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2010-05-31

Two economists - Smith and Fane on the RSPT

Comments on George Fane “Reputation of the nation on the line”, 31/05/2010, http://www.theaustralian.com.au/news/opinion/reputation-of-the-nation-on-the-line/story-e6frg6zo-1225873225249

Swan should realise that economists have many different views. Some economists have supported the idea of a profit based royalty regime in preference of price based royalty regime as shown by the so called 20 leading economists' statement, although unhelpful to the current debate of the RSPT, does not mean his chosen RSPT is good.

It seems that some economists are political rather than non-political, and normative as opposed to positive in their advocate.

Please not that both George Fane mentioned that he (the current author) and Ben Smith (one of the 20 leading economists) made the point about point in 1986 on the issue of the credit that the Swan and the government are claiming.

Fane's article is excellent and in my view much better than the statement by the 20 so called leading economists last week or before last. Fane is more objective and the particular RSPT specific, as opposed to the 20 economists' ignorance of the particulars of the specific RSPT and argue about differences between royalty regimes between profit based and price based.

Further, the 20 economists are pro-government and highly political, while Fane is largely acdemic, in my view. The latter requires much more courage than the former, even in Australian context.

What a difference between economists that makes!

PS: by the way, I know both Smith and Fane and have attended their lectures at the ANU in the 1990s. Smith should also remember me if he is not very forgetful.

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