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Tag Archives: direct action

Turnbull’s Innovation – a rebranding of the same old pocketful of promises

By David Tyler

Malcolm Turnbull’s ‘Innovation! Package‘, turns out to be another boost to small business and nothing to do with innovation at all. It is another conjuring trick from a government pledged to avoid commitment or accountability under the guise of ‘encouraging the free flow of ideas and entrepreneurs’. It is based on a seriously defective business model, the tech start-up. As a strategy toward economic restructure, it is a poor choice; an inexcusable error of judgement.

Above all, Innovation! is an opportunity missed. Instead of investing in renewables, boosting employment and kicking its fossil fuel dependency, the Coalition has chosen the trendy but flaky tech start-up business enterprise, a choice which will distract from tackling its rising carbon emissions while further trashing Australia’s former reputation as a good global citizen.

For all Greg Hunt’s absurd claims that we lead the world in climate policy, expert report, based on a range of measures, from the UN climate talks in Paris yesterday reveal us to be third last. Although Julie Bishop may fluff around on the world stage promising to fix climate with ‘innovation’ the truth is that we are substituting urban myth for science or economics.

The start-up myth itself is enchanting and beguiling. Rich young San Francisco Bay Area, California dudes meet somewhere on the autism spectrum and hunker down to a year or two of nerdy anti-social existence. They live off their wealthy parents while they code software 24/7. Overnight they become billionaire misfits and eccentric publicity-loving celebrities proving all along to the world that smarts matter. The PM, especially, loves this tale.

The dudes attract a few other couch surfers along the way together with a rash of venture capital: rich folk who gamble by lending the dudes money in the hope of a huge return on their investment. Or not. Stop the press.

The start-up success story is an urban myth. Surely no-one in their right mind would recommend we adopt this model to fix our own tanking economy? If he is serious about the Innovation! hoo-ha, Mal’s judgement is once again is up the Silicon Valley creek.

Start-ups are expensive failures as a rule. Current UC Stanford and Berkeley research shows that over 90% of start-ups self-destruct. Typically, software dudes borrow to build a product for which there is no customer, a product for which they also have to manufacture a demand. Nothing like putting on the wings when your craft is taxiing along the runway. When the product is ready to market, the dudes have no buyers, no income and no funds to continue and they crash. The dudes fall back on couch-surfing until they inherit.

Not all give up. There are serial starters-up who make failure a lifestyle choice. Our PM warms to these. He will see to it that failure is elevated in our own society to the status it deserves by taking the sting out of bankruptcy. No stranger to failure himself, politically, he will ignore the difference between political and business failure. Taxpayers will pick up the tab.

Even the few start-ups who succeed, employ few workers and minimise their taxes. Outfits like Google or Apple or Facebook are adept in creative tax accountancy. What start-ups are good at is making profits for investors.

Making a few rich dudes richer is no way to rebuild a nation’s prosperity. Start-ups offer no key to economic revival. They do, however, offer an attractive package to business classes, a package which is trendy enough to deceive the mug punter who will pay the bill through higher taxes. And coal is spared by default.

Strip away the packaging and Innovation! looks like plain old crony capitalism; a rebranding of the same old pocketful of promises to the big end of town that is the Liberal Party’s reason for being. A bit of tinkering around the edges is added to confirm Innovation!. Some refunds are touted as reinvesting in science as if government has suddenly come to its senses after destroying the CSIRO’s morale and much else with it. Turnbull supporters seize on the refunds as proof that Mal is progressive after all. The facts attest otherwise.

Some ‘efficiency dividend’ cuts from CSIRO, made when ‘good government’ had no need of science, will be returned. But it is nowhere near enough funding to do a ‘reset’ even if CSIRO wanted to. Or it were possible. So much knowledge has already been irrevocably lost. But business and science will be able to hold hands in the cosy, innovative Turnbull era instead of being at arm’s length or independent as empirical impartiality dictates.

Academics are to be enticed out of ivory towers to team up with business types in an alarming re-run of the wishful thinking that ignores our economy’s small size. We do not have the money. Venture capital is just not available here to the degree that it is to UK or US researchers. The priceless value of pure research in non-commercial fields is also ignored, although vital to innovation and the foundation of all science.

So what are we left with? Another tax break for investors? A newer, softer neo-liberal bankruptcy-lite to allow ‘entrepreneurs’ to quit more easily; bail out of financial obligations such as wages to redundant workers more readily? An incubator for shonky con-men and dud business ideas? Strip away Innovation! Package wrapping and most of what is left amounts to a scheme in which privileged venture capitalists are subsidised by everyone else.

Attracting venture capital, we are told by our po-faced ring master Turnbull will enable the best business brains to invent new businesses which in turn will G-R-O-W the economy. We are to forget in all the hoopla and excitement that venture capital has no interest in progress or innovation as such. But it loves huge profits.

Turnbull expects us to fall in love with a scheme to encourage those whose business model includes the very best the Cayman Islands has to offer. It will not build a 21st Century economy or a nation but it will accelerate our already disturbingly rapid divergence into two distinct nations, a nation of haves and have-nots.

Yet is anyone really surprised by Turnbull and Pyne’s surprise package? Turnbull gave us our NBN, popularly known as ‘fraudband’. A political stunt, NBN is now woefully behind schedule, over-budget, slow and over-priced. It is increasingly evident to consumers that the NBN project, like Direct Action is fundamentally flawed.

Substituting copper wire for fibre allowed the LNP to undercut Labor’s real NBN, but it is a bit like carrying forward Kyoto credits instead of reducing our carbon emissions, an accountancy trick which does nothing to make it all work. A sale of Turnbull’s NBN lemon is rumoured. In softening bankruptcy rules, Monday’s message is that it’s OK to fail. You learn from it. Turnbull would know. Or is it OK to fail, provided someone else picks up the tab?

