi + 523pp. Creedy, J., Labour Mobility, Earnings and Unemployment: Selected Essays, Cheltenham, UK, Edward Elgar, 1999, xii + 303pp. Creedy, J., Modelling Indirect Taxes and Tax Reform, Cheltenham, UK, Edward Elgar, 1999, xvii + 212pp. Dawkins, P., Harris, M.S. and King, S., How Big Business Performs: Private Performance and Public Policy, St Leonards, Allen and Unwin, 1999. McMillen, J., O’Hara, J., Johnson, D.T. and Jackson, A., Australian Gambling Comparative History and Analysis, Melbourne, Victorian Casino and Gaming Authority, 262pp. Webster, E., The Economics of Intangible Investment, Cheltenham, UK, Edward Elgar, 1999, 118pp.

Contributions to Books Alston, J.M., Harris, M.S., Mullen, J.D. and Pardey, P.G., “Agricultural R&D policy in Australia”, in Alston, J.M., Pardey, P.G. and Smith, V.H., Paying for Agricultural Productivity, Washington, International Food Policy Research Institute, 1999, pp118–171. Backhouse, R.E. and Creedy, J., “Introduction: Denis O’Brien’s contribution to economics and the history of economic thought”, in Backhouse, R.E. and Creedy, J. eds, From Classical Economics to the Theory of the Firm, Cheltenham, UK, Edward Elgar, 1999, pp1 – 13. Bosworth, D., Dawkins, P., Harris, M.N. and Kells, S., “Business focus and profitability”, in Dawkins, P., Harris, M.S. and King, S., How Big Business Performs: Private Performance and Public Policy, St Leonards, Allen and Unwin, 1999, pp68–79. Bosworth, D. and Rogers, M., “R&D and profitability”, in Dawkins, P., Harris, M.S. and King, S., How Big Business Performs: Private Performance and Public Policy, St Leonards, Allen and Unwin, 1999, pp68–80. Creedy, J., “The analysis of labour market flows using a continuous time model”, in Creedy, J., Labour Mobility, Earnings and Unemployment, Cheltenham, UK, Edward Elgar, 1999, pp23–32. Creedy, J., “Concepts of welfare change and excess burden, economic welfare: concepts and measurement”, in Blaug, M. ed., The International Library of Critical Writings in Economics, Cheltenham, UK, Edward Elgar, ppix–xliii. Creedy, J., “Estimating the duration of unemployment”, in Creedy, J., Labour, Mobility, Earnings and Unemployment, Cheltenham, UK, Edward Elgar, 1999, pp16–22. Creedy, J., “Lifetime versus annual income distribution”, in Silber, J, Handbook of Income Inequality Measurement, Boston, Kluwer, 1999, pp513–534. Creedy, J., “Measuring welfare changes and the excess burden of taxation”, in Slottje, D.J., Advances in Econometrics, Income Distribution and Scientific Methodology: Essays in Honor of Camilo Dagum, New York, USA, PhysicaVerlag, 1999, pp103–170. Creedy, J., “The theory of exchange in retrospect”, in Backhouse, R.E. and Creedy, J., From Classical Economics to the Theory of the Firm, Cheltenham, UK, Edward Elgar, 1999, pp154 – 174.

Creedy, J. and Borooah, V., “The temporarily versus the permanently poor: measuring poverty in a two-period context”, in Vasudevan, A., Nachane, D.M. and Karnik, A.V., Fifty Years of Development Economics: Essays in Honour of Professor P. R. Brahmananda, Mumbai, India, Himalaya Publishers, 1999, pp92 –103. Creedy, J. and Hurn, A.S., “Distributional preferences and the extended Gini measure of inequality” in Slottje, D.J., Advances in Econometrics, Income Distribution and Scientific Methodology: Essays in Honor of Camilo Dagum, New York, USA, Physica-Verlag, 1999, pp234 – 241. Dawkins, P., Harris, M.S. and King, S., “Big business and policy” in Dawkins, P., Harris, M.S. and King, S., How Big Business Performs: Private Performance and Public Policy, St Leonards, Allen and Unwin, 1999, pp111–126. Dawkins, P., Harris, M.S. and King, S., “Big business in Australia: the Lessons”, in Dawkins, P., Harris, M.S. and King, S., How Big Business Performs: Private Performance and Public Policy, St Leonards, Allen and Unwin, 1999, pp179– 182. Dawkins, P., Harris, M.S. and King, S., “Big business, private performance and public policy: an introduction”, in Dawkins, P., Harris, M.S. and King, S., How Big Business Performs: Private Performance and Public Policy, St Leonards, Allen and Unwin, 1999, pp3–11. Dawkins, P., Harris, M.S. and King, S., “The private performance of big business: an overview” in Dawkins, P., Harris, M.S. and King, S., How Big Business Performs: Private Performance and Public Policy, St Leonards, Allen and Unwin, pp47–54. Feeny, S. and Rogers, M., “What’s happened to big business profits in Australia?”, in Dawkins, P., Harris, M.S. and King, S., How Big Business Performs: Private Performance and Public Policy, St Leonards, Allen and Unwin, 1999, pp27– 46. Harding, D., “International capital flows, exchange rates and macroeconomic policy” in Working with Peers for Financial Reforms in East Asia, Manila, Foundation for Community-Building in the Asia-Pacific, 1999, pp37–50. Johnson, D.T., “Gambling, economics and culture” in Costar, B. and Economou, N., The Kennett Revolution: Victorian Politics in the 1990s, Sydney, University of New South Wales Press, 1999, pp174–185. Rogers, M., “Innovation and public policy”, in Dawkins, P., Harris, M.S. and King, S., How Big Business Performs: Private Performance and Public Policy, St Leonards, Allen and Unwin, 1999, pp160–178. Webster, E., “Technological progress and effective demand: a Kaleckian perspective”, in Sardoni, C. and Kriesler, P., Keynes, Post-Keynesianism and Political Economy, London, Routledge, 1999, pp418–432.

