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."

Tuesday, May 22, 2012

Phil Lowe explains the disconnect between consumer spending and the GST

Some economists were intrigued by a chart in Martin Parkinson's recent speech that highlighted a (possibly statistical) disconnect between consumer spending--as measured by the ABS--and GST collected by the tax office. The RBA's Phil Lowe comments:

I think the change in household spending patterns is another. As I said in my remarks, household consumption growth has been pretty reasonable, in line with household income growth, but it’s been services that have been growing strongly, not goods, and there are a whole range of services where there is no GST tax levied. And so the composition of consumption growth has not been helpful for the GST revenue. So they’re two factors, but I think you’re stretching my area of competence here.