A Humpty Dumpty for our times, Turnbull can make Innovation! TM mean whatever he chooses as he peddles a scheme to boost his wealthy backers’ fortunes at the expense of all the rest of us; a type of subsidy for the investing classes. Treasurer Morrison is on standby to announce further cuts in government spending; cuts to our services and quality of life as a nation, all in the name of Innovation! Innovation! is already morphing into a new, secular religion, at least in Liberal Party circles. Or is it a tax-deductible church and charity to business? What is certain is that it will cost us all dearly.

Innovation promises, programmes are old hat in Australia. Innovation policy expert Roy Green notes that Australia has had 60 reports at Commonwealth level on innovation since 2000. $9.7billion of government funds is spent annually on ‘research and innovation’ across 13 portfolios and 150 budget line items.

Making Innovation! into a faith means that it is immune from criticism. You can’t be against the future can you? Only a heretic would be sceptical. Challenging the creed is almost un-Australian, as Malcolm Turnbull clearly implied when he chided Leigh Sales on Monday’s 7:30 Report. ‘Aunty is not interested in Innovation!?’ he gibed. Nor was she excited. ‘Exciting’ infects all government policy announcements it seems. It is becoming a test of faith. Forget reason. If you are not excited, you are beyond the pale; an unbeliever and a Luddite.

Turnbull’s ‘exciting’ announcement on his nation’s future is pure theatre. Spruiking his package around lunch time Monday, the PM is flanked by our agile new Innovation! Minister, Christopher Pyne, the consummate political organ grinder’s monkey who is reinventing – repositioning himself – ‘in this space’ – before our very eyes. Pyne is flattered, he says, to reveal that his name was called second when Turnbull announced his new cabinet, but to others the PM’s choice of Christopher Pyne for the new portfolio signals an each-way bet at least on its success.

A spectacular flop as a ‘back to the future’ Education Minister, whose advisors included back to basics gurus, Kevin Donnelly and other advocates for corporal punishment and that old nostrum ‘the Judaeo-Christian tradition’ to purge the modern filth of relevance from children’s learning, Pyne peddled his ideologically blinkered, backward vision of education as a private market-driven commodity and the rightful prerogative of the rich.

Although the odd, ambitious, Vice Chancellor could see promotion in embracing Pyne’s elitist neo-liberal plan to privatise learning, there were few other takers. It was widely believed that Pyne was forced to write a book, about himself for his children lest they read for themselves, one day, unaided the truth about their father’s failures. Yet he is a survivor. A sequel, Christopher Pyne, A Man for All Seasons, must surely follow.

Disappointingly missing from the launch of the new era of mindless optimism, Australia’s own techno-Micawberism was a song and dance routine. Surely Kylie could be persuaded to reprise Locomotion with just one or two judicious edits?

‘Everyone is doing it … the Innovation! … c’mon … c’mon … do the Innovation! with me’.

Another Prime Minister, another Christopher Pyne is doubtless already working on the choreography. ‘Industry, Innovation! and science’ are conjoined uneasily in a threesome of convenience in the tyro minister’s full title but we all know it’s a meaningless title for a made up job to keep a recycled Pyne, a numbers man, in Turnbull’s pocket in case another coup is brewing.

Abbott will stay in politics by popular demand, he says, between snipes at his PM and his PM”s policies. Yet Mr Popularity brushes aside his need to discipline rogues. Even with the recent eight point downturn, he’s still up in the ego polls of preferred PM, as if it matters.

Turnbull is mobbed by his own cheer squad. Kate Carnell just loves him. Andrew Carnegie has a man crush. Orchestrated squeals of approval are heard from the hordes of ‘institutes’ and other ubiquitous lobby groups for the rich which will successfully block any real progress or innovation. Indeed, Australians have stagnation rather than innovation to look forward to in the words of the clear-eyed economist Satyajit Das.

‘What I’m seeing now in Australia is the same that I see in many Western democracies. Powerful lobby groups form and then they basically push their own agendas and, because they countervail each other, the whole system basically gets completely and totally stagnant and nothing happens.’

Turnbull’s Innovation! stimulus package unleashes a Pavlovian stampede as business classes clamour and elbow each other aside to snout the public trough, breaking only to preach small government or plead with government to cut funds from the poor and disadvantaged. An intoxicating scent of vast profits to be made wafts towards the feral animal spirits of the entrepreneurial classes like catnip from Canberra. This way if you want to make money!

Anyone who has any can lend their money at favourable rates and with less risk to ‘start-ups’ or new businesses. Rich white men step up. They are not slow to catch on to Malcolm’s spiel. Business, especially ‘small business’ as the motley, multifarious mob likes to style itself, can see that Innovation! is all about encouraging ‘start-ups’ or small business ventures. About them. And that’s all it is. Innovation! is not about new or original ideas. The country can’t afford any of that expensive, non-productive nonsense.

Kill-joy Opposition Leader, Bill Shorten, is duty-bound to remind anyone still listening to him that, ‘Since the 2013 election, the Abbott-Turnbull Government has cut $3 billion from innovation, science and research initiatives.’ Let Malcolm Turnbull insist at every turn that we are an agile and clever country, the evidence is otherwise.

Australia may rank number one in the world for how many years kids typically spend at school, but it is 77th when it comes to how many graduate with science and engineering degrees. Here Australia ranks below Azerbaijan, Mongolia and Guatemala and will continue to do so provided our innovation is confined to creating business incubators for the wealthy at the expense of expanded, improved access for all to education.

Let Turnbull make his announcement with the assistance of a funky horn-rimmed Pyne now reborn as guru of the Innovation! vibe. Well may they redeem bankruptcy and failure as yet another stage in learning. Pyne is destined to fail at his latest project just as surely as he flopped as Minister for Education. Unless, of course, he incurs collateral damage as Mal Brough digs himself out of the Ashby go-fetch-Slipper’s-diary scandal.

Australians are not deceived. They know that Prime Ministers and governments do not create innovative nations or economies by decree. They know that however attractive the tax breaks, a rash of investment in companies based on the software start-up model is no more a step towards greater national prosperity than it is a way to restructure our stalled economy.

Designed to reward his small business backers, presented as something it is clearly not, infected by the mania of the Silicon Valley start-up cult and heeding none of its limitations, Turnbull’s Innovation! Package is a breach of faith with the Australian people as much as a signal failure of his government’s political imagination and will to explore real reform. Still, with Kylie behind it, The Innovation! could really catch on.