Journal Articles Atkinson, M.E., Creedy, J. and Knox, D.C.M., “Alternative retirement income arrangements and lifetime income inequality: lessons from Australia”, International Tax and Public Finance, Netherlands, Kluwer, 1999, 6(1):103–117. Atkinson, M.E., Creedy, J. and Knox, D.C.M., “Some implications of changing the tax basis for pension funds”, Fiscal Studies, UK, The Institute for Fiscal Studies, June 1999, 20(2):189–203. Boehm, E.A. and Summers, P.M., “Analysing and forecasting business cycles with the aid of economic indicators”, International Journal of Management Reviews, Oxford, Blackwell, 1999, 1(3):245–277. Brookes, R., Fry, T.R.L. and Harris, M.N., “Combining choice set partition tests for IIA: some results in the four alternative setting, Journal of Quantitative Economics, India, 1999, 14(2):1–9. Creedy, J., “D. P. O’Brien and the history of economic analysis”, History of Economics Review, Perth, Curtin University, Summer 1999, 30:1–17. Creedy, J., “Indirect tax reform in Australia: the welfare effects on different demographic groups”, Australian Economic Papers, Oxford, Blackwell, 1999, 38(4):367–392. Creedy, J., “Marginal indirect tax reform in Australia”, Economic Analysis and Policy, Queensland, Queensland Economic Society, 1999, 29(1):1–14. Creedy, J., “The rise and fall of Walras’s demand and supply curves”, Manchester School, Oxford, Blackwell, 1999, 67(2):192–202. Creedy, J., “Taxation, redistribution and progressivity: an introduction”, The Australian Economic Review, Oxford, Blackwell, 1999, 32(4):410–422.

