There are some really unfair tax concessions in Australia. Let's talk about just a couple of them:

Deductible interest repayments on investment property mortgages; and,Superannuation concessional tax rates.

Deductible Interest Repayments on Investment Property Mortgages

This is a classic! "If the deductibility was removed, it would make housing less affordable". This follows the concept that without a tax deduction, the benefits to the land lord are reduced, therefore they would try and regain these benefits by increasing the rent. Let's think this one through.

Firstly, the rent is a product of supply and demand of rental accommodation. Just because it costs the investor more doesn't mean the rental seeking market is going to be completely unresponsive to changes in price. Any renter is going to pay what they can reasonably afford. If a land lord puts the rent up to cover the increased cost of owning an investment property, they are likely to encounter more difficulties in finding a tenant. If the market was prepared to pay more based on today's wages, land lords would have already found that price-point.

So, rather than the land lord being a dominant price maker, they are actually part of a supply-demand equation, which has already found its equilibrium.

What is more likely to happen is this:

Nominal rental income will remain greatly unchanged.The rate of return an investor seeks to accept the risks associated with a residential investment property will remain unchanged.Removing the tax benefits means the cost of holding an investment property will increase, lowering the rate of return delivered to the investor.Therefore the property value will fall to re-establish the appropriate rate of return required for investment.

So, not only will prices fall, but the unfair advantage investors have compared to home buyers when a residential property is up for sale will also be removed. This will make the Australian dream of owning your own home more affordable, without having a material impact on rental prices.

Yes, a fall in property prices would have negative consequences for mortgage loan markets and for owners of investment property. But, for the benefit of a more equitable property market, more affordable property prices and a general reduction in benefits for the asset-rich compared to the asset-poor, any short-term pain is worth the long-term gain.

A much better, and fairer tax, would be to apply this deductibility to mortgages associated with new-build residential properties for a nominated number of years, or until sold, whichever occurs first.

Removing the deductibility in its current form would increase tax revenues and re-establish equity in the residential property market among home buyers versus investors. Applying deductibility to new-builds would increase the supply of available accommodation, putting further downward pressure on residential property prices.

Call that a win-win-win!

A further possible step is an increasing tax scale on property ownership. Those with surplus wealth should be encouraged to allocate this capital to fund areas of economic production, rather than the accumulation of passive assets such as residential property. A progressive, or increasing tax on property values in excess of a nominated amount would make alternative, more productive investments, comparatively more attractive.

By making residential property comparatively less attractive, it would reduce the demand for residential property from a demographic that are likely to have greater financial means than first home buyers, for example. This would further reduce upward price pressure on residential property, contributing to a more affordable housing market.

Superannuation Concessional Tax Rates

When, as is the case in Australia, you have a progressive income tax system (i.e. the tax rate increases as income increases), and at the same time the tax on concessional contributions to superannuation is flat, higher income earners have a greater benefit and therefore greater incentive to make superannuation contributions. This is illustrated below.

The purpose of superannuation is to provide a mechanism that will help support a self-funded retirement in order to alleviate the pressure on the federal budget, in particular, the age pension and associated social welfare payments for the retired. Now, it stands to reason that the individual earning a higher income will have a greater chance of achieving a self-funded retirement than the individual earning a lower income. Whether by ordinary savings or compulsory super contributions from their employer. It also seems reasonable that the lower income earner is likely to require more assistance from social welfare benefits in retirement.

So, while both individuals are still working and earning an income, why are we creating a greater incentive to make contributions to a self-funded retirement plan for the individual who needs it less and is less likely to burden the social welfare system anyway? Crazy! Right?!?

One change is obvious - tax super contributions, not at a fixed rate, but at a fixed discount to the comparative marginal income tax rate. So if the fixed discount is 15% and we repeat the scenario illustrated above, the person earning $30,000 with a marginal income tax rate of 19%, the tax on super contributions would be 4% (i.e. 19% - 15%). Similarly, the tax on super contributions for the high income earner would be 30% (i.e. 45% - 15%).

That way, lower income earners have just as much to gain from super contributions as high income earners.