‘Everyone is doing it … the Innovation! … c’mon … c’mon … do the Innovation! with me’.

David Tyler blogs at http://urbanwronski.com. He is a regular writer for The Tasmanian Times and has had work published on Independent Australia.

 

China illustrates the true meaning of Direct Action on climate

By Dr Anthony Horton

With 37 days to go until the Paris Climate Change conference in December, a report released by the Paulson Institute in Beijing on Friday October 23 outlined a plan to accelerate the economic and environmental improvement transition in the Beijing-Tianjin-Hebei region in China, which last year was home to 130 million people and accounted for 10% of China’s GDP.

In addition to industrial areas, modern urban centres and districts trying to resist urban sprawl and maintain their rural character, the region is also called home by the largest steel and iron manufacturers in China, and some of the most polluted cities in the world. The steel, coke and cement industries are the largest greenhouse gas emitters in China.

According to a story in the weekend edition of the China Daily newspaper (24/25 October) which discussed the highlights of the report, the region is well placed to transition on the basis of its good infrastructure and relatively easy access to wind and solar power.

Former US Treasury Secretary Henry Paulson stated in an interview on the release of the report that in his opinion the next Five Year Plan (commencing in 2016) will be very ambitious and widely acclaimed. Figuring out how to make the Plan a reality will represent the biggest challenge though, and transitioning from “dirty” to “clean” plants without stifling growth was achievable but will take some time. Paulson also highlighted the huge opportunities that such a transition presents for international companies based on the size of the market for environmental goods and services.

Deputy Director of the Beijing Municipal Commission of Development and Reform, Wang Jiahui commented that it was possible to control air pollution, given the emissions reduction campaign conducted during APEC China last year. She also stated that nineteen coal fired power plants in Tianjin will meet the emission standards that gas fired stations are required to meet by the end of this year.

Liu Bozheng, also a Deputy Director of the Beijing Municipal Commission of Development and Reform announced that 1200 high energy consumption and highly polluting companies will be closed by 2017 rather than relocated to other regions. Four significant thermoelectric centres have been closed in Beijing and numerous coal fired boilers have been converted to gas boilers. A number of energy efficiency measures have also been implemented in Beijing as part of revamping more than 40 million square metres of office space.

Rather than simply revitalising industries in decline, the report recommended that City officers should identify opportunities for new growth industries. With respect to Hebei, officers should prioritise policies that promote renewable energy, energy efficiency and have strong growth and job creation potential, according to the Paulson Institute report.

I read the China Daily story on the flight from Beijing to Perth on Sunday, and have to admit that it brought to mind many of the conversations I had over the week I was in China. I was invited to speak on the role of innovation in the environmental protection space at the China Mining Conference and Exhibition 2015 in Tianjin, and in addition to speaking to a range of people in my session, I also spoke to many others over the three days of the conference.

After reflecting on the conference and the few days I spent in Beijing before and after, I left China with four main impressions. Firstly, there is an appreciation of the scale of transition that is required. There is also an understanding that the Green Mining Standard (initially conceived by the Ministry of Land and Resources in 2007) and the Guidance to Implement the National Mineral Resource Program, Develop Green Mining and Construct a Green Mine issued in 2010 (which essentially established a defined Green Mining Standard) is flexible enough to accommodate new knowledge and innovative approaches.

The Green Mining Standard takes into account nine operational aspects-operating legally, good practices, the efficient use of resources, technological innovation, limiting releases of wastes, environmental protection, reclamation, a harmonious relationship with the community and a good culture within the company.

Third, there is a willingness to listen to adopt learnings from international mining settings, and lastly (but by no means least), there is an optimism regarding what can be achieved in the short, medium and long term.

I am also heartened by the singularity of the messages I heard from Governments and Mining companies in China with respect to the need to protect the environments in which mining takes place as well as nearby ecosystems (which are linked in some way to those mined areas) as far as practicable and the importance of clear legislation and policies which facilitate that protection.

rWdMeee6_peAbout the author: Anthony Horton holds a PhD in Environmental Science, a Bachelor of Environmental Science with Honours and a Diploma of Carbon Management. He has a track record of delivering customised solutions in Academia, Government, the Mining Industry and Consulting based on the latest wisdom and his scientific background and experience in Climate/Atmospheric Science and Air Quality. Anthony’s work has been published in internationally recognised scientific journals and presented at international and national conferences, and he is currently on the Editorial Board of the Journal Nature Environment and Pollution Technology. Anthony also blogs on his own site, The Climate Change Guy.

 

Has anything changed? Not judging by the comments.

While many Australians, and no doubt the rest of the world, are still breathing a collective sigh of relief at the deposal of Tony Abbott, his supporters are still smarting and licking their wounds. Abbott himself is still pretending to not wreck, not snipe and not undermine, by telling his supporters he could still have won the election, while those within Abbott’s camp have conveniently forgotten Abbott’s own overthrow of Turnbull not even a decade ago, albeit as leader of the opposition.

Malcolm Turnbull is by far more popular than Abbott. A jump in the polls after Turnbull ascended to the top is a pretty clear indication that Abbott as leader was the problem. Even a commitment to retain the most odious of Abbott’s policies has not dampened Turnbull’s popularity. Likewise, Andrew Hastie’s easy win in the Canning by-election after the coup was a good indication that the Coalition’s policies were not the problem for most people – the problem was Abbott.

Despite Turnbull now giving the Coalition a fighting, and likely, chance of winning the next election, Abbott’s supporters are still coming out hard. With the Liberal party effectively split in two for loyalty, diehard Lib fans continue to fiercely support Abbott’s legacy. As a result, they are reminding Australian’s of what the Coalition stands for, regardless of leader. Consequently, Australian’s cannot forget that the same party is in charge and nothing has really changed.

On Saturday, 3 October 2015, Malcolm Turnbull (or his staff) posted a rather innocuous photo and caption on his Facebook page, to which I replied. Some of the responses to my light-hearted comment serve as a reminder of the sheer ignorance and wilful deceit of the Coalition rhetoric and propaganda.