Creedy, J., Amiel, Y. and Hurn, A.S., “Measuring attitudes towards inequality”, Scandinavian Journal of Economics, UK, Blackwell, 1999, 101(1):83–96. Creedy, J. and Dawkins, P., “Modelling the incentive effects of alternative tax and transfer systems”, Australian Social Policy, Canberra, Department of Family and Community Services, 1999, (1)61–74. Creedy, J. and Dixon, R.J., “The distributional effects of monopoly”, Australian Economic Papers, Oxford, Blackwell, 1999, 38(3):223–237. Creedy, J. and Martin, C., “How large are Australia’s greenhouse gas emissions?”, Economic Papers, Canberra, Economic Society of Australia, 1999, 18(1):53–62. Creedy, J. and van de Ven, J., “The effects of selected Australian taxes and transfers on annual and lifetime inequality”, Australian Journal of Labour Economics, Western Australia, Murdoch University, 3(1):1–22. Dawkins, P., “A plan to cut unemployment in Australia: an elaboration on the ‘five economists’ letter to the Prime Minister, 28th October 1998”, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (1):48–59. Dawkins, P. and Gruen, N., “The BCA’s wage–tax trade-off proposal: on reflection”, BCA Papers, Melbourne, Business Council of Australia, 1999, 1(2):88–97. Dawkins, P. and Loundes, J., “The Victorian State Budget, 1999–2000”, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends: Victorian Supplement, Melbourne, Melbourne Institute of Applied Economic and Social Research, (2):9–16. Evans, M.D.R., “Conflict between the unemployed and workers in 20 nations”, Australian Social Monitor, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, 2(2):25–30. Evans, M.D.R., “Medical care and risky conventional lifestyles: blame, sympathy and financial responsibility”, Australian Social Monitor, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, 2(5):97–103. Evans, M.D.R., “What form should government old age pensions take: citizen attitudes”, Australian Social Monitor, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, 2(3):57–62. Evans, M.D.R. and Kelley, J., “Small families or large? Australia in international perspective”, Australian Social Monitor, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, 2(1):13–19. Fisher, L. and Huh, H., “Work exogeneity and long-run and contemporaneous identifying restrictions in VEC models”, Economics Letters, Lausanne, Elsevier Science, 1999, 63(5):159–165. Harding, D., “A case for ‘market friendly’ reform of health care financing”, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (2):52–73. Harding, D. and Huh, H., “Australian indicators”, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (4):12–17, (2):13–18. Harding, D. and Huh, H., “Forecasts of key economic indicators”, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (2):19–26. Harding, D. and Huh, H., “International indicators”, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (4):3–11. Harding, D. and Kenyon, P., “Theories of franchising”, The Journal of Contemporary Issues in Business and Government, Perth, Curtin University of Technology, 1999, 5(1):54–64. Harding, D. and Loundes, J., “Policy watch: employment initiatives”, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (1):35–47. Henry, O.T. and Summers, P.M., “The volatility of real exchange rates: the Australian case”, Australian Economic Papers, Oxford, Blackwell, 1999, 38(2):79–90. Huh, H., “Australian indicators”, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (3):12–18, (1):15–19. Huh, H., “How well does the Mundell-Fleming model fit Australian data since the collapse of Bretton Woods?”, Applied Economics, London, Chapman and Hall, 1999, 31(3):397–407. Huh, H. and Loundes, J., “Forecasts of key Victorian economic indicators”, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends: Victorian Supplement, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (1–2):5–8.

Huh, H. and Loundes, J., “International indicators”, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (2):3–12. Huh, H. and Loundes, J., “The States”, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (1):28–34. Jensen, B., Dawkins, P., Littler, C.R. and Valenzuela, M.R., “Organisational downsizing: what happens to those left behind?”, Australian Social Monitor, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, 2(4):78–82. Johnson, D.T., “Impact of new legislation on households”, Family Matters, Melbourne, Australian Institute of Family Studies, 1999, (54):55–59. Johnson, D.T., “Introduction to the policy forum on the inflation target”, The Australian Economic Review, Melbourne, Blackwell, 1999, 32(1):62–63. Johnson, D.T., “Some aspects of health reform in Australia”, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (2):35–51. Johnson, D.T. and Dixon, P.B., “Australian poverty quantified by a family based poverty index”, The Economic Record, Melbourne, The Economic Society of Australia, 1999, 75(229):103–114. Kelley, J., “Attitudes to foreign trade in 16 nations”, Australian Social Monitor, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, 2(2):42–43. Kelley, J., “Australians’ views about the theory of evolution”, Australian Social Monitor, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, 2(5):114–119. Kelley, J., “Confidence in universities: Australia 1984–1996”, Australian Social Monitor, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, 2(3):49–56. Kelley, J. and Evans, M.D.R., “Attitudes toward abortion: Australia in comparative perspective, Australian Social Monitor, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, 2(4):83–90. Kelley, J. and Evans, M.D.R., “Data surveys: Australian and international survey data for multivariate analysis: the ISSSA”, The Australian Economic Review, Oxford, Blackwell, 1999, 32(3):298–303. Kelley, J. and Evans, M.D.R., “Non-Catholic private schools and educational success”, Australian Social Monitor, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, 2(1):1–4. Kelley, J., Evans, M.D.R., Mearns, M. and Headey, B., “Monarchy, republic, parliament and the people: 20 years of survey evidence”, Australian Social Monitor, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, 2(5):104–113. Kelley, J. and Zagorski, K., “Changing attitudes toward income inequality in East and West”, Australian Social Monitor, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, 2(1):5–8. Loundes, J., “Overseas arrivals and departures”, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends: Victorian Supplement, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (1):8–13. Loundes, J., “The States”, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (4):33–40, (3):27–35. Loundes, J., “Victorian consumer sentiment”, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends: Victorian Supplement, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (4):9–16. Loundes, J., “Victorian economic indicators”, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends: Victorian Supplement, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (4):2–4, (3):2–4. Loundes, J., “Victorian indicators”, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends: Victorian Supplement, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (2):2–4. Loundes, J., “Victorian saving patterns”, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends: Victorian Supplement, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (3):10–22. Loundes, J., Summers, P.M., “Victorian indicators”, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends: Victorian Supplement, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (1):2–4. Rogers, M., “Monopoly power, innovation and economic growth”, The Australian Economic Review, Oxford, Blackwell, 1999, 32(1):96–104.

