The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Thursday, February 3, 2011

Rating Agency Moody's Endorses Gillard's Flood Levy: Game-over for critics

Well, it is hard to think of a better sign-off than this, which accords with my own analysis that was previously published by the ABC's The Drum:

Moody's Analyst: Australia's Flood Tax Is Sound Fiscal Policy

By Enda Curran

NEW YORK (Dow Jones)--Australia's planned new flood levy is sound fiscal policy, a senior analyst at Moody's Investors Service said Tuesday, flying in the face of a barrage of criticism for the measure from opponents who say it is an unnecessary burden on taxpayers. The comments by Steven Hess, a New York-based senior credit officer in Moody's sovereign risk group, runs counter to a storm of opposition to the government's A$1.8 billion Australian dollar tax designed to offset reconstruction costs after flooding wrecked swathes of Queensland. Flooding in Queensland, a state which makes up some 20% of Australia's A$1.3 trillion economy and supplies close to two-thirds of the seaborne trade in the high-grade coking coal used for steelmaking, has already punched a A$5.6 billion hole in the federal budget...Since unveiling the tax plan last week, Prime Minister Julia Gillard's minority Labor government has also felt hostility to the measures from opposition politicians and some in academia, most notably central bank board member and well known economist Warwick McKibbin. "The levy shows the strong fiscal discipline in Australia," Hess, who is Moody's top analyst for the U.S. and Australia, told Dow Jones Newswires in an interview. "The prime minister's commitment to returning to a balanced position is evidence there is a very strong discipline in Australia," he said. The fate of the tax proposal rests on the shoulders of non party and greens lawmakers in both houses of parliament who prop up Gillard's government. Australia is one of the world's strongest AAA rated sovereigns with net debt projected to peak at around 6% of national output. Any fiscal slippage in the government's plans to return the budget to surplus by fiscal year beginning July 1, 2012 can be more than tolerated, Hess said. "A year or two here or there doesn't matter from a rating perspective," he said.