A second change for consideration is a cap on when these benefits are applied. I mean, if someone has $20 million in a Self Managed Superannuation Fund, do they really need a concessional tax rate on their contributions? There should be a level, linked to some measure such as CPI, that, should your fund be above that level at the time of a contribution it does not receive discount tax treatment. While inside super, it receives the tax benefits, but not on the contribution.

Unintended benefits of this is that for those people near the limit, should they fall under at the start of a new year when the limit increases, they will make contributions early in the year to beat any anticipated asset price increases that will push them over the limit. Similarly, any time the market falls, lowering a fund value to below the threshold, tax advantages would be available to make contributions when markets have fallen, possibly encouraging a 'buy low' mentality to the management of the fund's investments.

The compulsory super contribution rate is the same for high income and low income earners, therefore, high income earners make more contributions to superannuation. A reduction in tax collected from low income earners, will be offset against increased tax collected from high income earners.

Tax revenue generated by removing concessional tax treatments on contributions made by those individuals with self-funded retirement plans beyond a nominated account balance limit will add further to the tax revenues.

Both of these tax policies combined can be reverse engineered to achieve a desired result for tax revenue, whether it be to replace the current revenues generated from super contributions tax, or to collect more taxes. Obviously, this would be determined by the need to incentivise contributions versus the need to generate tax revenues. This, all at the same time as a more equitable system for taxes on super.

Cars are parked 95% of the time (i). This is the consistent conclusion in a number of studies in different countries, using a variety of methodologies. What a waste of space!

Based on where you source your research, passenger vehicle journeys (excluding driver services such as taxis) take an average anywhere between 1 and 1.9 passengers per trip during peak hours.

So what does that tell us? Cars take up a lot of space and that space is going to waste for a lot of the life-time of each car.

Does any of this matter and why? Well… yes, it does matter.

Firstly, land scarcity. Think of the large parking bays at shopping centres and in high density areas such as the city. These are just a few examples where you will come across large areas of valuable land being used for storing our cars while we go to work and actually do something productive.

Secondly, traffic congestion. While it may be true that on most occasions a passenger vehicle journey will have only one or two passengers, we still need our five-seater. Why? Because the most common purpose of use is irrelevant. If we only need to travel with three people in a car a few times each year, a two-seater car is useless. This means that roads are built in lane-widths to accommodate a standard four or five-seater car. Therefore a road is fixed to a number of lanes, even though each lane could be thought of as a line of people standing in single file, especially in peak hour.

But what if the prime location car parks and other spaces could be made vacant? What if the highways and city streets could be instantly turned from three-lanes to five-lanes during peak hours?

Well, if you’ve not given much thought to the sporadicallly promoted driverless car and the possibilities that come with it, think again.

Sure, some of the obvious benefits are absolutely there – rather than driving and paying attention to the road, you can read, watch TV or a movie, chat to friends, get some work done or even catch up on some sleep. But the social and economic benefits go far beyond the immediate and personal. If a car isn’t being used 95% of the time, why shouldn’t someone else use it? I mean, that’s a massive amount of time to be doing nothing except taking up space, especially when someone else could be benefiting. But who wants to use a car that someone else owns, and more to the point, who wants strangers to be in their car unsupervised? It is clear that the likely trend is a reduction in car ownership. Rather than owning a car you will subscribe to a car service. The service you subscribe to will be like choosing from a menu – what age of car are you willing to ride in, is it luxury, executive or standard, how many multi-passenger rides do you want included per month, what is the maximum time you are willing to wait for a car, what portion of your trips are likely to be pre-scheduled, how many non-passenger (i.e. delivery only) trips would you like, etc.

All of these parameters will allow the consumer to pay for an experience they would expect in a car they would choose and own for themselves. Furthermore, since self-driving cars are allocated on a more time-efficient model, they will become relatively much cheaper. You will now have multiple people paying for the same car.

The reduction in cars is not as simple as referring to the time in a car’s life cycle which is spent parked. We certainly couldn’t reduce the volume of vehicles by 95% because you need to allow for peak traffic periods. The question becomes, for the current volume of registered vehicles, what is the most at any point in time that are actively transporting drivers/passengers to a destination?

