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2010-05-26

Leading economists but with poor thinking

Comments on AAP report “20 leading economists, academics back Rudd's resources super-profits tax”, 26/05/2010, http://www.theaustralian.com.au/business/in-depth/leading-economists-academics-back-rudds-resources-super-profits-tax/story-fn5eo6td-1225871433101

These leading Australian economists are trying to clear the air, but they actually mudded the water even more.

They claim that the current debate is dominated by misinformation, but their biased statement without a full picture of the RSPT including its proposed application is highly and even more misleading.

They only talk about the principle of a resource rent tax in its best shape and form, but ignore completely the main shortcomings already embedded in the current RSPT.

This debate is not the general principle of a good resource rent tax, it is about the particular design and features of the RSPT. The mineral council has openly acknowledged a profit based resource rent tax is superior and made submissions for it in the Henry tax review process.

Those leading economists confused these two points, and are doing their partial analysis in vacuum.


And that is the most unfortunate part of the leading economists’ contribution.

One has to wonder how those leading Australian economists could do such a lousy job.

I am afraid to say that they are clearly and unfortunately abusing their reputation and do disservice to the nation.

Maybe that is the nature of the beast: partial analysis – that is their strength.

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