Terrible fact checking

Both Liam Hehir and Robert MacCulloch point out that the so called fact checking of the first leaders debate by Auckland University’s Public Policy Institute ranged from flat out wrong to conflating opinions and facts.

The latter points out:

Of the 5 “false” statements they list, one is about economics, my subject:

• No fruit and veg GST savings will be passed on to customers (Luxon) – Grocery Commissioner will monitor pricing to prevent this.

However the academics are themselves wrong – since the Grocery Commissioner’s legal powers to enforce passing on the GST cut only apply when anti-competitive behavior is being practiced. If the elasticity of demand of fruit & veges is very high (that is, even a tiny drop in prices would lead to a large increase in demand) then barely any of the GST cut would be passed on to customers. Hence it is legitimate for Luxon to hold that view, unless the academics can produce evidence of their own elasticity-of-demand estimates across a range of such products that support their view (which they haven’t done).

I suggest TVNZ be more careful when it “fact checks” our party Leaders and labels things as “mostly untrue” or “false”. The only patently false statement I have heard these past days was the PM stating that the whole 100% tax cut on fruit and veges would be passed onto consumers, because he had appointed a “grocery commissioner”. What a porker.

A good fact check would have referenced the research done by the Tax Working Group, views of Treasury and IRD and overseas evidence. But instead they merely asserted their own views, based on a false understand of the law.