For example, if there are 2 million cars in a city and at any point in time the most on the roads never exceeds 800,000, a more efficient fleet of self-driving cars could sustain the transport needs of the community with only 1 million cars. They would be cheaper for consumers and the production of cars would require fewer resources, not per car, but in total. This is a far more efficient outcome for the economy.

Cars could be pre-booked to avoid waiting times or called as required, like the car-share/taxi service Uber. The majority of cars not in use at a given time could be parked out of the way to provide consolidated areas for servicing, repairs and refuelling, whilst vacating precious land currently used for car parks, driveways, petrol stations and on-street parking. The latter would immediately create extra laneways in some of the busiest city streets. Also, this would eradicate the need to make a mid-journey pit stop to refuel. Not only would this rid the commuting population of an annoying necessity, but it would also remove the frequency of petrol stations, This would free up more space, and, precious time for you and me.

Furthermore, since car ownership is a thing of the past, more vehicles will be built for single passenger use. If your trip only requires a single passenger, then the car will match that need. Smaller vehicles provide for traffic to flow safely via smaller lanes. A three-lane road or freeway could easily add an extra lane with this benefit. This would be in addition to the extra lanes created by the removal of on-street parking.

Add these physical benefits to the enhanced traffic flow achieved through smart vehicles that can map the most efficient journey based on current traffic volumes and an awareness of other planned trips. That’s right, not only will a car know how many other cars are on the road and where they are, but it will know where they are going to be based on their planned journey. Oh, and you need to drop something off with a friend, or transport some goods to a customer, well you won’t need to waste your own time or the time/cost of a courier. You can spend more time doing what you need to do rather than being stuck on the roads.

But if you are stuck on the roads, you won’t be driving. So sit back, relax, read the paper… maybe even make yourself your morning coffee with the built in coffee machine… because in a self-driving car, every morning is Sunday morning.

i. http://www.reinventingparking.org/2013/02/cars-are-parked-95-of-time-lets-check.html

Nearly half of the world's population - more than 3 billion people - live on less than $2.50 a day. More than 1.3 billion liv in extreme poverty - less than $1.25 a day.805 million people worldwide do not have enough food to eat.One quarter of all humans live without electricity — approximately 1.6 billion people.80% of the world population lives on less than $10 a day.In 1998, the UN estimated that it would take $40 billion annually to offer basic education, clean water and sanitation, reproductive health, and basic health and nutrition to every person in every developing country. That would be about $58 billion today.The World Food Programme says, “The poor are hungry and their hunger traps them in poverty.” Hunger is the number 1 cause of death in the world, killing more than HIV/AIDS, malaria, and tuberculosis combined.

Drastic times call for drastic measures. And if you're the type to say these are not historically drastic figures, fine, historically they're aren't absurd, but from the perspective of humanity... this is completely unacceptable. An unwillingness to accept something as reality for the future merely because of a status quo is just ignorant and closed minded.

But can anything actually be done?!?

In the Australian Financial Review published Monday, 9 March 2015 Australian Treasurer Joe Hockey questions whether or not corporate tax (as well as GST) will even exist in 40 years time.

His main argument is that companies and the goods/services they provide are so global and their revenues so opaque that their efforts to seek tax heavens are infinitely more effective than a federal governments efforts to tax them. The G20 summit held in Brisbane late in 2014 had focused on corporate income tax reform and addressing these loopholes.

And here is where we get to the 'drastic measures' part of my plan. Instead of throwing in the towel, the best way to overcome corporate tax avoidance is a globally flat and equal corporate tax rate. This makes calculating the tax liability far more straight forward. But that's not the end of the problem. Who should the tax get paid to? Where are the revenues generated from and is that significant?

Well if the companies are going to trade globally and we can establish an equal tax policy for them in a global environment, why shouldn't we have a global representative body that collects taxes from companies and is also responsible for their distribution to various countries, using productivity, poverty and population size as factors for consideration? A global tax agency.