Turnbull’s initial Facebook post which prompted my comment was not remarkable. It was rather normal and not the slightest bit inflammatory. It hardly gave the impression of aiming to boost Turnbull’s standings in the polls, nor indicated a desperate attempt to show Turnbull leading the nation as a humble servant.

The post showed a photo of Turnbull with actor Chris Hemsworth, with the following words:

“Good to meet Chris Hemsworth today – talked about the contribution of the creative sector to our economy. But a bit weird he insisted on me calling him Thor“.

My comment, intended as a light-hearted comparison to what we had come to expect was:

“I can just imagine Tony Abbott’s caption to this photo, ‘Good to meet Chris Hemsworth today – talked about the contribution of the creative sector to our economy. He told me I could be a god just like him because of my superpowers stopping the boats’.”

This sparked an immediate tirade of misinformation, absurd assertions and a litany of personal abuse. Clearly critical thought and fact checking are not considered necessary for the diehard Liberal supporters.

The obvious response, and one of the most perpetuated lies of the Federal Government was that Abbott did indeed stop the boats.

“He did stop the boats as promised.

Granted, he stopped any boats landing on Australian shores, but he did not stop the boats. The Commonwealth has openly admitted that 20 boats were prevented from landing on Australian territory up until August 2015, and the Government has never refuted that it paid people smugglers to turn a boat around. If the boats had actually stopped there would be no need to turn them back.

Abbott cannot even claim credit for the massive reduction in boats leaving Indonesia: the credit belongs to Kevin Rudd II and his hard-line asylum seeker stance just before the 2013 election, where he declared no person arriving by boat would ever be resettled in Australia.

One response on the post demonstrated complete ignorance of Coalition policy and spending, saying:

“So you would rather pay for illegals than pay for what Australians need like bigger pensions better child care education etc etc. fix our own because no one else will, would or could!”

Ignoring the fact that it is not illegal to seek asylum, the Federal Government currently spends $1 billion a year on offshore detention. It also intends to cut pensions. Extra childcare funding is reliant on cutting family payments, leaving thousands of families worse off. New Treasurer, Scott Morrison has also announced that the Coalition is pushing for privatisation of health and education. It seems pretty obvious that the Government has a very clear intention to spend billions on arbitrary detention, and as little as possible on the Australian family.

Another poster astutely remarked:

“Eva is so far from the left she could probably fall over, let me guess your against offshore detention you probably believe in global warming. … I bet Eva is also against Christianity and private education.”

This disturbingly amusing ‘insult’ is a perfect example of the ignorance of the typical Coalition supporter. Apart from the billions of tax dollars currently used to arbitrarily detain asylum seekers and refugees, including young babies, it is laughable that someone would attempt to use the situation to cast aspersions on my character given the offshore detention regime supports rape, sexual assault, and physical abuse. A growing list of people are calling for the detention centres to be closed, on top of a Senate Committee inquiry recommending that children and families be immediately removed from Nauru.

Global warming, or climate change, is a pet hate of the Abbott supporter. With 97% of scientists agreeing that climate change is a serious issue, Australia has been criticised by a UN climate expert for its abysmally low greenhouse gas emissions targets. Despite Turnbull’s previous stance and criticism on the Coalition’s environmental policy, he has indicated an intention to retain Abbott’s laughable Direct Action. No doubt the Coalition supporters found Dutton’s recent shamefully embarrassing climate change ‘joke’ hilarious too.

It’s possible the curious comment on my alleged anti-Christian sentiment comes from the commenter’s observation of a satirical anti-radicalisation meme on my Facebook page: ‘Case Study: Jesus of Nazareth’. The meme describes Jesus as a ‘radical’ who left his loving family, was tempted by Satan, attempted to recruit followers, went against the Romans and the priests, and was ultimately hanged with thieves. Clearly the irony of this meme would be lost on most Coalition supporters, who would consider Karen, the alternative music loving, political activist, and environmentalist a genuine threat to their conservative, capitalist ideals.

Despite the overwhelming majority support of the Coalition and conservative politics within the mainstream media, Australians now source most of their news online, with a recent survey finding that 59% of people access news on their smartphones and 48% relying on Facebook. While there is no real evidence that the mainstream media in general has anything more than a ‘muted’ influence over an actual election outcome, the use of social media to access the news provides a new opportunity for all political stances and ideologies to share facts, lies, and opinions, whether informed or not.

A recent Nielson report found that approximately 13 million Australians (over 50% of the population) are active users of Facebook every month. The information also shows that on average, 60% of those that discover new information on Facebook will go on to learn more. Equal numbers of people reportedly use YouTube, with around a quarter of the population using WordPress.com and approximately 11% using Twitter.

With the rise of the use of social media, and the use of the same by the ill-informed, it is crucial that Australians who care about human rights, who believe in equality, and who deplore the dehumanisation of anyone other than white, middle-class, privileged Coalition party members and their friends, continue to speak out and demand accountability.

Turnbull’s new leadership will bring with it some changes, but not enough if Australia is to reach the standard expected of a Western democracy in the 21st Century. Abbott returned Australia to the 1950’s with his personal ideology, and medieval times in more than one policy. However, as Abbott so kindly pointed out, “Border protection policy the same, national security policy the same, economic policy the same, even same-sex marriage policy the same, and climate change policy the same. In fact, the rhetoric is the same…” under a Turnbull leadership.

Turnbull may be popular, but the Coalition remains the same.

 

Australia’s $234 billion climate gamble

By Dr Anthony Horton

As of last year, China and the US were first and third on the list of Australia’s trading partners. Australian trade with China was worth $152.53 billion-a total that has grown by 12.2% on average over the last 5 years. Australia’s trade with the US was worth $60.43 billion as of 2014, having grown 4% on average over the last 5 years.

