Two economists on the radio

This morning Stephen Koukoulas (The Kouk) and I were interviewed on Canberra ABC radio. We were talking about the tobacco debate that has sprung up following Christian Kerr’s article last week.

I think the presenter was somewhat confused because The Kouk and I agreed on many things – what we disagree on is on the interpretation of data. To have two economists looking at the same data and coming to very different conclusions is nor unusual or even rare. In fact it makes economists the butt of jokes.

Alex - economists

What makes this instance interesting is the public hysteria over smoking. The anti-smoking lobby has done an magnificent job of stigmatising and denormalising smokers and smoking. To the extent that anyone who questions any particular anti-smoking policy must be corrupt and on the take.

So The Kouk opened up his talk by stating that he has never worked for a firm that has accepted tobacco funding. The implication being that I have. Except I am not an employee of the IPA – I am a senior fellow but that is an honorary role.

More importantly, however, I don’t believe The Kouk’s statement to be quite correct.

Big Tobacco is a big taxpayer. It is a huge taxpayer. The Henry Review identified Tobacco excise as being one of the top ten taxes that collectively raise nearly 90 per cent of Australian tax revenue. That is not including any corporate income tax (also in the top 10) or payroll tax (also in the top 10) Big Tobacco pays. Did I mention the GST? Any and every person employed in the public sector is paid out of tax revenue collected in part from Big Tobacco. That includes the entirety of the ABC and, dare I say it, The Kouk’s salary when he was employed in the Office of the Prime Minister. To the extent that I work in a public university I too receive tobacco money (mind you, that part of the university I work in earns so much from international students, I can comfortably say that I earn less from tobacco tax than does anyone at the ABC).

Unless we want to argue that somehow the ATO acts as a tax kidney or liver and purifies money as it passes through from big tobacco and their clients to the public service the fact is that the ABC “accepts” money from big tobacco.

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30 Responses to Two economists on the radio

  1. Steve D

    [Before listening to the podcast.] Did you point out the receipt of big-tobacco money by all government employees?

  2. feelthebern

    & what about unions that accept donations from tobacco companies who then donate/support the Labor party?

  3. .

    Unless we want to argue that somehow the ATO acts as a tax kidney or liver and purifies money as it passes through from big tobacco and their clients to the public service the fact is that the ABC “accepts” money from big tobacco.

    They claim money made from illegal activity as well.

    They’re just as grubby as the rest.

  4. H B Bear

    The Kouk opens with a cheap shot against the IPA. Did he also mention Gina Rhinehart?

    I need to fill in my Green-Left buzzword bingo card.

  5. Max

    The Kouk opens with a cheap shot against the IPA. Did he also mention Gina Rhinehart?

    I need to fill in my Green-Left buzzword bingo card.

    Exactly their first tactic is to get emotional and go ad hominem.

    We need to call it out and hammer right back with some ad hominem example of Left wing barbarity

  6. Bruce of Newcastle

    what we disagree on is on the interpretation of data

    I was struck how the first few paragraphs could so easily be about global warming, or education, immigration policy or health spending or any other of the Left’s pet areas.

    In all of these the interpretation of the data is both crucial and almost completely absent from discussion by the likes of the ABC. I think it may be aided by the dumbing down of school curricula over the last few decades such that the general population no longer are equipped with the skills needed to investigate for themselves. And that is at a time when it is now easier than ever to so do.

    I’m also struck that when someone raises an issue of data interpretation which does not fit with the Left’s tribal meme the result is to sling mud at the person – climateers also like to irrelevantly accuse opponents of taking tobacco money. None on the left now accuse them of pot smoking or frequenting prostitutes since these peccadillos are now apparently OK. The injustice of such assaults is a sure sign the data does not favour them. Perhaps there should be a Sinclair’s Law, that anyone who accuses someone of taking tobacco or oil money is always wrong about the data.

  7. JakartaJaap

    Bruce, my fellow Novo, agree 100% with the ‘dumbing down’ meme. Absolutely correct. And I might add I despise tobacco and smoking.

  8. Biota

    This tobacco debate demonstrates a characteristic of the left- they truly believe that they can coerce all to their view. Smoking will never be wiped out because most people make their own choices. It has been substantially reduced which I’m ok about because I don’t smoke.

    Interesting that in India smoking is not part of the culture so even though anyone is free to do so you rarely come across it much.

  9. Roger

    Legal brothels pay tax too, but I seriously doubt any church going pensioners stay awake at night worrying about living off immoral earnings. Consolidated revenue collected from taxes is a form of official laundering, if you like, such that the revenue redistributed as wages and social security payments is regarded as “clean” by just about everyone except people with serious psychological issues. Sinclair, this is just “well, here’s an ad hom back at ya, Kouk”, and it’s a rather weak one at that. Stick to the facts; you make a much better case that way.

  10. .

    No roger.

    The ATO also claims tax on money earnt illegally, as well as in activities government allows bu discourages.

    I seriously doubt any church going pensioners stay awake at night worrying about living off immoral earnings

    They should.

  11. Unless we want to argue that somehow the ATO acts as a tax kidney or liver and purifies money as it passes through from big tobacco and their clients to the public service the fact is that the ABC “accepts” money from big tobacco.

    This is precisely what people who support income redistribution want to argue.

    It’s a form of religion, not a form of science or economics. You take money from the BAD people and put it through the holy filter and it comes out the other side, and you give it to the GOOD people. Crude, but effective.

