Why going to a park is better than going to the beach

My father was always disapproving of people who excused their failure to turn up to his Sunday meeting by saying they'd been "worshipping God in the great outdoors". But the older I get, and the more I read, the more I think it's not such a bad idea.

I'm much attracted by the American biologist Edward O. Wilson's hypothesis of biophilia, that humans have an innate tendency to seek connection to nature, for its calming effects.

While most people will be heading for the beach in the next few weeks, I usually head for a national park, to lift my quota of trees, bush, grass and anything else that's green.

This time, however, we're heading for a jungle – otherwise known as Manhattan – to do babysitting duty. Ideally, this means I'd be virtually living in Central Park, but that may be a bit too snowy.

My regular reading of the universities' blogsite, The Conversation, has garnered a fair bit of evidence for biophilia.

According to a survey conducted by the Australian Bureau of Statistics in 2007, each year one in five Australians experiences a mental disorder. Most common are anxiety disorders, such as panic attacks or obsessive-compulsive disorder.

Zoe Myers, an urban design specialist at the University of Western Australia, says research shows that city dwellers have a 20 per cent higher chance of suffering anxiety and an almost 40 per cent greater likelihood of developing depression.

Fortunately, research also shows that people in urban areas who live closest to the greatest green space are significantly less likely to suffer poor mental health.

Myers says more than 40 years of research shows that exposure to nature increases calm and rumination, decreases agitation and aggression, and improves concentration, memory and creative thought.

But it's not emptiness or quiet that has these good effects, she says. "Nature in its messy, wild, loud, diverse, animal-inhabited glory has most impact on restoring a stressed mind to a calm and alert state.

"This provides a more complete sense of 'escape' from the urban world, however brief."

Many studies have attested to the restorative effects of forests but, though holidays in national parks are nice, we need something closer to home.

Melanie Davern, of RMIT University, with colleagues from Melbourne University, say recent research on the benefits of urban greening has found, for instance, lower rates of anti-depressant prescriptions in neighbourhoods close to woodlands in Britain, happier people living in areas with more birdlife, and better health in areas with increased neighbourhood tree coverage in the United States.

Planting trees in parks, gardens or streets has many benefits: cooler cities, slower stormwater run-off, filtering of air pollution, habitat for some animals (such as birds, bats and bees), making people happier and providing shade that encourages more walking.

Professor Pierre Horwitz, of Edith Cowan University, is a great advocate for urban bushland – a bush park of native trees, a wetland, or any native vegetation characteristic of the local region.

"With its undisturbed soils and associated wildlife, urban bushland is more diverse than other types of green spaces in our cities, like parks. The more unfragmented the landscape, or unaltered the bushland, the more likely it will be to retain its biodiversity," Horwitz says.

"Exposure to biodiversity from the air, water, soils, vegetation, wildlife and landscape, and all the microbes associated with them ... enhances our immunity. This is thought to be key to the health benefits of nature."

Horwitz says we know that wealthier people tend to live in greener suburbs, and that wealthier people tend to be healthier. So is it wealth rather than nature that's doing the good work?

Fortunately, no. Many studies have controlled for wealth but still found direct health benefits from exposure to biodiversity.

The benefits go not just to individuals, but to the wider city. Forests and woodlands clean our urban air by removing particles and absorbing carbon dioxide. This reduces premature death, acute respiratory symptoms and asthma across the city.

As well, urban bushland improves city water. Wetlands and the vegetation around them clean water by filtering, reducing exposure to pollutants carried in groundwater or surface run-off.

And not forgetting that vegetation moderates extremes of temperature, providing shade when it's hot and less exposure when it's cold, thus reducing heat- or cold-related illnesses.

Trouble is, urban bushland shrinks as new suburbs are developed on the outskirts of our cities. Worse, bigger houses and more high-rise living is causing backyards to be shrinking, too, even though they contribute to our health and our kids' development.

Not to worry. There's a lot of urban roof space, and we're getting more rooftop gardens. Sara Wilkinson and Fiona Orr, of the University of Technology Sydney, studied the use of a rooftop garden at St Vincent's Hospital in Sydney as part of two "horticultural therapy" programs for people recovering from mental illness.

Among the many benefits participants identified were regular connection with others, developing friendships, experiencing enjoyment and restoration of health.

And if you don't have a spare rooftop, you can join the latest trend and install a vertical garden.

Sorry, I'm getting a bit over-excited here. I wonder if "green space" still counts as green when its covered in snow? Hope the apartment we're renting at least has some indoor plants.

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How Trump's tax cuts will affect Australia

The Americans' decision to drop their company tax rate to 21 per cent from the start of next year is unlikely to overcome our Senate's resistance to cutting our company tax rate to 25 per cent for big business. Which is no bad thing.

