If there is one thing Tony Abbott hates, it’s consensus. He would much rather have a fight than fix a problem, as shown by his speech yesterday to the IPA where he said Australia “plainly, is not working as it should” and that “we are letting ourselves down”.
So what are his suggestions?
Whilst bemoaning the vulnerability of political parties to populism, he went for that most populist of ideas that slashing immigration would reduce pressure on housing prices and congestion in our cities.
But at what cost?
When he was Prime Minister, his government commissioned a Productivity Commission inquiry into the issue. That inquiry did find that high migration rates put pressure on housing costs, but the inquiry also found that maintaining the migration intake helped the economy overall. If the rate of net overseas migration was cut to zero, the modelling said, the cost to the economy would be about $7000 a year per person.
Glenn Withers, professor of economics in the Crawford School at Australian National University in Canberra, said “We know it has a substantial economic expansionary affect. We would not have weathered the GFC as well as we did without a strong expansionary migration program. What is very clear from the evidence is that they contribute more to the public purse than they take out from the public purse.” One of the reasons is that migrants tend to be younger than the population as a whole.
Head of the Reserve Bank, Philip Lowe, said “Our immigration program I see as a source of national strength. To give that advantage up just so that we can take some pressure off housing prices, I find kind of problematic.” The “best” housing affordability policy, Lowe said, would be investment in urban transport infrastructure. This investment would increase access to cheaper land, and provide the amenity needed as cities become more dense.
The other obvious solution is to remove the tax incentives that skew investment towards property and away from more productive enterprises but, with the rate at which government politicians are building up their property portfolios, that is unlikely to happen while the Coalition is in power.
Abbott then took aim at Turnbull’s success in passing his needs-based funding model for education saying “The risk with compromises designed to end policy ‘wars’ is that the war doesn’t actually end, the battleground just shifts; and in the meantime, principles have become negotiable, and the whole political spectrum has moved in the wrong direction.”
No mention of the benefit to children, just the detriment to his political wars.
But it was on energy policy where he really let fly. He wants to freeze the renewable energy target at 15 per cent, to have a moratorium on new wind farms, and for the federal government to go it alone and build a new coal-fired power station.
According to Abbott, a government that’s “serious about keeping the lights on should get another big coal-fired power station into action as soon as possible”, and be prepared to “go it alone” if “political risk means the market won’t do it”.
What he seems incapable of understanding is that it isn’t “political risk” that is holding back new investment in coal – it is economically unviable.
But Tony doesn’t care about that. He just wants to use rising energy prices as a weapon against Labor.
“Maintaining that Labor will put power prices up and that the Coalition will put power prices down will be much harder, though, if our renewable-energy target goes from 23 per cent to 42 per cent, as flagged in [the] Finkel [review],” he said. “We should stop any further subsidised renewable power and freeze the Renewable Energy Target at the current level of about 15 per cent.”
This ignores all the expert evidence that wind and solar power are now cheaper than power from new coal plants and that business as usual will lead to continued price hikes. Energy Australia and Origin agree, urging for Dr Finkel’s recommendations to be translated into action.
For those of us who hoped that Abbott would retire gracefully, he had another message.
“I’m in no hurry to leave public life because we need strong Liberal conservative voices now, more than ever.”
Perhaps someone should remind Tony that it is not his choice alone. It is up to the people of Warringah as to how long we must endure this pugilistic wrecker. Here’s hoping they will put the well-being of our country before Tony’s selfish mission to bring Turnbull down.
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