In 1958 British novelist Kingsley Amis wrote a short story called The 2003 Claret in which the protagonists contemplate the utility of a time machine that would enable them to test the ageing qualities of particular wine.
Such a device would be handy in today’s world. It could be used to test the relative effects of public policy proposals. It could, for example, assess the impact of the proposal by West Australian Nationals leader Brendon Grylls to impose a $3 billion a year tax on selected iron ore producers.
My sense is that a research team sent into the future to examine its effects would come back with a grim report card. But you don’t need to take my word for that.
Deloitte Access Economics analysed the regional, state and national impact of the Grylls tax proposal. I accept that economic modelling is a second best option to a time machine, but the numbers were pretty stark. Nearly 3000 jobs lost in the Pilbara alone, as well as a smaller iron ore sector and West Australian and national economy.
Separately, one of the world’s most respected tax experts, professor Jack Mintz from the University of Calgary, found that the Grylls tax would ensure that West Australian iron ore producers face the world’s most punitive tax regime. Producers in WA would face an effective tax rate three times higher than Brazil, which is about to open the world’s largest iron ore mine.
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