We watched Malcolm Turnbull being “grilled” by Leigh Sales – OK, a flirtatious little encounter, although I think Sales has stopped just calling the PM, Malcolm – last night on 7.30. We thought he did rather well although that was not the conclusion of Fauxfacts (Sales unloads on Turnbull is the heading).
In true ABC faux-aggressive style (put away that knife though, Leigh), Sales came up with this amazingly garbled proposition:
“In your first interview with this program as Prime Minister you said that the first principles of the Turnbull government would be the free market, so why are you now violating that principle by backing negative gearing, which is a government intervention that distorts the market,” she said.
“That is so wrong, Leigh,” Mr Turnbull said. “Negative gearing is income tax 101, and a normal tax deduction, not a government incentive.”
Who put this ludicrous idea into her head? The tax deductibility of the costs of investing in an income producing assets violates the principle of free markets? Is she nuts?
And then she was Miss Know-it-All about the Productivity Commission’s assessment of the impact of the ABCC on aggregate productivity in the construction industry.
If she had bothered to look at the appendix of the report on Public Infrastructure, she would have realised that it is all rubbish – garbage in, garbage out. There are serious measurement errors when it comes to the measurement of productivity and there is no multifactoral analysis undertaken. It is just a matter of chopping up the data according to the dates in which there were different institutional arrangements.
When Independent Economics (Chris Murphy) undertook the analysis, he came to a different conclusion, pointing out a gain of productivity of between 10 and 20 per cent.
The reality is that this type of analysis can never be conclusive; detailed comparative case studies are really the only way to go. But Sales didn’t bother to point out the PC’s conclusion on the topic:
The industrial relations environment in the construction industry remains problematic, mainly in general rather than civil construction, with the problems much greater for some sites, unions and states. Governments can use their procurement policies to drive reform, and penalties for unlawful conduct should rise.