    Of course, real religion would call this ‘envy’ and ‘sloth’ and ‘theft’, but we’re not interested in any of that hokey old time religion here.

  12. Roger

    They should.
    Maybe, dot, but they don’t. Which goes to my point: even if people have scruples about government derived income due to its possible source, they mostly seem to find they can live with any moral tension they feel (at least they’re not marching massed down the streets in my neck of the woods demanding government stop collecting taxes from immoral enterprises), because, I suggest, once the money passes into government hands it is deemed morally “neutral” or “clean”,if only because it is perceived to be two or three steps removed from the morally tainted exchange.

  13. J.H.


    “Unless we want to argue that somehow the ATO acts as a tax kidney or liver and purifies money as it passes through from big tobacco and their clients to the public service the fact is that the ABC “accepts” money from big tobacco. “

    Not only that. The ABC is also “Big Tobacco’s ” largest advertiser.

    Since it is illegal to advertise on any form of media or even have trademarked packaging….. The ABC subverts this daily by continually reintroducing the idea of smoking to the public.

    Every day the ABC markets the idea of smoking to new taxpayers by mentioning that smoking is, “bad for you”, anti social and should be prohibited. All of which is an anti establishment message….. It is a specifically targeted marketing campaign aimed at the youthful.

    The ABC is nothing but a shill for Big Tobacco. :)

  14. Old School Conservative

    Maybe, dot, but they don’t.
    Probably because the respective Local, State and Federal taxing bodies keep this form of tax revenue very quiet.

  15. 1234

    Such tortured arguments merely show that you don’t really have a point.

  16. JohnA

    I did wonder if the ATO was a large money-laundering business…

    I can now rest easy at night – I know the answer. :-)

  17. Andrew

    Those on the left want to legalise marijuana amongst other soft drugs yet want to effectively ban tobacco….right?!

  18. .

    That’s correct Andrew, and it is insane as Nicola Roxon promoting healthy eating.

  19. Every dog has its day

    The key battle over tobacco was fought when property rights were changed from smokers to non-smokers. The rest (regulations, propaganda etc) are mere excess and control by the state. Changing property rights was sufficient to redress most of the issues, e.g. gone are the bad days of sitting in an airplane full of stinking tobacco smoke and we can now enjoy a nice meal without someone blowing stench in our face.

  20. Infidel Tiger

    e.g. gone are the bad days of sitting in an airplane full of stinking tobacco smoke and we can now enjoy a nice meal without someone blowing stench in our face.

    Are you kidding? That has been the biggest violation of property rights.

    The owner of the airline and the restaurant can no longer offer those options to their clients. Their property rights have been reduced.

    It’s without doubt the worst part of the whole ridiculous war.

  21. Demosthenes

    e.g. gone are the bad days of sitting in an airplane full of stinking tobacco smoke

    Interestingly, it was the airlines who pressured the government for the ban.

  22. Infidel Tiger

    Interestingly, it was the airlines who pressured the government for the ban.

    All of them?

    I’ll bet my arse their is a market for air travel that accommodates smoking.

  23. Aristogeiton

    Demosthenes
    #1353884, posted on June 20, 2014 at 4:48 pm
    e.g. gone are the bad days of sitting in an airplane full of stinking tobacco smoke

    Interestingly, it was the airlines who pressured the government for the ban.

    I would like a reference, because I can’t see how this could be the case. The airlines are perfectly free to set the terms of their contract of carriage with the consumer.

  24. Aristogeiton

    Sorry. Wrong fred.

  25. Every dog has its day

    Infidel, obviously it would be better if there was a smoking flights option. Its probably not an option because of regulations but I wonder if it would be viable. Would you get enough people to want to fly on a certain route with smoking option? I can see this working in say Melbourne-Sydney route, but hard to see this viable Melbourne-London. A smokers cabin might be one option; smokers could pay extra for the luxury of sitting in an area where they can light up to their hearts content.

  26. Every dog has its day

    “One curious and unintended consequence of the aeroplane ban [on smoking] was that airlines began to save money by changing the air in the cabin less frequently. Traditionally, this was done every two minutes and old air was never recirculated, but with no tobacco smoke to draw attention to the quality of air, the carriers reduced air changes to once every twenty minutes. This led to a musty aroma on board and, according to a report in The Lancet, contributed to the appearance of Deep Vein Thrombosis, a disease unknown in airline passengers until the 1990s.”

    Page 163 of Velvet Glove, Iron Fist: A history of anti-smoking. By Christopher Snowdon.

  27. Aristogeiton

    Every dog has its day
    #1353950, posted on June 20, 2014 at 5:36 pm
    “One curious and unintended consequence of the aeroplane ban [on smoking] was that airlines began to save money by changing the air in the cabin less frequently. Traditionally, this was done every two minutes and old air was never recirculated, but with no tobacco smoke to draw attention to the quality of air, the carriers reduced air changes to once every twenty minutes. This led to a musty aroma on board and, according to a report in The Lancet, contributed to the appearance of Deep Vein Thrombosis, a disease unknown in airline passengers until the 1990s.”

    Sounds like a lawsuit to me.

  28. stackja

    ABC “accepts” money from big tobacco.

    So help your ABC, Friends of the ABC and smoke that cigarette as Merle Travis and Tex Williams, said.

  29. Amused

    There was only one economist on the show, and that was Sinclair. The Kouk believes in fairy tales.

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