Measured by Professor Warwick
McKibbin’s list of the five best things to do with the resources
windfall, as outlined in yesterday’s Crikey, Peter Costello did even
worse than expected.

I thought he would score about 1.6 out of
five, but instead he barely managed one. Here’s the list of preferred
options from the Reserve Bank board member and ANU professor compared
with Costello’s performance:

Goal 1: Tax reform (not tax cuts)
– major simplification, including a top personal tax rate of 30%, to
reduce the resources wasted on avoiding tax. Result: Not much, just a
fiddle with the marginal rates and thresholds that add up to not much
more than surrendering some bracket creep.

Goal 2: Infrastructure. Result:
Opportunity lost – $2.3 billion towards fixing substandard road and
rail systems remains playing catch-up, forever behind the game. It goes
nowhere near putting us in front. And while Cossie fiddles about,
people continue to needlessly die on a Pacific Highway that should have
been four lanes last century.

Goal 3: Education. Result: Almost nothing.

Goal 4: Increasing workforce participation,
including improving availability of child care. Result: Costello’s only
score – the superannuation changes could keep the old folks working for
longer and uncapping child care places should increase the number – for
those who can afford it. The disappointment is that there was no effort
to clean up the mess that is the child care system.

Goal 5: Addressing climate change by pricing carbon emissions to reflect the cost of the damage they inflict. Result: Zilch (what climate change?).

Total score:1.3/5 or 26%. Definitely a failure in Professor McKibbin’s class.