Tuesday, December 29, 2009

Ergas and the CPRS

Dear Henry Ergas has gone to print in his column in the Oz today on the topic of the CPRS.

He takes an interesting line that, of course, taxing "bads" is the best way to correct the markets failure to consider social costs (an externality) in making purchasing decisions. His gripe is that the consequence is that you collect a very large amount of tax as a consequence, and that instead of allocating this to everyone (by reducing income tax) Government has a habit of buying off special interest groups.

So, just like the GST an ETS might be a "New Tax" - the question is what you do with the proceeds.

Where Henry becomes fascinating is when he goes off to note that "our political system, under the guise of public beneficence, panders all too readily to these single-issue voters, while shifting costs around, including on to future generations, in ways that are as opaque and inequitable as they are inefficient. Against those pressures, there are pitifully few defences."

While he suggests reasoned public debate as one such way, one gets the feeling that he really wants Plato's enlightened despot in charge. Society run by the perfect economic regulator.

But then think of all his critique's of the ACCC.

Perhaps I misjudge him, maybe his real concern is transparency because he criticises the Government over the number of FOI requests knocked back. But then I remember that as an advocate he was a champion of the cause for confidentiality of submissions to that self-same omnipient economic regulator.

Maybe he just likes to grumble.

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