I'm sure this sounds crazy to some because it's so unorthodox, but only when compared to what has been done in the past. Why shouldn't tax policies and tax agencies start to think like companies, think globally. If revenues and corporations act in a global environment, and you had to design a tax system from scratch, surely it would make sense to apply a proportionate tax agency that abides the same geographical borders as the corporations from which they claim tax revenues - i.e. virtually none.

If policy makers continue to pursue short sighted measures, massaging the existing structures, while companies maverick their ways through the global economic landscape, equitable distribution will never even come close to being achieved and layers upon layers of policies built on increasingly shaky grounds will cripple the system in further bureaucracy without coming closer to reaching a sustainable future.

Will there be significant hurdles? Are there political pressures? Will a consensus be extremely difficult? Absolutely! But these are the challenges we urge our governments to tackle in the best interests of citizens, not corporations.

If something can be brought to a G10, the current G8 adding in China and Brazil, it would become a significant milestone and achievement along the path to erasing loopholes and simplifying the taxation of corporate income. Thomas Piketty mentions in his 2014 best seller and economic hot-topic, Capital in the Twenty First Century, how sanctions can be imposed against countries that insist on acting as tax havens. A similar strategy would not be out of place here either.

And once a G10 accord can be achieved, imagine the benefits that can be engineered from a globally minded, long-term, strategic deployment of funds to countries and international initiatives. It's not as if these taxes are currently being paid to any one country at the moment anyway, rather they are sitting in the coffers of the behmoth company bank accounts and distributed to the uber asset-rich individuals.

Some will say this is anti-competition because it doesn't let countries attract investment through their own tax regime. Price competition is only relevant in terms of value, am I happy to pay more for a BMW or would I rather pay less for a Kia? But when the company decides to pay less in taxes, value is nowhere in the equation. Countries with smaller populations can easily afford to charge large corporations a lower tax rate, since some of them could foreseeably have a greater net worth than the countries themselves. If a company wants to transact globally it should be subject to a global tax provision and agency.

Other opposition will say taxes stifle innovation and business growth, and that I would largely agree with. I am not suggesting high tax rates for corporate income, as low as possible is an admirable ambition. I suggest merely that it should be globally consistent to make administration simpler, remove tax avoidance loopholes and allow the taxes be collected commensurate with the global presence of modern companies.

Social impact investing is about allocating money to programs that work on delivering a broad economic and social benefit. Sounds pretty great, right?

One problem... where does this money come from?

With a traditional investment, it's simple - prove that your investment will receive a healthy return relative to the risks of the investment, and the money will come. When a significant benefit of the investment is not measured in immediate financial returns, but rather a broader social benefit, who will provide the money to invest? Especially when investors can choose between providing a broad social benefit versus achieiving a traditional financial return.

There are already a number of participants in this space. You have the not-for-profit sector, philanthropic investing, community organisations, investors/banks and government.

As far as I'm concerned a free and competitive market is the ideal mechanism to develop effective and sustainable innovation. Yes, that's right, I think we should leave the delivery of socially benevolent programs in the hands of the money hungry investors and entrepreneurs. You may have pre-empted the probelm I'm about to discuss. The common perception being that the only thing those people care about is money. And to whatever degree this may be true for each individual involved, it is completely with merit and needs to be addressed. After all, it's the founding principal of a free and competitive market.

While I believe the free market is the right mechanism to get the job done, it is equally the role of the government to provide the right incentives so that activities with a social benefit are financially attractive to the free market participants. A tax on cigarettes is a perfect example of social policy impacting a free market.

Government incentives for social investing, as far as the context of my discussion goes, does not include charities that provide welfare services or other similar offerings. I'm talking about the long term strategic goals of an economy that will underpin the financial and social landscape of a country. As important as it is to provide shelter, food and clothing for the homeless, this is a treatment of the symptoms, I'm referring to those strategies that will make essential goods and services more affordable, reduce unemployment, address the increasing burden of social benefits on an already over-extended federal budget... structural change for social improvement.

So, what is on offer in this space at the moment? Well, the government does already provide assistance in the form of government grants and tax incentives. I believe both fall quite short of ideal incentive programs.

