Economists back carbon tax package

A survey of 140 economists found 60% were in favour of the Gillard government’s carbon tax policy. AAP

A survey of 145 economists released today found that 60% believe the Gillard government’s carbon tax is good economic policy.

The carbon tax package, announced on Sunday, penalises 500 heavy polluters for their greenhouse gas emissions and will create $24.5 billion over its first four years. It will be replaced with a market-based emissions trading scheme in 2015.

The policy has been fiercely opposed by the Coalition, which favours a suite of direct action policies instead to tackle climate change.

However, the survey of economists found that 85% of respondents who had a view on the Coalition’s plan did not think it was sound economic policy.

The survey was conducted on Monday at a meeting hosted by the Economic Society of Australia at the Australian National University (ANU).

“We asked two questions. Roughly how much are you in favour or against this carbon tax package announced by the government? And what is your reaction to the direct action plan of the Coalition?,” said the Economic Society of Australia’s president, Professor Bruce Chapman from the Crawford School of Economics and Government at ANU.

“The results were fairly clear cut. Something like 60% were in favour of the governments approach and 25% were against and 15% had no opinion.”

Professor Chapman said the results were not surprising.

“One of the basic tenets of economics is that if people are engaged in an activity which is seen to be harmful to society, then the role of government is to tax that activity to diminish that type of behaviour,” he said.

“It would be fairly surprising for a government to be engaged in penalising behaviours that were seen to have adverse conseqeuences, such as carbon emissions, and for economists not to be in favour of that. It’s a fairly mainstream way of analysing public policy.”

The survey coincided with the release of another poll of 500 members of the Economic Society of Australia on a range of policies, including the mining tax and middle-class welfare.

Around 70% of respondents to that survey said they support a national excess profits tax on miners and two-thirds of want middle-class welfare cut so that more assistance can be given to the disabled and severely disadvantaged.

“The bulk of the economists favour abolition of the Baby Bonus and the First Home Owners Grant, and are in favour of introducing the indexation of tax thresholds and for the introduction of congestion charges,” Professor Chapman said.

“A solid majority of the male economists surveyed opposed requiring quotas of women for company boards. However, of the 94 women who responded to this question, opinion was balanced with 44% for and 44% against.”