Less deregulation for more rprosperity | Week 4

James Ledger

The office has been feeling empty this week, with several staff members heading down to Florida for a summit of like-minded organisations. With that, though, came a bigger workload for me and more responsibilities.

We’ve been working on a promotional feature with Mike Rowe, the narrator, and host of the Discovery Channel series ‘Dirty Jobs’ and the CNN series ‘Somebody’s Gotta Do It’. I hadn’t heard of him before I came to America but I’ve since learnt that he’s quite a big deal.

I was tasked with helping create two landing pages on the FEE website for the promotion, which invites readers to fill out a brief survey about FEE and Mike Rowe to receive a free copy of FEE co-founder Henry Hazlitt’s book ‘Economics in One Lesson’. It’s limited to the first 500 people which to me sounded quite significant, but since seeing that Mike has over 4.5 million Facebook followers I don’t think it will last long!

I also started writing two articles this week. The first is about Airbnb in the wake of another attempt to further regulate it in Australia (I’m looking at you, Daniel Andrews). I plan to argue that this pillar of the sharing economy is already regulated, though just not by the government. It’s privately regulated the same way Uber is, by reviews and rating systems. If a consumer is unsatisfied with their stay they’ll write a negative review. This will caution others against staying but also incentivize the host to up their standards into the future. This is beneficial to everyone. Indeed, Airbnb doesn’t have to operate within the strict regulatory framework that hotels do. But if the service is something people want – which they do – then it would take a seriously ambitious government (Andrews) to discourage its place in the market. The rise of Airbnb may even force governments to reduce the regulatory burden on hotels to ensure their competitiveness. This is what they should do instead of increasing taxes on both.

The second article argues in favour of the Coalition’s proposed company tax reduction targets, but also states they don’t go far enough. In the wake of the US withdrawing from the TPP, Australia needs to find other ways of being economically attractive to business despite the trade deal’s actual effectiveness being questioned.

Given the prospect of a 15% corporate tax rate in America, moving the Australian rate to 25% in ten years doesn’t appear too ambitious. But it may not be that beneficial, either. Britain plans to further cut their taxes to 17% by 2020, and with Singapore at 17.5% and Canada boasting 15%, the current Australian rate of 30% is wildly non-competitive. I think 25% in ten years will be too late. ‘That horse has already run’, they’ll say.

In my spare time this week I explored the uptown area of Buckhead and the Atlantic Station district and started educating myself on Bitcoin after years of semi-understanding it. If you’re interested, I suggest reading Steve Patterson’s ‘What’s the Big Deal about Bitcoin?’. He explains it in layman’s terms which is wonderfully refreshing.

I hope everyone enjoyed Australia Day! See you next week.