Scutella, R., “The final incidence of Australian indirect taxes”, The Australian Economic Review, Oxford, Blackwell, 1999, 32(4):349–368. Summers, P.M., “Forecasts of key economic indicators”, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (1):20–27, (3):18–26. Summers, P.M., “Forecasts of key Victorian economic indicators”, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends: Victorian Supplement, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (1):5–7, (4):5–8, (4):18–32. Summers, P.M., “International indicators”, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (1):3–14, (3):3–11. Summers, P.M., “Macroeconomic forecasting at the Melbourne Institute”, The Australian Economic Review, Oxford, Blackwell, 1999, 32(2):197–205 Summers, P.M. and Loundes, J., “Forecasts of key Victorian economic indicators”, Mercer – Melbourne Institute Quarterly Bulletin of Economic Trends: Victorian Supplement, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (3):5–9. Valenzuela, M.R., “Costs of children and living standards in Australian households”, Australian Social Monitor, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, 2(2):31–36. Webster, E., “Job network: what can it offer?”, Just Policy, Melbourne, Victorian Council of Social Service, 1999, (17):32–42. Webster, E., “Kalecki’s ceteris paribus ‘dynamics’”, Review of Political Economy, London, Carfax, 1999, 11(1):19–32. Webster, E., “Labour market programs and the Australian Beveridge curve: 1978 to 1997”, The Economic Record, Melbourne, Economic Society of Australia, 1999, 75(231):405–416. Webster, E., “Macroeconomic evaluations of labour market programs”, Economic and Labour Relations Review, Sydney, The University of New South Wales, 1999, 10(1):107–125. Webster, E., “Occupational profiles of men since 1947”, Australian Journal of Labour Economics, Perth, Centre for Labour Market Research, 1999, 3(2). Webster, E., “Superannuation: why choose it?”, Australian Social Monitor, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, 2(1):9–12.

Conference Proceedings Creedy, J., “Population ageing and the growth of social expenditure”, conference paper presented in Melbourne, 18/3/ 99, in Baker, M., Dawkins, P., Kerr, R. and Williams, L., Policy Implications of the Ageing of Australia’s Population: Conference Proceedings, Canberra, AusInfo, 1999, vol. 1, pp229–251. Monadjemi, M. and Huh, H., “Monetary transmission mechanism: some international evidence”, paper presented at “Business and Economics Society International Conference”, 22–26 July 1999, Canary Islands, Spain, 1999, in Kantarelis, D., Business and Economics for the 21st Century, USA, Business and Economics Society International, vol. 3:411–422. Summers, P.M. and Henry, O.T., “International influences on the Australian business cycle: evidence from linear and nonlinear models”, presented at the “1999 Australasian Meetings of the Economic Society”, Sydney, 7–9 July 1999, in Hall, T. ESAM99, Sydney, University of Technology, 1999.

Working Papers, Indicator Reports and Unpublished Reports Anderson, M., Harding, G. and Liew, W.T., Life After Graduation: Our 1997 Graduates in 1998, Parkville, The University of Melbourne, 1999, 88pp. Boehm, E.A. and Summers, P.M., “Analysing and forecasting business cycles with the aid of economic indicators”, Melbourne Institute Working Paper Series, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (18):50pp.

