In my view the most insightful evaluation of Ross Garnaut’s latest report is Henry Ergas’ masterly, but brutal skewering of the imperious tone (more evident in the press transcripts than the text), the vanity and the unsupported assertions.
His criticism of Garnaut’s suggestions for a tax-structure change to “compensate” the household impact of the proposed tax—is devastating:
“…the inevitable consequence would be to raise effective marginal tax rates as the [proposed $25,000 tax-free] threshold tapers. Indeed, although this is nowhere noted in the report, Garnaut’s proposal would raise effective tax rates in the middle-income bracket by about 5 percentage points, that is by 17 per cent. Such an increase, affecting more than 60 per cent of taxpayers, would greatly reduce incentives to work and save.”
On that topic, I also like this suggestion from Sinclair Davidson that the cost of the tax-threshold reform to revenue would more appropriately be met from our already enormous ($121bn!) welfare budget.
Then, there is John Stone:
“In recent days another notable Australian, Ross Garnaut, has also shed all semblance of political impartiality in his intellectually laughable, but irremediably politically tainted, final report to the Prime Minister on “global warming” and the proposed tax on CO2 emissions. In the process, he has completed his own move from the role of respected professional economist to that of political hack.” Extract from John Stone in The Australian
Although I agree with the observation, the problem with this criticism is that John Stone has often in the past given the impression that for him—as for the warming alarmists, including Ross Garnaut—intellectual failure and “political taint” amount to the same thing. A case of pots and kettles.