Calls for code of conduct in wake of extraordinary abuse of economic modelling (March 2016)

The Australia Institute has called for a code of conduct for economic modelling in the wake of flawed and ridiculous BIS Shrapnel economic modelling of negative gearing.

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A code would require key assumptions to be revealed, context and comparison to be provided, and the identification of who, if anyone, commissioned the work.

“Modelling results are being used to make important policy decisions that have the potential to effect all Australians,” Executive Director of The Australia Institute, Ben Oquist said.

“Today we’ve seen modelling driven into the centre of the tax reform debate by an unknown vested interest. While the startling allegations in the BIS Shrapnel report have been quickly torn apart by many economists, it has nonetheless misinformed and mongered fear among the public.

“We don’t know who this was produced for, but even more importantly, it’s not even clear how the key assumptions were selected.

“Everyone knows that when it comes to modelling; garbage in, garbage out.

“Auditors have a code of conduct because financial information is open to abuse and people rely on this information to make important decisions

“Actuaries in Australia have a code of conduct that includes context, basic rules and a declaration of fairness and accuracy.

“We call on the government to develop a code of conduct to ensure the standard of all economic modelling used to inform Government is transparent and of a high standard.

“It’s not too much to ask for a consistent standard. There is absolutely no reason why all sides can’t at least agree on the minimum rules,” Oquist said.

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