In March this year, China raised a number of concerns regarding Australia’s Intended Nationally Determined Commitment (INDC) for greenhouse gas emissions in the lead up to the Paris Climate Summit in December. In particular, they queried whether replacing the planned Emissions Trading Scheme (ETS) and the Carbon Farming Initiative (CFI) with the Emissions Reduction Fund (ERF) will yield the reductions that were likely under those two. The US also queried whether the ERF will primarily replace the ETS or whether other Policies and Measures will be considered.

I discussed a number of issues regarding the ERF (the Flagship of the Australian Government Direct Action plan) and the first Auction in April this year in an earlier blog. The second Auction will be held on 4 and 5 November, which is approximately three and a half weeks prior to the Paris Summit. It is possible that news of the second Auction results will spread as widely and quickly as for the first, including to representatives of other nations attending the Summit. The representatives may be keen to quiz the Australian party on the results, particularly if the results are questioned as extensively in social media as the results of the first Auction were. This will be very interesting to watch indeed.

In the time since the first Auction, it is fair to say that a lot has transpired politically in an international and domestic context that highlights and brings into focus Australia’s stance on emissions reductions. In an international context, China and the US have progressed a deal on emissions reductions reached last November with discussions earlier this month, as a result of which many cities including Atlanta, Houston, New York, Beijing, Guangzhou and Zhenjiang have pledged new actions. A number of other nations have announced their INDCs in the lead up to Paris.

Last Friday (US time) Chinese President Xi Jinping announced a nationwide cap and trade emissions program as part of efforts to tackle climate change. Cap and trade programs cap the total emissions and sources including power stations and factories purchase and sell credits. In terms of the US, although plans for a nationwide cap and trade program were defeated in 2009, California and other north-eastern states have implemented emissions trading schemes.

Domestically, the Government has changed leadership resulting in the installation of Malcolm Turnbull as Prime Minister. Last week, in response to the announcement of China’s cap and trade program, Environment Minister Greg Hunt announced that the Government will stay the course regarding the ERF which is reported to be “the best, most effective scheme in the world”.

According to the Government, further reductions could be considered in 2017/18 as part of discussions on Australia’s 2030 target policy framework.

Given that China and the US (amongst others) have raised concerns with Australia’s commitment for Paris and have signed agreements to peak and reduce emissions respectively, I would be very surprised if they (and other nations attending the Paris Summit) would be prepared to give Australia until 2017/18 to consider further emissions reductions. I think it more likely that the US and China lead the charge in maintaining pressure on Australia to do more in the global challenge that is climate change.

Given the recent announcements by the Australian Government with respect to the state of the domestic economy and the discussions as to the exact nature of the problem, I struggle to fathom why they believe they can maintain one particular strategy and direction with respect to emissions reduction when an increasing number of countries are going in another.

If trade with China and the US continues on their current respective trajectories, by 2017, the combined figure is at approximately $233.7 billion (at a minimum)-$170.84 billion from China and $62.85 billion from the US. I don’t know if many Australians would be prepared to allow their Government to gamble such a figure on any matter-least of all emissions reduction specifically but climate change more generally, especially given the global nature of today’s economy. This is effectively what they are doing by continuing to ignore the rising tide of emissions trading.

This article was originally published on The Climate Change Guy.

rWdMeee6_peAbout the author: Anthony Horton holds a PhD in Environmental Science, a Bachelor of Environmental Science with Honours and a Diploma of Carbon Management. He has a track record of delivering customised solutions in Academia, Government, the Mining Industry and Consulting based on the latest wisdom and his scientific background and experience in Climate/Atmospheric Science and Air Quality. Anthony’s work has been published in internationally recognised scientific journals and presented at international and national conferences, and he is currently on the Editorial Board of the Journal Nature Environment and Pollution Technology. Anthony also blogs on his own site, The Climate Change Guy.

 

 

Labor’s Asylum Seeker Policy Should Be A Seven Point Star!

“I’m not in favour of changing the flag, I’ve got to say. Although I have to say that if the Commonwealth star was to be a 7-pointed star rather than a 6-pointed star, that’s hardly a massive change. I would say that that is an evolution rather than a revolution.”

Tony Abbott on the Northern Territory becoming a state.

OK, as I’m sure most of you know – and if you didn’t it’s probably been pointed out by several of those lefties who just pounce on every mistake that Tony makes – our flag already has a seven point star. Honestly, you’d think that people had better things to do than laugh at the Liberals every time one of them puts their foot in their mouth, then shoots themselves in the foot, luckily missing their brain. At the very least, you would have thought that those commenting on Tony’s mistakes would have given up through sheer exhaustion.

Personally, I think that there’s something in Tony’s “star” comment for Labor. They need to stop presenting alternatives and just argue that what they’re doing is hardly a radical change. After all, Tony Abbott is so unpopular – thanks to all those who laugh at him just because he’s reality challenged – that if the Labor Party can just keep Bill Shorten out of sight apart from when he makes an announcement like a fifty percent renewable target, they should romp in the next election by about thirty seats.

In practice, this would mean instead of talking about an emissions trading scheme, which the Liberals would argue is a carbon tax by another name, Labor should just announce that it’s increasing the GST, but only on carbon, which is really “an evolution rather than a revolution” and don’t we already have a GST, which John Howard said was his star achievement, apart from his daughter marrying his doppelganger? So it’s hardly a “big new tax” it’s just an extra point on the star of the GST.

As for as an asylum seeker policy goes, well, rather than having a big public argument, Labor should just announce that they’ll be doing all they can to stop boats arriving and people drowning at sea, and when asked whether that includes boat turn-backs, the response should simply be: “It’s been a long-standing bipartisan policy not to comment on operation matters.” Then, when in government, they could do what they like with boat arrivals. Turn them back, send them to Malaysia, create a regional processing centre for new arrivals in some undisclosed location, give them all helicopter rides back and forth to Geelong, whatever. They simply needn’t tell us!

