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Big numbers have a tendency to take on a life of their own, writes Tom Westland
Economic modelling with unstated assumptions is a bit like chicken nuggets with unstated ingredients – one swallows at one’s own risk. And yet there’s been a lot of it about lately. Just this weekend, reporting on a new study of negative gearing, the Australian warned that abolishing this much-used tax concession could lead to “rents increasing by almost $10,000 on average each year.”
The report was released by the Property Council of Australia and the newspaper article was written by Troy Bramston. Somewhere in the middle of Mr Bramston’s glittering curriculum vitae may be found the item “Property Council of Australia: lobbyist,” a historical fact that you might think would at least furnish the bloke with the skills required to interpret Property Council of Australia spin correctly. You would, however, be wrong. (The $10,000 in the headline was a mistake; the author had mixed up taxable income and tax liability.)
But Mr Bramston ought not feel too bad – or, at any rate, any worse than many of his colleagues, who had a little collective difficulty getting across the detail of a report modelling the expected impact of preferential trade agreements with South Korea, Japan and China. Prepared by the Centre for International Economics, or CIE, the report was released in mid June by the Department of Foreign Affairs and Trade to help make the case for the three deals…