Creedy, J., “D. P. O’Brien’s contribution to the history of economic analysis”, The University of Melbourne, Department of Economics Research Paper, Parkville, The University of Melbourne, 1999, (674):33pp. Creedy, J., “Modelling indirect tax reform in Australia: should tax rates be uniform?”, The University of Melbourne, Department of Economics Research Paper, Parkville, The University of Melbourne, 1999, (686):48pp. Creedy, J., “Take-up of means-tested benefits with labour supply variations”, The University of Melbourne, Department of Economics Research Paper, Parkville, The University of Melbourne, 1999, (695):13pp. Creedy, J. and Dawkins, P., “Comparing tax and transfer systems: can incentive effects make a difference”, Melbourne Institute Working Paper Series, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (5):28pp. Creedy, J. and Dawkins, P., “Comparing tax and transfer systems: can incentive effects make a difference?”, The University of Melbourne, Department of Economics Research Paper, Parkville, The University of Melbourne, 1999, (672):31pp. Creedy, J. and Duncan, A., “Welfare, non-linear budget constraints and behavioural microsimulation”, The University of Melbourne, Department of Economics Research Paper, Parkville, The University of Melbourne, 1999, (688):42pp. Creedy, J. and Gemmell, N., “The built-in flexibility of consumption taxes”, The University of Melbourne, Department of Economics Research Paper, Parkville, The University of Melbourne, 1999, (704):24pp. Creedy, J. and van de Ven, J., “Decomposing redistributive effects of taxes and transfers in annual and lifetime contexts”, The University of Melbourne, Department of Economics Research Paper, Parkville, The University of Melbourne, 1999, (703):16pp. Dawkins, P., Annual Report 1998 and Outlook 1999–2000, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, 35pp. Dawkins, P., Johnson, D.T., Anderson, M. and Harding, G., “Employer feedback on quality of university graduates: evaluation cycle 1998: external report”, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, 51pp. Dawkins, P., Johnson, D.T., Anderson, M. and Harding, G., “Employer feedback on quality of university graduates: evaluation cycle 1998: internal report”, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, 64pp. Dawkins, P., Littler, C.R., Valenzuela, M.R. and Jensen, B., “The contours of restructuring and downsizing in Australia”, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, 129pp. Feeny, S. and Rogers, M., “Market share, concentration and diversification in firm profitability”, Melbourne Institute Working Paper Series, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (20):40pp. Feeny, S. and Rogers, M., “The performance of large private Australian enterprises”, Melbourne Institute Working Paper Series, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (2):32pp. Feeny, S. and Rogers, M., “The profit and corporate income tax performance of Australian corporates: an ATO–Melbourne Institute Project”, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (2):53pp. Harding, D., “International capital flows, exchange rates and macroeconomic policy”, Melbourne Institute Working Paper Series, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (24):13pp. Harding, D. and Pagan, A., “Dissecting the cycle”, Melbourne Institute Working Paper Series, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (13):31pp. Harding, D. and Pagan, A., “Knowing the cycle”, Melbourne Institute Working Paper Series, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (12):36pp. Harding, D. and Valenzuela, M.R., Melbourne Institute Household Savings Report, Melbourne, Melbourne Institute of Applied Economic and Social Research, March, May and August 1999, 6pp. Harding, D. and Valenzuela, M.R., Mercantile Mutual – Melbourne Institute Household Savings Report, Melbourne, Melbourne Institute of Applied Economic and Social Research, December Quarter 1999, 26pp. Harris, M.N. and Feeny, S., “The determinants of corporate effective tax rates: evidence from Australia”, Melbourne Institute Working Paper Series, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (21):24pp. Harris, M.N. and Loundes, J., “Unobserved heterogeneity and inter-industry wage premiums”, Melbourne Institute Working Paper Series, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (4):21pp.

Harris, M.N., Loundes, J. and Webster, E., “Determinants of household saving in Australia”, Melbourne Institute Working Paper Series, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (22):23pp. Harris, M.S., Rogers, M. and Tseng, Y., “Exploring SME performance in Australia: an Analysis of the Business Longitudinal Survey”, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, 79pp. Huh, H., Harding, D. and Summers, P.M., Westpac – Melbourne Institute Indexes of Economic Activity, Melbourne, Melbourne Institute of Applied Economic and Social Research, March–November 1999, (165–174):13pp. Johnson, D. and Derham, R., Poverty Lines: Australia, Melbourne, Melbourne Institute of Applied Economic and Social Research, March, June, September and December 1999, 4pp. Johnson, D.T., Freebairn, J. and Scutella, R., Evaluation of the Government’s Tax Package, Tax Reform: Equity and Efficiency, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (4):47pp. Loundes, J., “Household saving behaviour in Australia”, Melbourne Institute Working Paper Series, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (17):27pp. Loundes, J., “Labour productivity in Australian workplaces”, Melbourne Institute Working Paper Series, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (19):26pp. Loundes, J., Melbourne Institute Survey of Consumer Inflationary Expectations: Monthly Report, Melbourne, Melbourne Institute of Applied Economic and Social Research, January–December 1999, 2pp. Loundes, J., Westpac – Melbourne Institute Survey of Consumer Sentiment: NSW, Victoria, Queensland, Western Australia: Quarterly Report, Melbourne, Melbourne Institute of Applied Economic and Social Research, March, September and December 1999, 9pp. Loundes, J. and Scutella, R., Westpac – Melbourne Institute Survey of Consumer Sentiment: Monthly Report, Melbourne, Melbourne Institute of Applied Economic and Social Research, January–December 1999, 7pp. Rogers, M., “Innovation in Australian workplaces: an empirical analysis using AWIRS 1990 and 1995”, Melbourne Institute Working Paper Series, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (3):28pp. Rogers, M., “The performance of small and medium enterprises: an overview using the Growth and Performance Survey”, Melbourne Institute Working Paper Series, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (1):28pp. Rogers, M. and Feeny, S., Modelling and Benchmarking Profitability: an ATO-Melbourne Institute Project, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (3):107pp. Rogers, M. and Feeny, S., R&D and Intellectual Property Scoreboard 1999: Benchmarking Innovation in Australian Enterprises, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, 30pp. Scutella, R., “Labour supply estimates for married women in Australia”, Melbourne Institute Working Paper Series, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (25):24pp. Tseng, Y., Melbourne Institute Wages Report: Quarterly Report, Melbourne, November 1999, 6pp Valenzuela, M.R., “Costs of children and living standards in Australian households”, Melbourne Institute Working Paper Series, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (8):38pp. Webster, E., “The growth of enterprise intangible investment”, Melbourne Institute Working Paper Series, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (9):27pp. Webster, E., Melbourne Institute Wages Report: Quarterly Report, Melbourne, Melbourne Institute of Applied Economic and Social Research, February, May and August 1999, 6pp. Webster, E., “Occupational profiles of men since 1947”, Melbourne Institute Working Paper Series, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (23):27pp. Webster, E. and Summers, P.M., “The effect of labour market programs on wage inflation”, Melbourne Institute Working Paper Series, Melbourne, Melbourne Institute of Applied Economic and Social Research, 1999, (16):23pp.