If pressed while still in Opposition, Labor could simply say that they’re refering all comment about “on-water matters” to the weekly press conference held by Scott Morrison to keep us informed. If a member of the press should dare to point out that Scott Morrison stopped holding weekly press conferences shortly after telling everybody that he’d only be making comments at his weekly press conference, and, besides, Morrison is no longer Minister for Immigration, Labor’d have the option of asking, “Are you suggesting that’s why that boat penetrated our immigration zone – because Dutton’s not up to the job?” Again, after the winning the election, when Dutton’s no longer Immigration Minister, they could suggest that it’s not policy to comment on who is, or who isn’t Immigration Minister as it’s an operational matter and revealing such information could be an even bigger help to people smugglers than paying them to not pollute.

Oh wait, that’s the Climate Change Directionless Act policy that the Liberals had; not the pay people smugglers to take the boats back policy which they may – or may not – have had…

Anyway, my advice to Labor is to adopt the seven point star strategy, and now that the Clifton Hill branch has taken my advice by asking Bronwyn Bishop to speak*, I’m hoping to be taken on as a paid strategist. Or at the very least, the Liberals could adopt their Direct Action Strategy and pay me to stop writing.

Yes, like Tony, sometimes I just don’t see the point!

*The other day I wrote:

Mm, I wonder if she’d be prepared to go and speak at a Labor Party fundraiser if she were asked. After all, she is meant to be non-partisan and she did say that she went to Geelong in her capacity as speaker. There ya go, Bill. Don’t move a motion of no confidence. Issue her with an invitation… See if that gets you thrown out of Parliament; I’m sure that she’s trying reach 400 Labor ejections before September.

Yes, while it’s only the Clifton Hill Branch that seems to have taken up my suggestion, I feel that Bishop’s office should be flooded with requests for her to speak at fundraisers, just to give her the chance to show that she certainly wasn’t playing favourites by only speaking a Liberal functions.

 

Words are cheap, but Direct Action sure isn’t.

In an interview on Lateline in October last year, Greg Hunt said that the carbon price “doesn’t work”, “doesn’t do the job” and is “a just hopeless means of achieving the outcome.”

In defending his move to disband the Climate Change Commission, the Climate Change Authority, the Energy Security Fund, the Clean Energy Finance Corporation and ARENA, Hunt said

“At the governmental level, the primary scientific agency is the Bureau of Meteorology. 1,700 staff. I spoke with the director of the Bureau this evening and invited them to provide a scientific briefing, reaffirmed a complete commitment to their independence, to their original research and to the extraordinary capacity that they give to Australia to look at meteorological questions and broader global questions.

The Bureau is the originating scientific agency for meteorological matters in Australia for matters relating to climate and matters relating to climate science. The CSIRO also backs those up. So, they are strong, deep, independent scientific agencies whose independence isn’t just guaranteed under us, but is welcomed.”

He then proceeded to cut $10 million from the BoM, with an anticipated loss of 80 jobs next year, and he cut CSIRO’s funding by $111 million over four years, which will result in 500 job cuts at the nation’s peak scientific organisation.

Hunt went on to say

“we have bipartisan support for the science. We have bipartisan support for the targets. The disagreement is about the carbon tax and the mechanism because emissions go up, not down under the carbon tax and because it does enormous damage to our cost of living and our economy by being an electricity tax. In short, it doesn’t work, but it does do damage.”

Figures released last week revealed that the annual growth of cost of living for all households slowed over the past three months (employee and age pensioner households increased by just 1.9%), largely due to the end of the carbon price in June.

But as Greg Jericho points out, any broadening of the GST base to include food, or an interest rate rise, or fuel indexation, will quickly wipe out any gains made by removing the carbon tax which was only slated to run for another year with a fixed price.

While the cost of living increase may have slowed, two new studies show that brown coal and black coal generation has jumped sharply in the four months since the carbon price was dumped by the Abbott government. The share of coal has gone up from 69.6% of sent out electricity in June to 76.4% in October.

And emissions have also jumped sharply, with one study from the Melbourne Energy Institute saying “emissions intensity’ has already jumped an “unprecedented” 10 per cent, and another saying that Australia’s aggregate emissions could rise more than 10 per cent over the year, after falling nearly that much while the carbon price was in place.

Danny Price, from Frontier Economics who helped the Government develop its direct action plan, was also interviewed on Lateline in November last year.

He insisted that penalties for industries that increase their emissions is a crucial part of the plan.

“The direction action policy has always had a penalty included in it. It’s been a consistent feature of direct action from the very first document, that’s been put out on direct action.

The Government, of course, hasn’t yet put anything out about how the penalties will work or the baselines will work which will be a challenge for the Government and they’re the two, you know, most difficult issues for the Government to deal with. But I guess we’ll get to see what the form of the penalty is going to be.”

But not for a while. Nick Xenophon insisted on a safeguards mechanism that will be negotiated in the next 12 months that will determine how tight emissions limits will be and the penalties for exceeding them.  Strangely, the emissions reduction fund auctions will apparently begin before the baselines are determined.

“I can announce this today, that the first auctions under the Emissions Reduction Fund, after having spoken to the Clean Energy Regulator on Friday, will be held in the first quarter of next year,” Mr Hunt said on Sunday.

When asked how much Direct Action would cost to achieve the 5% reduction target by 2020, Mr Price, who is the government’s expert on this, said

“Well, I don’t know yet because it will depend very much on where the Government sets the baselines, the nature of the penalties that are applied, but in the order of between $7 billion to $10 billion but probably on the lower end of that range.

The now Government, but then Opposition, had said initially that they had funds available for up to $10.5 billion till 2020. My understanding is that there are funds beyond the forward estimates. And that would be the extra $4.5 billion plus the 2.55 would be very consistent with what I’ve just said I think the costs are likely to be.”

The budget text states that the government will provide an “initial” $2.55 billion to establish the Emissions Reduction Fund, which is consistent with what the Coalition had promised prior to the election over the first four years of the scheme.

Yet the table which accompanies this text listing the hard dollars provides a contradictory and highly confusing story. It outlines a total funding allocation over the next four years of just under $1.15 billion.

A spokesperson for Greg Hunt said that the Clean Energy Regulator is free to at least commit to abatement purchasing contracts up to $2.55 billion over the next four years. However, they expect that because the regulator will only pay for abatement once it is delivered, the expenditure of the $2.55 billion will be spaced out over a period beyond the forward estimates period to 2017-18.

