Posted by Henry Ergas picks up Annabel Crabb for reporting as a fact this claim when she has not checked the assumptions of the Treasury modelling:
Treasury can predict until it’s blue in the face that the cost of living will rise by a modest 0.7 per cent; Mr Abbott doesn’t believe it, and campaigns accordingly.
Here’s some other facts:
The increase in the cost of living associated with the introduction of the tax reform package is calculated using the estimated population-wide CPI increase of 1.9 per cent in 2001-02.
Treasury estimate of the impact of the GST tax reforms prior to their implementation.
These effects are small compared with the effect of the new tax system introduced in July 2000, which raised consumer prices by 2½ per cent.
Treasury carbon tax modelling on the actual impact of the GST tax reforms, p. 124.
Ms Gillard said the Treasury modellers were the same people who did the modelling when the GST was introduced “and they got the effects of it right“.
“That’s why I’m very confident when I say that our Treasury modelling … has concluded the flow-through from putting a price on carbon … is less than 1 per cent of the consumer price index.”
Let’s see if they do better this time. With the average household 20 cents a week better off, unlike the GST, there is not much room for error.
ricardian ambivalence 