It seems the forces behind the US end of neoliberalism – the distortion of mainstream economics I prefer to call bizonomics (giving big business whatever it wants will be best for all of us) – aren't giving up without a fight.

This US tax bill is a huge win for them, with the company tax rate greatly reduced, plus cuts in personal income tax biased heavily in favour of high-income earners.

To the extent the unthinking populism that helped elect a way-out character like Donald Trump has been provoked by economic factors, the obvious suspect is America's growing inequality.

But Trump's only great legislative achievement in his first year is an act that will worsen inequality.

That the populists have just shot themselves in the foot is no surprise, since the hallmark of populism is wanting to have your cake and eat it - failing to think things through.

Those American business people who aren't populists, but like the sound of Trump's tax cuts, also need to do some thinking through.

Their big problem is that the tax package will cost the US budget almost $2 trillion over 10 years.

Any consequent boost to US economic activity is likely to be short-lived, and any boost to tax collections far too small to much reduce the net cost to the budget, meaning a lot bigger deficits and debt.

The extra government borrowing needed to finance those bigger budget deficits – and to attract funds from foreign bondholders – will force up US interest rates and the US exchange rate. And, because the US is such a big part of the global economy (unlike us), also force up world interest rates.

Eventually, these higher rates will do what higher interest rates always do: discourage borrowing and spending, causing the US economy to slow.

The more so because it's already been growing fairly strongly for some years, with unemployment already down near the rate thought to represent full employment. It hardly needs more fiscal (budget) stimulus.

The US Federal Reserve will worry more about rising inflation pressure, so will start raising its short-term, policy interest rate faster than it has been.

Neoliberals treat it as a self-evident truth that cutting tax rates leads to increased business investment, consumer spending and employment. But only the most oversimplified economic analysis tells you that's guaranteed. In practice there are many other variables.

For instance, if they don't see many profitable opportunities, US companies could keep doing what many have been: returning their (higher) after-tax profits to their shareholders as share buybacks, rather than investing them in business expansion.

However, Trump seems to have guarded against this possibility by including in his package a temporary business investment incentive.

So my guess is that, as well as giving share prices a boost, his tax cuts will lead to some increase in "jobs and growth" – at least for a while.

Now turn back to Oz and whether cutting the US company tax rate to 21 per cent leaves us with no choice but to cut ours to 25 per cent so as to be "competitive", as the government and the Business Council claim.

The big complication in applying analysis from other countries to us is our full dividend imputation system, which means Australian shareholders pay no company tax on their dividends. They thus have little to gain from a cut in the company rate.

This means the cuts we have passed, for companies with annual turnover of less than $50 million a year, probably won't do much to change the behaviour of those companies, since most of their owner shareholders would be locals.

It also means cutting our company tax rate yields benefits only to the foreign shareholders in our companies.

Why would we do such a thing? Especially when our 80 per cent foreign-owned mining industry employs few people, and the company tax it pays (or avoids paying) constitutes a key part of our reward for letting foreigners exploit our natural resources.

The standard answer is that cutting our tax rate would attract more foreign capital, which would generate more Jobs and Growth. The government's own modelling, however, found that the extra jobs would be negligible, while the extra growth would be quite small, and spread over 10 or 20 years.

Now, however, the argument changes: with the Yanks cutting their rate so low, we're in danger of losing our inflow of foreign investment funds. So cutting now wouldn't make us better off, but would avoid us becoming worse off.

Worried? I'm not. This argument assumes the size of the nominal rate of tax a country imposes on foreign investors is pretty much the only factor they consider when deciding where in the world to invest.

This is just silly. For a start, it ignores all the special tax breaks countries offer. A US study has found that our effective rate of tax is much lower than our nominal rate of 30 per cent, and compares well with other countries.

In any case, investing in Oz has a lot of non-tax attractions: our huge endowment of natural resources, our lawfulness and respect for property rights, our rich and well-educated workforce, our English language, our good education system, our good weather and even our good beaches.

So far, we've had no trouble attracting lots of foreign investment, despite our seemingly high company tax rate.

We'd be mugs to start panicking and giving up a lot of tax revenue – and adding to the debt and deficits we used to say was so terrible – before there was any evidence we had a problem.

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We should change the culture of Christmas

Christmas, we're assured, brings out our best selves. We're full of goodwill to all men (and women). We get together with family and friends – even those we don't get on with – eat and drink and give each other presents.

We make an effort for the kiddies. Some of us even get a good feeling out of helping ensure the homeless get a decent feed on the day.

And this magnanimous spirit is owed to The Man Who Invented Christmas, Charles Dickens. (You weren't thinking of someone else, surely?)

According to a new survey of 1421 people, conducted by the Australia Institute, three-quarters of respondents like buying Christmas gifts.