Market analysts Reputex suggest the $2.5 billion fund may get Australia about a third of the way to our low 5% target, but not much more.

Price stressed that Direct Action requires investors who, in turn, need certainty about legislation and regulation.

“this has to be a policy orientated towards investors and I just can’t see that investors are going to invest in a scheme [carbon pricing] where the Government can and will change the price to suit the politics and it could render their investments completely stranded, redundant.”

I wonder how he feels about the Coalition’s backflip on the Renewable Energy Target leading to the decimation of the renewable energy industry and the loss of billions of dollars investment that would have contributed towards meeting our emission reduction target whilst creating new jobs.

Greg Hunt told Emma Alberici

“I’m the Environment Minister and my job is to make sure that we do two things: that we understand the challenge and we respond to the challenge. And then the third thing which goes beyond that is to make sure that our actions are sensible and prudent and real.”

Hunt said on Monday that cleaning up existing power stations was the “the best thing” thing the government could do to reduce emissions, and pointed to the CSIRO’s direct injection carbon engine (DICE) technology as a way to reduce emissions from brown coal.

But, as pointed out in Crikey, rather than being a “major CSIRO research project”, there is a small team of two to four well-intentioned scientists and engineers working out of the CSIRO’s energy labs in Newcastle, running a 4-litre, single-cylinder diesel engine on coal, on a shoestring budget, struggling to find industry partners. The technology is drastically underfunded, unavailable at scale, and has a colourful history of unsuccessful research sponsored for very many years by miner Travers Duncan who has been part of the ICAC investigation into White Coal and Eddie Obeid.  Any significant commercial roll-out is decades away.

Hunt should also know that the recent apparent breakthrough in capture and storage of coal emissions – the Canadian Boundary Dam Project – was hideously expensive. They spent $US1.24 billion to retrofit an existing power station to produce 110 megawatts of power to the grid. Assuming 80 per cent utilisation that’s more than $US14 million per effective megawatt, and you’ve got fuel costs on top of that.

By comparison a wind farm assuming 40 per cent utilisation (what newly constructed wind farms in Australia can achieve) comes in at $US5 million or so per effective megawatt with no fuel cost. Also, it can be built in one year instead of four or five, with that saving in construction time adding up to lot of avoided bank loan interest which weighs on the clean coal project.

In the budget the government cut $459.3m over three years from its carbon capture and storage flagship program, leaving $191.7m to continue existing projects for the next seven years, so one wonders just how serious they are about it.

If the government sticks to its suggested (but not confirmed) budget of $4.95 billion up to 2020, they can only afford to spend an average of $11.75 per tonne of CO2. At that price they may achieve a few million tonnes of abatement, but leading carbon market analysts and brokers including Bloomberg New Energy Finance, SKM-MMA and RepuTex suggest that the government has Buckley’s chance of reaching its target of 421 million tonnes with the allocated budget.

At the start of his prime ministership Tony Abbott said, “We hope to be judged by what we have done rather than by what we have said we would do.”

Rest assured Tony, the whole world is judging these actions.

carbon tax repeal

 

 

 

 

 

Axing the taxes equates to self harm

I am trying to understand why we are repealing the carbon and mining taxes.

“The carbon tax is a $7.6 billion dollar hit on the economy. As you (the Minerals Council of Australia) noted in your submission to the Emissions Reduction Fund Green Paper, the burden on the minerals sector alone is estimated to be $2.6 billion by 30 June 2014.

There is no reason for the repeal to be delayed – the carbon tax is hurting Australian families and businesses and from 1 July is estimated to cost them $21 million per day.”

This is the spin from Greg Hunt.  They just love to say this is costing “a big scary number”.  When he says the carbon tax is a hit on the economy, he means it is a hit on polluters.  They are the ones who pay the carbon tax.  The fact that they passed on any imposte to the consumer is a failing in the legislation if you ask me.

And excuse me if I don’t think $2.6 billion very relevant in comparison to the superprofits that mining companies are making digging up OUR resources.

Why we are protecting profitable mining companies at the expense of families and small business is beyond me and seems contrary to the Coalition rhetoric.

The tax free threshold was set to increase to $19,400.  For low income earners, that would save $228 per year and it would mean those who earn between $18,200 and $19,400 would no longer have to fill in a tax return.  The repeal of the carbon tax will scrap this.

Low income earners will also lose the low income superannuation contribution scheme, which pays $500 to low-income individuals to boost inadequate retirement savings.

A family with three children, one at primary school and two in high school, and where both adults earn just above the minimum wage of $37,000, would lose $2050 from the abolition of the Schoolkids Bonus, according to the Australian Institute.

It is questionable as to whether this was even attached to the mining tax as it was actually introduced to replace a previous payment that was being underutilised –  the Education Tax Refund.

The government will also delay (scrap?) the move of the Superannuation Guarantee to 12%.  This will affect the retirement savings of all employees which, with the proposed increase in the retirement age to 70, and the lowering of indexation to pensions, seems a counterproductive move.

They are also scrapping the Income Support Bonus, which includes payments to the children of veterans and is a lump-sum supplementary payment made twice a year to people on certain income support payments.

They are hurting small business by unwinding the instant asset write-off. This policy allowed small businesses to write off depreciating assets costing less than $6,500, and the first $5,000 was offset against the mining tax.

They are also discontinuing the company loss carry-back, a benefit for small businesses, and dismantling the accelerated depreciation for motor vehicles.

And of course, we have to attack renewable energy.  Existing income tax law provides an immediate tax deduction for expenditure incurred when exploring or prospecting for minerals, petroleum or quarry minerals.  In 2012 this was extended to geothermal exploration.  They are cutting the deduction for geothermal but not for the hydrocarbons.

Add to all these cutbacks the cost of Direct Action should it pass the Senate.  I was going to work out the individual cost but Hockey’s budget says one thing in the text and another in the figures as pointed out in Business Spectator.

“The budget text states that the government will provide an “initial” $2.55 billion to establish the Emissions Reduction Fund, which is consistent with what the Coalition had promised prior to the election over the first four years of the scheme.