Presentations at Seminars, Conferences and Other Events Dawkins, P., “A plan to cut unemployment in Australia”, Economic Society of Australia seminar, Canberra, Kurrajong Hotel, 29 March 1999.

Dawkins, P., “Employment in the new millennium”, Head, Heart and Spirit: Shaping the Millennium conference, Melbourne, Anglicare, 21 May 1999. Dawkins, P., “Globalisation and the labour market”, Futures Seminar, Canberra, Department of Finance and Administration, 20 May 1999. Dawkins, P., “The policy implications of an ageing population: some key findings from the Productivity Commission – Melbourne Institute conference”, Melbourne Institute Business Economics Forum quarterly briefing no.3, Melbourne, Hotel Sofitel, 14 September 1999. Dawkins, P., “Rebuilding the safety net: reducing unemployment”, New Directions: Re-building the Safety Net conference, Melbourne, Business Council of Australia, 29 April 1999. Dawkins, P., “Skills of our future”, Employment Victoria Skills Summit, Melbourne, Employment Victoria, 25 June 1999. Dawkins, P., “Some key findings from the Productivity Commission – Melbourne Institute conference”, Melbourne Institute Public Economics Forum quarterly luncheon no.3, Canberra, Grand Hyatt, 21 September 1999. Dawkins, P., “The sources of the profitability of big business in Australia: an overview of findings in How Big Business Performs”, Big Issues for Big Business conference, Parkville, The University of Melbourne, 25 November 1999. Dawkins, P., “Victorian Budget 1999–2000”, Victorian 1999–2000 Budget Forum, Melbourne, Economic Society of Australia, 6 May 1999. Dawkins, P., Keating, M. and Richardson, C., “Unemployment: The five economists plan: a presentation and panel of questioners”, Melbourne Institute Public Economics Forum quarterly luncheon no.1, Canberra, Parliament House, 30 March 1999. Harding, D., “Dissecting the cycle”, Clayton, Monash University, 19 November 1999. Harding, D., “Dissecting the cycle’, Seminar, Parkville, The University of Melbourne, June 1999. Harding, D., “Dissecting the cycle a methodological investigation”, Forecasting and Business Cycle Analysis: Frontier Techniques conference, Parkville, The University of Melbourne, 15 October 1999. Harding, D., “Evaluation of the Melbourne Institute’s forecasting record”, Melbourne Institute Business Economics Forum quarterly briefing no.2, Melbourne, Hotel Sofitel, 16 June 1999. Harding, D., “International capital flows, exchange rates and macroeconomic policy’, Technical Workshop on Financial Sector Reforms and the Restructuring of Bank and Non-Bank Corporations, Singapore, Pacific Economic Cooperation Council, the Institute of Southeast Asian Studies and the World Economic Forum, 23–24 August 1999. Harding, D., “Knowing the cycle’, Fourth Australian Macroeconomics Workshop, Canberra, Australian National University, April 1999. Harding, D., “Knowing the cycle’, Sandiego do Compestella, Spain, Econometric Society Meeting, 1 September 1999. Harding, D., “Knowing the cycle”, Sydney, Econometric Society Australasian Meetings, 8 July 1999. Harding, D., “Knowing the cycle’, Sydney, Macquarie University, March 1999. Harding, D., “A proposal for reforming the financing of health care in Australia”, Melbourne Institute Public Economics Forum quarterly luncheon no.1, Canberra, Grand Hyatt, 22 June 1999. Harding, D., “A proposal to restructure employment benefits”, Melbourne Institute Business Economics Forum quarterly briefing no.1, Melbourne, Grand Hyatt, 24 March 1999. Harding, D., “Quarterly economic briefing”, Melbourne Institute Public Economics Forum quarterly luncheon no.4, Canberra, Grand Hyatt, 7 December 1999. Harris, M.N., “A model for ordered data with clustering of observations’, Department of Econometrics Seminar Series, Clayton, Monash University, 17 September 1999. Harris, M.N., “A model for ordered data with clustering of observations’, Department of Economics Seminar Series, Hobart, University of Tasmania, 6 August 1999. Harris, M.S., “Assessing the performance of small–medium enterprises”, Presentation to the Australian Consortium of Small–Medium Enterprise Research, Adelaide, The Flinders University of South Australia, 30 November 1999. Harris, M.S., “Assessing the performance of small–medium enterprises”, Presentation to the Australian Enterprises Management Committee, Melbourne, Productivity Commission, 9 September 1999. Johnson, D.T., “Impact of tax changes on households”, Melbourne, Institute of Family Studies, 21 October 1999. Johnson, D.T., “Reform of indirect taxation”, Taxation Reform: Directions and Opportunities conference, Parkville, The University of Melbourne, 18–19 February 1999.

