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Turning down the economic turbo boost

By Corin McCarthy - posted Wednesday, 9 September 2009


And the PC found Rudd's 20 per cent renewable energy target (RET) will not achieve any further carbon abatement above the emissions trading scheme but would impose further costs borne by consumers through higher electricity prices.

This combination of policies will lead to a higher NAIRU. This is a sub-optimal result of more inflation, higher interest rates and lower labour utilisation than should be the case.

We are already seeing evidence for the raising of interest rates by the RBA amid a period of continued labour under-utilisation by business.

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This is equivalent to turning down our economic turbo boost on medium-term growth.

Treasurer Swan should take note before nearly three decades of hard won gains are lost!

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This is an extended version of an article first printed in The Australian on July 3, 2009.



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About the Author

Corin McCarthy was an adviser in opposition and government to Craig Emerson MP. He also advised Labor’s 2007 election campaign on small business issues. He has written widely on these issues in The Australian and On Line Opinion. He currently works as a lawyer in London advising on major infrastructure projects. These views are his own.

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All articles by Corin McCarthy

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