Reviews of Garnaut’s review

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.

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