Johnson, D.T., “Workplace relations”, Bertelsmann Foundation Social Reform Monitor, Gutersloh, Germany, Bertelsmann Foundation, 22 May 1999. Littler, C.R. and Dawkins, P., “Downsizing and restructuring in Australia”, Big Issues for Big Business conference, Parkville, The University of Melbourne, 26 November 1999. Loundes, J., “Determinants of household savings”, 28th Conference of Economists, Bundoora, La Trobe University, 29 September 1999. Rogers, M., Harris, M.N. and Feeny, S., “Modelling and benchmarking profitability”, Canberra, Australian Taxation Office, 25 August 1999. Rogers, M., Harris, M.N. and Feeny, S., “Modelling profitability: preliminary results”, Canberra, Australian Taxation Office, 5 March 1999. Summers, P.M., “Are Australian business cycles ‘real’?”, 4th Macroeconomics Workshop, Canberra, University House, The Australian National University, 8 April 1999. Summers, P.M., “A Bayesian VAR model of the Chinese economy”, Modelling the Chinese Economy conference, Beijing, China, Chinese Academy of Social Sciences, 7 December 1999. Summers, P.M., “Economic update”, Melbourne Institute Business Economics Forum quarterly briefing no.4, Melbourne, Hotel Sofitel, 30 November 1999. Summers, P.M., “Forecasting and conditional projections using the Melbourne Institute model”, Forecasting and Business Cycle Analysis: Frontier Techniques conference, Parkville, The University of Melbourne, 15 October 1999. Summers, P.M., “Forecasting and conditional projections using the Melbourne Institute model”, Sydney, Reserve Bank of Australia, 19 November 1999. Summers, P.M., “Forecasting and conditional projections using the Melbourne Institute model”, Sydney, University of New South Wales, 16 November 1999. Summers, P.M., “Forecasting and conditional projections using the Melbourne Institute model”, 28th Conference of Economists, Bundoora, La Trobe University, 28 September 1999. Summers, P.M., “International influences on the Australian business cycle: evidence from linear and non-linear models”, Econometric Society Australasian Meetings, Sydney, University of Technology, 7 July 1999. Summers, P.M., “Melbourne Institute economic update”, Melbourne Institute Business Economics Forum quarterly briefing no.3, Melbourne, Hotel Sofitel, 24 March 1999, 16 June 1999, 14 September 1999. Summers, P.M., “Melbourne Institute economic update”, Melbourne Institute Public Economics Forum quarterly luncheon no.3, Canberra, Grand Hyatt, 21 September 1999. Summers, P.M., “Why do forecasters get it wrong?”, 28th Conference of Economists, Melbourne, Hilton on the Park, 30 September 1999. Tseng, Y., “The experience, cohort and year effect on wages – an empirical study of Taiwan”, 28th Conference of Economists, Bundoora, La Trobe University, 22 September 1999 Webster, E., Discussant at the Econometric Labour Workshop, Parkville, The University of Melbourne, 16 April 1999. Webster, E., “The growth of intangible capital in Australia”, ANU Seminar, Canberra, The Australian National University, 13 August 1999. Webster, E., “Occupational profiles of men since 1947”, ANU Labour Lunch, Canberra, The Australian National University, 12 August 1999. Webster, E., “Occupational profiles of men since 1947”, Melbourne Institute Monday Workshop, Parkville, The University of Melbourne, 9 August 1999. Webster, E., “Unemployment policies for Australia”, ALP Policy Conference, Melbourne, RMIT, 23 July 1999.

