Well Mr Swan has told us that under his modelling with a carbon tax, employment will grow, gross national income will grow and if he had been pressed, no doubt he would have told us the dahlias would grow and Pinocchio would have been truly excited.
In his ivory tower, assumptionless modelling is self serving wonder and light.
The other day I was reading modelling by government economists lauding the fact that a Doha trade agreement would lead to a “substantial” rise in world output of 0.1 per cent.1 Now we learn from the Treasurer that actually a change in output of 0.1 per cent due to a carbon tax is only modest. It would seem that economists choose the wrapping depending on what they think of the package inside.
In amongst Mr Swan’s lunch time thrashing around, we are told that China is driven by a moral imperative to reduce emissions and we should catch up and be like China. So what is all that black stuff that we sell them that is propping up Mr Swan’s budget figures?
Effusive would be a very kind word to describe Mr Swan’s speech. It was trust me this will not hurt a bit, taxes are good for you especially ones that can cool the planet, oh do not look at me like that I have a model that can prove it.
1 ABARE found in a paper titled "Increasing benefits to Australia from WTO agricultural trade liberalization":
"The global gains in GNP amount to US$47 billion, about 0.1 per cent of base levels in 2010."
The abstract of the paper reports these findings as:
"In this paper it is shown that global benefits from agricultural trade liberalisation are substantial."