Good News on Australia's Economic Policies
By David Henderson
The Australian Parliament voted yesterday to end the government’s tax on carbon. The reporting in the link is pretty good except for this statement: “Australia on Thursday became the first country in the world to abolish a price on carbon.” Of course, the government did no such: all fuels containing carbon are still priced. What was abolished was a tax on carbon.
Also yesterday, Australia’s trade minister, Andrew Robb, rightly crowed about Australian government’s reductions in tariffs over the years, but badly understated the drop. He stated:
We’ve seen over the last thirty years in Australia that tariffs are down on average 2.7 per cent across the economy.
But 2.7 percent is trivial. If a tariff had been a stiff 30% previously, for example, a 2.7% cut would be only a 0.81 percentage-point cut. Presumably Mr. Robb meant 2.7 percentage points rather than 2.7 percent.
But even that understates the cut, assuming that this study by University of Melbourne professor Peter Lloyd is accurate. Check Table 5 on page 66. Average tariff rates have fallen by many percentage points.
HT: Simon Lester of the Cato Institute.