Almost half – 47 per cent – like having people buy them gifts. And 41 per cent don't expect to get presents they'll never use.

Well, isn't that lovely. Merry Christmas, one and all!

Of course, there's a darker, less charitable, more Scrooge-like interpretation of what Christmas has become since A Christmas Carol.

Under the influence of more than a century of relentless advertising and commercialisation – including the soft-drink-company-created Santa – its original significance as a religious holy-day has been submerged beneath an orgy of consumerism, materialism and over-indulgence.

We rush from shop to shop, silently cursing those of our rellos who are hard to buy for. We attend party after party, stuffing ourselves with food and drinking more than we should.

All those children who can't wait to get up early on Christmas morning and tear open their small mountain of presents are being groomed as the next generation of consumerists. Next, try the joys of retail therapy, sonny.

But the survey also reveals a (growing?) minority of respondents who don't enjoy the indulgence and wastefulness of Christmas.

A fifth of respondents – more males than females – don't like buying gifts for people at Christmas. Almost a third expect to get gifts they won't use and 42 per cent – far more males and females – would prefer others not to buy them gifts.

The plain fact is that a hugely disproportionate share of economic activity – particularly consumer spending – occurs in one month of the year, December.

And just think of all the waste – not just the over-catering, but all the clothes and gadgets that sit around in cupboards until they're thrown out. All the stuff that could be returned to the store, but isn't.

At least the new practice of regifting helps. Unwanted gifts are passed from hand to hand, rather like an adult game of pass-the-parcel, until someone summons the moral courage to throw them out.

Still, buying things that don't get used is a good way to create jobs and improve the lives of Australians, no?

Not really. The survey finds only 23 per cent of respondents agree with this sentiment, while 62 per cent disagree.

One change since Scrooge's day is that those who worry most about waste – at Christmas or any other time – do so not for reasons of miserliness, but because of the avoidable cost to the natural environment.

Rich people like us need to reduce our demands on the environment to make room for the poorer people of the world to lift their material standard of living without our joint efforts wrecking the planet.

This doesn't require us to accept a significantly lower standard of living, just move to an economy where our energy comes from renewable sources and our use of natural resources – renewable and non-renewable – is much less profligate.

This is the thinking behind the book Curing Affluenza, by the Australia Institute's chief economist – and instigator of the survey – Dr Richard Denniss.

He says we can stay as materialists (lovers of things) so long as we give up being consumerists (lovers of buying new things). We can love our homes and cars and clothes and household equipment – so long as that love means we look after them, maintain and repair them, and delay replacing them for as long as we reasonably can.

The survey shows we're most likely to repair cars, bikes and tools and gardening equipment, but least likely to repair clothing, shoes and kitchen appliances, such as blenders, toasters and microwaves.

What would encourage us to get more things repaired? Almost two-thirds of respondents would do more if repairs were covered by a warranty. More than 60 per cent would do more if repairs were cheaper. And 46 per cent if repairs were more convenient – which I take to mean if it was easier to find a repairer.

How about making repair work cheaper by removing the 10 per cent goods and services tax on it? Two-thirds support the idea; only 19 per cent oppose.

Point is, there are straight-forward things the government could do to encourage us to repair more and waste less. Were it to do so, this would help restore older attitudes in favour of repairing rather than replacing.

Trouble is, politicians tend to be followers rather than leaders on such matters. So the first thing we need is a shift in the culture that makes more of us more conscious of the damage our everyday consumption is doing to the environment. That putting out the recycling once a week ain't enough.

We could start by changing the culture of Christmas.

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Turnbull's economic luck: more forecast than actual

It's usually in the interests of us followers to have a leader who is lucky. Malcolm Turnbull has had his share of bad luck but, of late, his fortunes seem to have changed. Latest proof is the mid-year budget update.

According to Scott Morrison and Mathias Cormann, everything is much improved. Although previous mid-year updates have revealed less progress than expected at budget time, this time the budget deficit is expected to be $5.8 billion lower than forecast in May.

The overall budget balance is still expected to be back in (a slightly larger) surplus in 2020-21, and this financial year is expected to be the last one in which the government needs to borrow to cover the day-to-day activities of government (as opposed to its spending on infrastructure), a year earlier than expected.

This means the Commonwealth's gross public debt is now projected to be $23 billion lower than expected by June 2021.

As for the economy, the Turnbull government's unwavering pursuit of Jobs and Growth has turned this from slogan to reality, we are told.

The economy is steaming on, but growth in employment – particularly full-time jobs – has been remarkable.

Well, yes – up to a point. There's good luck in the hand, and there's forecast good luck. Federal governments have been forecasting good results since the days of Wayne Swan and Julia Gillard – so far without much luck.

