Conversation with Ian Harper

Conversation with Ian Harper

Words by committee member Owen Pethica

Tuesday, 6th May saw the second installment of the Norman lecture series take place in the Faculty of Business and Economics. ESSA’s guest for the evening was the reputable Australian economist Ian Harper; a man with extraordinarily varied experience, having spent time working with the RBA, serving on the academic staff at the Melbourne Business School, forming a part of many government enquiries including the Abbott government’s newly formed Competition Policy Review panel, as well as being a partner at Deloitte Access Economics, the economic consultancy firm within Deloitte.

The evening revolved around a discussion between Melbourne University’s own Neville Norman and Ian Harper, covering topics as broad as latter’s secondary school education in Queensland, through to discussion of the wider macroeconomy. Ian was a repository of advice, going to great lengths to explain the professional hierarchy and conduct of the economic profession, as well as recounting his own path to professional success. He spoke to the importance of finding mentors – not necessarily people with whom you caught up for coffee to discuss your progress, but rather the people you modelled yourself on from afar. Ian also suggested choosing work after university according to the criterion of “where am I able to do my best work, where can I have the greatest contribution?”

Harper discussed what he feels to be the growing dichotomy within professional economics. Likening it to the distinction between research and clinical medicine, he suggests that there are a group of economists on the fringe making important theoretical discoveries. He compares these economists to the research arm of medicine. Likewise, there are a group of economists practising applied economics and using their economic knowledge to private, government and public benefit; these are the economic analogues of medicine’s practicing doctors and clinicians. He suggests that there has been a movement away from the teaching of applied economics in universities, and that these skills are now more often taught in institutions such as the ABS and the Treasury.

Harper continued to give his opinions on the Federal Budget, suggesting that the primary issue was the fact that the budget is presently in structural deficit. This, he states, is what is catalysing the Liberal Party’s rhetoric around the need to “reduce the debt” – even if economic growth was ticking along and unemployment was at a level at which inflation was also stable, the budget would still be in deficit due to its structural deficiencies by 1-2% of GDP. Harper suggested that the RBA may be holding back on any rate change, and simply maintaining policy room in anticipation of the Federal Budget. If the government is to overstep the mark and cut too hard, the RBA is able to use its market operations to provide further stimulus. Harper also emphasised the fact that the Federal Budget is not the broader Australian macro-economy; whilst the budget is dealing with a raft of expenditure and equity issues, the Australian economy looks to be recovering, albeit in a subdued manner.

Segueing into his most recent endeavours, Harper described productivity growth as “the lever over which we have greatest control”. The win-win increase in aggregate supply derived from productivity growth is the focus of Harper, and the rest of the panel with which he sits on the Abbott Government’s Competition Policy Review. Suggestions for improving competition range from refreshing the Competition and Consumer Act to updating Australian regulatory authorities to using previously disregarded ideas from past inquiries such as the 1992 Hilmer Inquiry.

The conversation was then opened up to questions from the audience, with Harper fielding queries on everything from how to explain complex economic concepts to the wider public, to which sections of the economy he felt required particular attention in order to right the leaky budget ship.

The evening was a truly delightful experience for all involved. Many of us who are considering a career in economics at a later stage found ourselves walking away entirely re-enthused about the subject matter as if we were becoming passionate about economics all over again. Harper provided us with a level of insight scarcely available to university students, and we thank him immensely for spending his Tuesday evening with a bunch of economics students.