The problem with grants is that you need an assessment panel to look at a proposal and hand money out. You don't know if their plan will actually deliver what it promised. Plus, what's to say that of the numerous grant applicants those that would achieve the best results will actually be granted the money? Also, tax incentives work best when you've got something to tax. Startups often won't have too much taxable income as it is, so the efficacy of such a policy can vary, as too does the timing of the benefit relative to the life-stage of the business development.

What you want is a a government policy that does not select the market participants, as in the case of grants, and it must also offer benefits in the early stages of a startup rather than tax benefits received in later years.

If investors and entrepreneurs are looking for return on their investment, that's exactly what the policy should offer. What this means is a 'matching' policy where the government will pay money to companies that meet a criteria set by the government that defines a strategically selected area of impact investment. Of the key selected areas each criteria is different and each 'matching' proposal can vary based on the size of the social benefit as well as the organic financial benefits (without government intervention) within the industry.

How does 'matching' work? The great part about this policy is that the more successful a company is in the free market, the more financial benefit it will receive from the government, so it rewards good private enterprise without directly determining the solution themselves or choosing the provider. It's all done by the market.

One careful point of consideration is the measurement to which the 'matching' will be aligned. At first, revenue might be the obvious choice, but good economic policy is often as much about the unintended consequences as the intended consequences. And a 'matching' policy measured against revenue actually offers an incentive for high prices. My preference would be to match against number of sales, that way, in a free market, each competing enterprise will benefit more if they can reduce the price of their offering. In some cases, a hybrid model of revenue and sale volume would be best.

Another consideration is the rate of 'matching'. The two likely and common candidates are flat and increasing provisions. Increasing provisions may just be flat 'matching' plus bonuses of a sort. It's like setting a bonus for an employee in a private company. Some may be asking why you would offer bonuses. Simply, there are some industries where a consolidated service provider can actually deliver greater efficiencies and social benefits, and in this case it is worth rewarding a provider that can achieve deeper market penetration. This may lead to a market oligopoly or even monopoly, but at least it was chosen by the market rather than backed by a governing body.

This is exactly the sort of policy I would like to see in the industries of health and education. Not to reward the provision of health services and education, but rather reward the development of a new way to provide these services to the community with greater social benefit and a dramatically reduced strain on the system.

These are the changes we need to provide a sustainable economic environment and ensure the social wellbeing of citizens.

Our health, and the technology that can improve our health services, are the keys to a better life and our economic survival. Yes. Economic survival. Preventative care and the potential economic savings from preventative care are 'game-changing'.

Sound a bit outlandish? Well, hear me out and maybe it won't sound so crazy. Or, maybe it will.

Perhaps the most exciting area where investment in technology can deliver a significant multiplier effect on economic benefits is that of health services.

"Why?"

Well, I'll give you my three favourite reasons, in no particular order.

Better health - imagine a world where your biometric data is collected in real time and is controlled by you - your heart-rate, blood pressure, respiratory rate, core body temperature, hydration levels, chemical imbalances, nutritional deficiencies and your location via GPS. All of this, automatically recorded by a biosensor implanted via injection. It's not that hard to imagine.

Of course, I'm not suggesting a government run surveillance program, but rather a privately sourced, optional method of managing your own health information like never before.

You can access your own data through an online portal and have the added option to choose what information you would like to share with your personal medical professional or professionals. Now imagine, thanks to the provision of this information to your medical professional, that your doctor can treat you well in advance of experiencing physical symptoms. This provides quick and cheap treatment, and prevents long, expensive treatments.

Less strain on the system - extrapolate the benefits of better health (above) across a whole population, the benefits achieved through preventative care become obvious in our futuristic world. With enhanced preventative capabilities the demand for resource-intense health services will be reduced relative to population growth, subsequently reducing the strain on the federal health budget.

It's far more efficient to prevent illness than provide hospital beds, operating facilities and expensive scanning equipment.

Now, imagine this biometric data collected across a significant number of the population, gathered over time. From this we can identify correlations between biometric measures and subsequent diagnoses. This can lead to further enhancements in proactive and preventative treatment. This facilitates a beautiful cycle of better individual health and reduced economic strain.

