ROSS GARNAUT: There's A Very Easy Fix For The Budget And It's Already In Place

Getty/Xurxo Lobato

Professor Ross Garnaut has an easy fix to close the savings gap between the $18 billion in budget measures the Government wants to get through the Senate.

Keep the Carbon Tax.

It is an interesting proposition and a question that if put to the Australian public would likely get a different answer now that the Government’s tough budget measures have been revealed.

The AFR reports this morning that Prof Garnaut, arguably Australia’s most senior economist and author of the previous government’s Climate Change Report in 2011, told an audience at the University of Melbourne last night that keeping carbon pricing and abandoning the proposed $2.55 emission reduction fund would deliver the budget between $12-$19 billion over the next 4 years.

This amount neatly fits with the measures opposed in the Senate and Professor Garnaut says that:

Australia can stay within the boundaries of fiscal responsibility defined by the government in this year’s budget by retaining carbon pricing, rather than the array of changes that are at risk in the Senate.

As remote as it seems, this is an elegant fix, as it is likely that the carbon tax repeal is also at risk of being blocked in the Senate.

After the release of poor opinion polls for the Government and the crash in consumer sentiment we saw in the ANZ-Roy Morgan Consumer Sentiment survey again this week, it’s also quite likely that if the Australian public was asked to chose between keeping the carbon tax and the Government’s budgetary measures, they just might go for the carbon tax.

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