Believing Barry O’Farrell could cost you “up to” 100 IQ points
The NSW government has released a a frothing at the mouth press release claiming that a carbon price will devastate the economy. As Mary McCarthy would say, every single word in it is a lie, including “a” and “the”. Top billing has to go to that old favorite of shonky advertisers “up to”, as in a carbon price will ” force up electricity prices for NSW households by up to $498 a year.” The Commonwealth Treasury modelling, which I’ve checked, gives an average cost increase of $3.30 or about $170 a year.
Although the analysis is attributed to NSW Treasury, they apparently weren’t hackish enough for the government, which had to go to Frontier Economics to get the answers they wanted. I’m waiting to see the report, but in the meantime, my reactions to the press statement are over the fold
*A $3.7 billion annual hit to the State’s economy: No time scale is given for this claim, but it is certainly invalid as regards the short run, when the entire revenue raised by a carbon price in NSW will be lower than the stated amount. The only plausible interpretation is that it refers to projections for the long-term, probably by 2050. NSW State Gross Product is currently $400 billion per year, and is expected to double by 2050, so the claimed reduction would reduce 2050 state product by less than 0.5 per cent, from around $800 billion to around $796 billion
* It will also force up electricity prices for NSW households by up to $498 a year. This is a use of the “up to” trick that would lead to criminal prosecution if it were tried in a commercial advertisement. The Commonwealth Treasury estimates an impact of $3.30 a week for the average household or $171 a year
* Businesses will pay $927 to $4191 more a year, depending on usage: These (absurdly precise) figures are bizarre and nonsensical. The Commonwealth Treasury estimates suggest an electricity price increase of around 10 per cent for small users, so business that spend less than $10 000/year on electricity (the vast majority) will pay less than the bottom of the suggested range. Even on the government’s claimed figure of 15 per cent, the estimates are unbelievable
* The job loss figures do not represent an actual loss of jobs, but a reduction in jobs that would otherwise be created. Moreover, they take no account of the larger number of jobs likely to be created in industries that will expand as a result of the carbon price. As a a result, the estimates are essentially meaningless.