Admin and operational efficiency - certainly not as sexy as the first two points, but as a patient and witness to waiting room timeframes, I can't help but imagine the management of patient information and co-ordination between various health service providers could be drastically improved such as to deliver significant administration efficiencies.

These three points contribute to a higher standard of living for all, and particularly, advantages lower income households by providing affordable, effective health care for everyone.

A lower cost of provision combined with a reduced demand for expensive health services means a significantly reduced drag on the federal and state budgets.

So, how much does health really cost the government? If we look at just the federal budget the answer is, quite simpy... A LOT!

Outside of purely financial transactions, it is the most expensive programme, accounting for approximately 5.5% of the budget, with an additional 3.2% paid to the states and 2.2% going to pharmaceutical schemes, totalling 11%, or $42.4 billion. This figure is only just shy of the leading outflow of 12% through GST paid to the states.

If you wanted to add income support for carers (1.6%) and private health insurance (1.4%), both conceivably falling under downward pressure as a consequence of the three points above... well, you can see how far the financial benefits can reach.

Freeing a government from such a heavy drag provides so many options to invest in and provide better services for their citizens, such as education or social welfare payments. How can we encourage investment in this area? Well, it just so happens I have a written one of my blogs on how to encourage social impact investing.

Health services is a prime example of how a strategic investment in technology can help manage and prepare for the medium-term negative side-effects of disruptive innovation at a macro level.

So if technology is going to make some of our more manual work redundant in the eyes of human capital, rather than halt the winds of progress and innovation, I say let's be smart, let's be strategic and let's welcome the opportunity to achieve a higher standard of living and a more sustainable one.

Like me, you may have come across one or two articles, or even academic papers, that warn of the coming train wreck we are about to witness as technology puts thousands, possibly millions, of people out of work.

Without being glib about it, I say, "good!"

Many are not so optimistic about the knife's edge on which our future labour market currently balances. Fewer jobs means lower national income and lower income means lower consumer spending (consumption is generally the largest contributing factor to Gross Domestic Production - GDP). This has implications on growth and unemployment, not to mention significantly reduce the tax revenue collected by Government.

This is a very real and even likely outcome, and it's completely reasonable to be wary of the damage it could cause to the economy. In fact, The Economist published this graphic representing the likelihood of certain jobs being replaced by technology within the next 20 years.

"Ok, Anthony" I hear you say, "where's the silver lining?"

Well, I'm glad you asked. First, and most obviously displayed in the above graphic... telemarketers gone! Are you kidding me? Best. News. EVER!

Jokes aside, my optimism comes from the potential to not only re-frame the economic debate and the role of government within the economy, but the standard of living that can be attained through this technology revolution.

I realise this is a fairly general statement and provides almost no useful information, so let me be more specific. In particular, I want to discuss how we can harness the benefits of a technology revolution and minimise the negative consequences.

Let's begin by analysing the specifics of a growth in jobless numbers. Where will the pain be felt at a personal level?

It is commonly accepted that the jobs most likely to be replaced by technology involve manual and administrative tasks, largley low income types of roles. Take someones job away, someone who may not have stock piles of cash at their disposal, and they may struggle to meet mortgage repayments, pay utilities, school fees, experience difficulty accessing transportation and even food insecurity... just to name a few possible results. All of which sounds like the precise circumstances we should be trying to prevent. We especially do not want to plunder lower income earners just so that companies can produce goods more efficiently, allowing their shareholders, high income earners and asset rich individuals to reach new lofty heights of financial supremacy.

Three things can assist this situation:

The jobless find new jobs. It goes without saying, easier said than done.The prices for consumer goods and services are dramatically reduced or subsidised so that they are affordable to single income or zero income families.Bolster the capacity to provide social welfare to support the increased number of jobless.

Item 1 is not a quick fix. People need to be trained and reskilled in areas where they can find employment. This could be in an area where they have little or no experience and training could take years. But, ultimately, it's the most sustainable and only course of action for long term change.

One answer to this is a pre-emptive change to the education system.

