Thursday, July 14, 2011

What economists want - the survey

85% Cost benefit analysis for major projects
79% Carbon prices rather than direct action
76% Interest rate cuts in a recession
76% Extra public spending in a recession
76% Jail sentences for price fixers
74% A mining tax on excess profits
73% Congestion pricing in cities
73% An end to the First Home Buyers Grant
73% Indexed Income tax scales
72% A balanced budget over the cycle
71% An end to the baby bonus

Economic Society of Australia, survey of 500 members

If Australia’s economists had the vote, Julia Gillard’s carbon tax would win a landslide.

A survey of 145 delegates attending the Australian conference of economists in Canberra finds 59 per cent think the tax is “good economic policy”, compared to just 11 per cent for Tony Abbott’s alternative. Seventeen per cent “agree strongly” that Gillard’s scheme is good policy compared to 4 per cent for Abbott’s.

“It’s basic economics,” said the economic society president Bruce Chapman, outlining the findings in an Australian National University lecture theatre. “It’s a fundamental part of training that activities with negative spillovers get taxed and activities with positive spillovers such as education get subsidised.”

Skewing the results was that a surprising one in four of those surveyed knew little about the Tony Abbott “direct action” alternative. Around 27 per cent said they were not sure or had no opinion about the Abbott scheme compared to only 15 per cent for the Gillard scheme.

Queensland University professor Paul Frijters who helped design the survey, said the result wasn’t so much an endorsement of Gillard as an endorsement of economists themselves.

“In the international debate about global warming economists have argued the best approach is to ensure polluters pay for the damage they do. We have won that debate. It’s little wonder we support governments who have adopted adopted the standard economic approach. It’s like cheering ourselves"...

Conscious the outcome would not endear the profession to Mr Abbott who a week ago said economists views said more about them than the issue at hand, Professor Chapman said all surveys were flawed and economists disliked answering any question that was put simply.

A separate broader survey of 500 members of the Economic Society found them in overwhelming agreement on many of the big economic questions. 85% believed cost benefit inquiries should be mandatory for large infrastructure projects, an implicit criticism of the government’s approach to the national broadband network; 79 per cent thought carbon pricing was better than direct action; 76 per cent supported cutting interest rates and boosting government spending during a recession and 74 per cent supported a mining tax on excess profits.

Confirming their reputation as a dismal bunch, 73 per cent wanted the first home owners grant abolished and 71 per cent wanted the baby bonus abolished.

The question of women on company boards split the economists on gender lines. Women were evenly divided on the question mandatory quotas, men overwhelmingly against.

Scrapping tariffs, once about the only question guaranteed to unite economists now has more niche support at 59 per cent.

Published in today's SMH and Age

What Economists Want

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