Media Coverage There were 522 references to the Melbourne Institute identified in the print media and radio/television in 1999. This was an increase of 264 on 1998. Nine of these references were to opinion page articles in the Australian Financial Review or the Sydney Morning Herald as follows:

Creedy, J. and Dawkins, P., “Means test fails to offer right incentive”, Australian Financial Review, 15 September 1999, p19. report about the Policy Implications of Australia’s Ageing Populations. Dawkins, P., “Balancing soft hearts and hard heads in the lucky country”, Australian Financial Review, 15 April 1999, pp4–5. Dawkins, P., “The drive for profits”, Australian Financial Review, 5 November 1999, p1 of Review Section. Dawkins, P., “How to hit Costello’s 5pc target”, Australian Financial Review, 2 February 1999. Dawkins, P. and Buckingham, D., “Trade-off gives credit to those who just want to work”, Australian Financial Review, 9 June 1999, p21. Dawkins, P. and Richardson, C., “Jobs plan looks even stronger”, Australian Financial Review, 9 March 1999, p16. Freebairn, J., “All that we need is a variation on plan A”, The Sydney Morning Herald, 17 May 1999, p13. Johnson, D. and Freebairn, J., “Good plan could be better”, Australian Financial Review, 17 May 1999, p20. Kelley, J., “Free trade report exposes NIMBY traits”, Australian Financial Review, 7 July 1999, p21.

FINANCE AND PERFORMANCE INDICATORS Table 1: Income and Expenditure of the Melbourne Institute 1996â&#x20AC;&#x201C;99 1996

1997

1998

1999

$1,105,576

$1,366,062

$1,742,783

$2,032,641

Subscription Services

$211,828

$277,838

$326,978

$376,613

Research Consultancies

$610,183

$736,501

$728,057

$1,068,191

Grants

$283,565

$351,723

$687,748

$587,837

$200,000

$175,000

$150,000

Income Non-University Funds made up of

Faculty of Economics Base Grant Other University Funds Total Income

$224,499

$214,500

$218,390

$125,125

$1,530,075

$1,755,562

$2,111,173

$2,307,766

$1,080,257

$1,179,267

$1,423,132

$1,482,567

Expenditure Salaries Other Expenditure

$387,178

$571,472

$676,060

$824,817

Total Expenditure

$1,467,435

$1,750,739

$2,099,192

$2,307,384

$62,640

$4,823

$11,981

$383

Surplus

Table 2: Performance Indicatorsa 1996

1997

1998

1999

$207,400

$234,128 13%

$346,577 48%

$380,952 10%

$77,500

$199,316 157%

$341,171 71%

$361,938 6%

Industry and Other Research Funds

$304,317

$503,475 65%

$550,857 9%

$630,050 14%

Total External Research Income

$589,217

$936,921 59%

$1,238,605 32%

$1,372,940 11%

Refereed Journal Articles

12 9%

34 183%

41 20%

Total Publications

71 42%

115 61%

156 35%

Research Higher Degree Students (Full-Time Equivalent)

2.5

4.5 80%

5 11%

3 –40%

–

135

175 30%

258 47%

505 96%

Value of Subscriptions and Sponsorships

$379,828

$448,338 18%

$504,178 12%

$528,472 5%

References to the Melbourne Institute in the Media

116

193 66%

213 10%

303 42%

$1,530,075

$1,755,562 15%

$2,111,173 20%

$2,307,766 9%

10.20

11.70 15%

14.07 20%

15.91 13%

Research Performance Research Income

National Competitive Research Grants Other Public Research Grants

Publications

Higher Degree Students

Research Higher Degree Completions Business, Government and Public Policy Debates

See page 18

Subscriptions to Melbourne Institute Products (excluding Australian Economic Review)

Financial Performance Total Income Multiplier Effect for the University (ratio of total income to the Faculty’s base-line funding)

(a) The percentages show increases/decreases from 1996 to 1997. The figures for 1996 exclude the Asian Business Centre which has since been transferred to the Department of Economics. These figures are provisional. In particular the measures of research output need to be confirmed.