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The Government/Democrats’ package of changes in indirect taxes
Author(s) -
Dixon Peter B.,
Rimmer Maureen T.
Publication year - 2000
Publication title -
australian journal of agricultural and resource economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.683
H-Index - 49
eISSN - 1467-8489
pISSN - 1364-985X
DOI - 10.1111/1467-8489.00103
Subject(s) - negotiation , benchmark (surveying) , government (linguistics) , economics , package design , relevance (law) , welfare , public economics , general equilibrium theory , range (aeronautics) , macroeconomics , econometrics , engineering , political science , engineering drawing , geography , aerospace engineering , linguistics , philosophy , geodesy , law , market economy
Australia is faced with a comprehensive package of changes to its indirect tax system, including the introduction of a GST. The Government’s only quantitative analysis in formulating the package employed PRISMOD, an archaic input‐output price model. PRISMOD sheds dim light on a very limited range of policy‐relevant variables. This article explains how PRISMOD works; this is of continuing relevance because PRISMOD results are a benchmark in negotiations concerning the price effects of the tax package. Then an assessment of the package is made using MONASH, a comprehensive dynamic general equilibrium model. Overall, the conclusions are negative: the package is welfare‐reducing and unnecessary.