I would say we can give a fair bit of credibility to what is expected to happen between now and June, but forecasts and projections out another three years to June 2021 remain just that – forecasts.

The fact is that the government has had to revise downward its forecasts for the economy this financial year, but has left its forecasts for the following three years largely unchanged. Well, maybe, maybe not.

The government's forecast in May of a return to budget surplus by 2020-21 rested heavily on its prediction that, despite the extraordinary weakness in wage growth over the past four years, over the coming four years it would steadily return to boom-time rates.

Now these highly optimistic expectations have been shaved back, but only a little. I hope they come to pass, but I wouldn't bet much on it.

But what of the government's attempt to claim credit for the remarkably strong growth in employment over the past year?

I hate to shock you, but governments have been known to claim the credit for improvements that came to pass on their watch, even though the seeds of that improvement were sown before their time.

The surge in full-time jobs is explained largely by the delayed rollout of the National Disability Insurance Scheme (initiated by Gillard) and by the NSW and Victorian governments' increased spending on road and rail infrastructure (for which Joe Hockey can share some credit).

But if some of Turnbull's newfound air of success and optimism rubs off on the rest of us that, at least, will be no bad thing.

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A bigger, better public sector will secure our future

There are important lessons to be learnt from the latest news about where our strong growth in employment is coming from. But if we listen to the nostrums of the Smaller Government brigade, we'll get them exactly wrong.

The (trend) figures we got from the Australian Bureau of Statistics last week showed employment growth of 370,000 – or 3.1 per cent – over the year to November. More than 80 per cent of the new jobs were full-time.

Great news.

But my esteemed colleague Peter Martin delved deeper and came upon a bigger story: the strong growth in employment has not been spread evenly across the economy, but is heavily concentrated in just two industries: "healthcare and social assistance" and construction.

It's also concentrated disproportionately in Victoria and NSW, and among women workers.

Why? Because, though employment in health and aged care has been growing strongly for years, the latest bout can be attributed mainly to the delayed rollout of the national disability insurance scheme initiated by Julia Gillard. Most of these extra workers would be female.

And because the strong growth in construction employment can be attributed mainly to a boom in infrastructure spending by the Victorian and NSW governments, much of it induced by Joe Hockey's incentive payment to state governments which engaged in "asset recycling" by using the proceeds from privatisation to build new infrastructure.

Oh no! You mean the growth in employment isn't the real deal? It's just some kind of temporary budget stimulus? It's not coming from the productive private sector, just from the unproductive, parasitical public sector, which wouldn't exist without the private sector's blood to suck upon?

Remember what I said last week about neoliberalism being ideology masquerading as economics? That last paragraph was a classic case.

It's true that, in some sense, the disability scheme and state infrastructure projects are instances of fiscal (budget) stimulus. But the notion that government deficit spending "crowds out" private sector spending is true only when the economy is booming and already at full employment – which we clearly aren't at present.

Just imagine how much weaker the economy would be now if government spending hadn't caused full-time employment to grow by up to 300,000 jobs over the past year.

The news that so much of the past year's employment growth has come from public deficit spending is actually vindication of the Reserve Bank's longstanding call for monetary policy (interest-rate) stimulus to be backed up by fiscal stimulus.

Note, too, that while even all full-time construction jobs are temporary in the sense that all projects end, employment associated with the disability scheme will continue indefinitely.

And, since governments tend to outsource both their construction projects and their disability care packages, most of the new jobs would actually be classed as in the private sector.

Of course, the notion that the private sector is productive but the public sector isn't is sheer economic illiteracy. We've long lived in a "mixed economy" in which most goods and services are produced by the private sector but, for good reason, some services are produced (or, at least, funded) by the public sector.

As I also wrote last week, economists are doing battle against the misapprehension scaring our youth that robots will reduce the amount of work needing to be done – the latest incarnation of what economists have long called the (fixed) "lump of labour fallacy".

While it's true new technology has been destroying jobs since the start of the Industrial Revolution, it's equally true that in those two centuries we've never yet run out of other jobs we'd like to pay someone to do for us.

Since the 1960s, a large share of these green-fields jobs has gone to women, facilitating their (continuing) mass movement back into the paid workforce after child-bearing.

But here's the most important lesson to learn from the news that most of the growth in good, full-time jobs in recent times has come from the government: much of the new demand for people to do new things for us will involve new jobs delivering services in, or funded by, the public sector.

That's because almost all the services best provided or funded by the public sector are "superior goods" – things we want more of as we get richer: education and training, healthcare, aged care, disability care and much else, even law and order.

So the greatest threat to continued growth in the "lump of labour" comes not from robots, but from those wanting to put some arbitrary cap on the size of government – and, of course, on the amount of tax we pay.

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