Rudd Deceives You Yet Again
Posted by papundits on 11/10/2009
By Andrew Bolt
Professor Sinclair Davidson contrasts what Kevin Rudd says his huge emissions taxes will cost against what Treasury told him they’d cost:
Another problem with the Prime Minister’s argument is jobs. Rudd says
Treasury modelling also demonstrates that all major employment sectors grow over the years to 2020 – substantially increasing employment from today’s levels. Treasury modelling also projects that clean industries will create sustainable jobs of the future – in fact by 2050 the renewable electricity sector will be 30 times larger than it is today.
Unfortunately that is not what the Treasury modelling indicates. At page 151 we read,
… real wages are assumed to adjust in the long run to ensure the labour market remains in equilibrium. As output slows slightly in response to emission pricing, firms’ demand for labour also slows slightly. In the short run, real wages are assumed to be sticky, taking up to 10 years to adjust, resulting in some temporary unemployment. However over time, real wage growth slows, demand for labour increases, returning employment to reference case levels …
The Treasury indicates that Australia will experience ‘up to 10 years’ of ‘temporary unemployment’ before real wages decline. Treasury forecasts that real wages might decline by anywhere between 5.4% and 11% relative to the reference case. That is why there is no unemployment; Treasury assume it away by imagining that real wages fall. At the same time, Treasury assume the green jobs and green technology into existence. That is not at all what Rudd told the Lowy Institute.
The CPRS is turning out to be a lot more expensive than first promised.
That is putting it mildly.
Andrew Bolt is a journalist and columnist writing for The Herald Sun in Melbourne Victoria Australia.
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