The policy economist par excellence hits back:
One of Australia's leading academic economists and a member of the Reserve Bank board has taken on Treasury boss Secretary Ken Henry accusing him of failing to consult experts while trying to silence them.
Warwick McKibbin, director the Australian National University's Research School of Economics said he was stunned by a call from Ken Henry on Monday for academics to "put down their weapons" rather than nitpick over government proposals such at the emissions trading scheme.
"I don't know whether Ken was fingering me, but there's weren't too many other people out there arguing against an ETS," he said from the ANU yesterday
"I have enormous respect for Ken Henry, but he can't believe that you should have consensus because it is better to have bad policy that everyone agrees with than eventually get god policy that will work."
"The ETS was a flawed scheme. Had the government got it through it would be dead by now because of the financial crisis."
"I also disagreed with the scale of the stimulus package, and I would say I was right... It wasn't evidence-based policy, they panicked. The government put the money into school buildings, they put it in insulation, they put it in stuff they could never reverse."
"The government rammed those decisions through the economy even though they were fraught with risk. No-one was consulted about an alternative view and if you did say anything you were attacked by the the Treasurer and the Prime Minister in public."
Professor McKibbin sits with Dr Henry on the Reserve Bank board and says the only debate he now has with the Treasury Secretary is at the board table.
"If the government won't engage you behind closed doors then an academic has no other choice than to express their opinion in the public interest in public for the public to assess, he said broadening his attack the Rudd government's mode of operation.
"The stimulus created a problem. The government overspent, but they had enough in reserve. Then they decided that because of politics they had to get their spending back so they could claim they had fiscal surplus, for which there is no economic basis by the way, so they come up with a really badly designed resource tax to try and get the position to look good three years from now, and in the middle of a sovereign risk crisis exposed the economy to a reassessment of sovereign risk."
"I am stunned that the Treasury keeps supporting the government."
"The review of the tax system should have been independent of the Treasury and then critiqued by it and other economic agencies."
"The government has ceased to use the Productivity Commission for sensitive questions. It should have been critiquing the National Broadband Network which is a gigantic white elephant waiting to happen."
"Treasury as far as I can tell has become an arm of political policy."
"Historically they have always been the ones who have said - wait a minute - this policy of subsidising green car to try and save the constituents of a particular electorate is not a very sensible way to spend eight billion dollars -- you just don't see that now."
"You see Treasury officials producing what I consider to be fairly politically-based evidence in support of particular political policy, not economic policy."
Published in today's SMH and Age
. "Put down your weapons" - Ken Henry
. You think there's agreement around the the Reserve Bank board table?
. Saturday Forum:The impressive Warwick McKibbin