Is the Chief Scientist’s recent science & economy report really pseudo-science?

Fairfax journo Gareth Hutchens has an article in today’s Herald with the headline:

Australia’s scientists forced to rely on pseudo-science to be taken seriously in Canberra

Well, it is April the first.

Hutchens has a go at the recent Chief Scientist and Australian Academy report: The importance of advanced physical and mathematical sciences to the Australian economy (pdf). They engaged the Centre of International Economics to conduct an economic analysis that used the MMRF-NRA computable general equilibrium model to estimate the impacts of a number of input assumptions on the contribution of the physical and mathematical sciences to the economy. The report estimates that the direct contribution of the advanced physical and mathematical sciences is
equal to 11% of the Australian economy (about $145 billion per year). Along with the direct contribution, the report estimates additional and flow-on benefits of another 11%, bringing total benefits to just over 22% (around $292 billion per year).

I felt I had to defend the report, which is not perfect but necessary (I think I also agree with the headline). In doing so I find myself in defence of CGE economic models (which I can’t quite believe I’m doing). Basically, Hutchens reckons that by engaging with an economic consultancy and an economic model, the Chief Scientist and Australian Academy of Science have prostituted themselves (my words) to the same economic lobbying that everyone else in Canberra uses to argue for government support. Here’s my response posted to the comments of the article (slightly edited – doesn’t seem to have made it through, either):

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