A system that has not really changed much for over 100 years - teacher in front, students at their desks listening, working and learning. One way in which this might be evolved is through the curriculum. After the fall of the Soviet Union, Estonia put a plan in place to focus on technological innovation. The idea was to magnify the potential of it's 1.4 million work force to compete against much larger markets. They taught software programming as part of standard curriculum at an early age. This is just one example of how we might update the curriculum. It lead to the Estonia-invented Skype, online voting, use of electronic identification cards, e-residency, and generally the rebirth of Estonia as an internet giant.

An alternative access to change is modality, the method by which lessons are taught. Apps like Duolingo, a popular interactive tool that helps users learn a foreign language, allow participants to progress through quizes at their own pace. The next stage, adaptive e-learning platforms like Smart Sparrow, provides education specific to each individual. If you learn best through graphical representation, numbers, by listening or experiencing, the system identifies this, and presents the lessons to suit your learning style. It adapts to how well you respond to certain lessons and provides feedback based on the results.

More on this in a later post.

I now want to talk about items 2 and 3. It is within these points my optimism is founded.

Item 2 is quite simple. If people have less money, it would be great if their basic needs - food, housing, energy, transportation, education and health services - became more affordable.

The focused investment in the technology, infrastructure and innovation of these industries will not only create jobs immediately, but it will help these areas operate with greater efficiency. Greater efficiency will subsequently lead to downward pressure on prices.

Any supply deflationary pressure on the cost in accessing these fundamental goods and services clearly helps those suffering job insecurity as a result of technology and innovation. However, taking this a step further we can see broader impacts on the federal budget. More than 25% of the budget is allocated to the Department of Social Services (http://theopenbudget.org/). The most significant factor in this figure is accounted for by Income Support for Seniors, almost 40% of the Social Services spending, or 10% of the total budget. This is the second largest expense programme after the amount paid to the State governments for GST, and it's approximately twice as much as that attributed to the third largest item - Family Tax Benefit.

By a combination of an increased reliance on self-funded retirement and a reduction in the cost basic goods and service, the payments per person can grow at a slower rate relative to the rest of the budget while still maintaining, or even increasing, the purchasing power of the nominal benefits received by the individual.

A reduction in the nominal rate of benefits paid per individual means that an increase in the individuals receiving benefits can be, to a certain degree, absorbed without dramatic consequences to the budget.

Item 3 is somewhat of a temporary measure. You don't want to develop a welfare state. By addressing item number 2 we have already taken steps to cater for a greater number of jobless on welfare support by reducing the cost of living and basic needs. The next step is to deliver efficiency to other areas of the government budget so that there is capacity to allocate even more to other areas, including technology innovatioin, infrastucture and social benefits.

The number one example of how this can be achieved, as far as I can tell, is in the provision of health services. This will be the topic of my next post, The Health of a Nation.

'Bill Gates: People Don't Realise How Many Jobs Will Soon Be Replaced By Software Bots',14 March 2014 Business Insider Australia

11 Novermber 2014 The Australian Financial Review

Economic reform is often like surgically removing a tumor.

I have often used this analogy when explaining various reform proposals. It is understandable that if a person is sick, the best road to recovery is often a painful operation followed by a longer and more painful period of rehabilitation. But, in the end, it's the right course of action and the only means by which a sustainable result is achieved. The same is true for the economy.

When attempting to solve any problem it is always prudent to check your premises. On what basis are certain facts stated as such? What borders are we controlled by and why? The premise of certain rules or 'facts' may have been true and appropriate at one time, but not so now. It may even be the case the premise was based on misguided or misinformed decisions in the first place.

The advent of cloud computing and big data will fundamentally alter the way businesses and governments operate. So significant is the shift from our incumbent premises that new questions need to be asked.

As was the case following the industrial revolution, so too will the insipient technology revolution guide us directly to an extended period of labour displacement and subsequently higher unemployment in the developed economies of the world. But what does this unemployment look like and what can be done about it?

The answers are not found in a system of pulleys and levers currently used to massage us towards economic stability. The answers are found by looking beyond the 'now' and considering what the world will look like in 10 years and beyond.

I will be discussing how technology is and will be impacting our day-to-day lives, as well as at a broader economic level.

PLEASE ENJOY AND JOIN IN THE DISCUSSION

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