Yet the table which accompanies this text listing the hard dollars provides a contradictory and highly confusing story. It outlines a total funding allocation over the next four years of just under $1.15 billion.”

So who can tell?  I think we all are coming to realise this will never happen at any meaningful level.

As for the mining tax, that is also very confusing with the Coalition arguing so many different views depending on what we are talking about.

They say the mining tax has hurt investment while boasting “As Minister for the Environment, I have approved more than $500 billion worth of new projects in the mining and resources sector.”

They say the mining tax has cost jobs but everyone agrees that we are moving from an investment phase to a less labour-intensive production phase.  This shift is causing a loss of jobs but it would see an increase in revenue.

So what do we do?  Accept the inevitable job losses and forego between $3.4 billion (budget) and $4.4 billion (PEFO) projected revenue over the forward estimates.  We also increase the 457 visa intake and decrease the oversight of it so mining companies can have a fluid malleable workforce.

I cannot understand why anyone other than high polluting miners and their high falutin’ sidekicks would think that axing these two taxes is in anyway good for the country.

Solving the real problems

 

We have a budget problem.

It’s not a budget emergency. Everyone agrees about that… at least, everyone who understands about national finance and economics, which is unfortunately only a minority of the voting public, and none of the current Coalition government to hear them tell it.

By current standards, by any measures you care to name, Australia is currently doing very well compared to every other nation in the G20. Taking all of the various factors together, it’s impossible to deny that Australia is in the best economic state in the world.

The justification for immediate, sweeping, deep cuts to government expenditure is looking pretty shaky.

With that said, it is prudent for us to realise that Australia does face some severe fiscal challenges in the coming decades. Some of these are the result of demographics. Some are historical, and some are being wilfully ignored or exacerbated by the Coalition government’s policies.

As many commentators have argued, the problem with Australia’s economy is not currently on the spending side of the ledger; despite the Coalition’s rhetoric of “profligate spending”, government expenditure increase was slower under Labor than the previous Howard government. Rather, the challenge is with the decline in revenue. This decline is not going to be fixed by a short-term “deficit levy”. The decline is driven by demographic change as the large baby-boomer demographic leaves the ranks of the taxpayers and is replaced by smaller cohorts of Generation Y and Z. Simply put, we’re an ageing population and that leads to declines in tax revenue. Revenue is further driven down by reductions in the terms of trade for coal, iron and other exports, as international economies both encounter financial headwinds of their own, and bring competing sources of these resources online. And depressed spending in the domestic market, particularly in big-ticket areas such as housing, has been driven by the “near-miss” that was the GFC. When the Australian population saves, there is less money in circulation for the government to take in tax.

The future is looking even more bleak. The already declining revenues from coal and fossil fuels, for so long a mainstay of the Australian economy, are likely to collapse with the increasing push towards renewables and international concern about climate disruption. The brand-new 2014 National Climate Assessment in the US is just the most recent in a long succession of dire reports to the world’s largest economy, and the boulder is
slowly but inexorably starting its downhill roll. As climatic disasters continue to reinforce the immediacy of climate disruption, and as economies like America adopt increasingly stringent carbon-abatement policies, the demand for Australia’s coal and gas is likely to dry up. Many fossil fuel oligarchs are likely to go the wall, a fact that will not provoke a lot of tears, but it’s likely to take Australia’s budget position with it.

An ageing population is one with decreasing health, so just as people drop out of the workforce and stop contributing tax, they start requiring more medical attention and putting more weight onto the healthcare system as well as pensions. Multiple reports are clear that on the current trajectory, over the coming decades the share of government expenditure that social security and healthcare will encompass will increase substantially and unsustainably. Left unchecked, this is the budget emergency of tomorrow.

One final brick in the wall up against which is Australia, is the decline of the manufacturing industry. Whether it’s cars or fruit or sneakers, the past decade has seen a constant flow of manufacturing businesses, large and small, leaving Australia for sunnier climes. This is not driven by a lack of capability or resources, which Australia has in plentiful supply, but rather through things that Australians value, such as a decent working wage and appropriate employment conditions including leave and penalty rates. There is only so much that Australian governments can do to reduce administration costs and provide tax breaks to encourage businesses to set up here or remain, and so long as we live in a globalising world with logistics chains that can get goods to the shelves regardless of being produced in Geelong or Kuala Lumpur, all other things being equal companies have little incentive to stay. This contributes to a loss of manufacturing potential and an over-reliance on the mining and minerals sector, and puts Australia at even greater risk. The next two decades will be critical. Employment ministers like to talk up Australia’s other growth area of employment, the services sector, but there’s a limit to how many service jobs an economy can support if there’s nothing being actually manufactured.

To its credit, Labor is aware of the challenges ahead and had productive policies in place over their past two terms of government, and in their election policies in 2013, despite a growing populism and desperation in the face of Tony Abbott’s attacks. Unfortunately Labor has proven to be absolutely inept at message management and communication to the electorate, resulting in the Coalition defining the terms of discussion for every area of policy debate. This resulted, too often, in Labor watering down its message or arguing on the Coalition’s ground, rather than making the case for their own vision.

There are no simple or foolproof solutions to these problems; after all, Australia exists in competition with a myriad of other nation-states who would love nothing better than to see us fail if only to bolster their own chances of success. There are, however, strategies and approaches that can be taken to address the issues, and it is my belief that Labor, at least until the last year of its term of government, had decent and well-considered approaches to these oncoming difficulties. It was just a pity that they were not able to clearly explain their policies in terms of the problems and their intended solutions.

Take for example healthcare. Labor recognised the burgeoning costs of healthcare for an ageing population early on its first term. Kevin Rudd’s grand plan for a revised health compact with the States combined an increase in the role of the Federal government in return for more funding, a new method of costing hospital procedures to standardise and optimise costs and processes, and a range of measures intended to increase pre-clinical healthcare. Throughout its two terms, Labor instituted GP Super Clinics to relieve the pressure from hospital emergency departments and to improve chronic and preventative healthcare. These same super clinics are now under threat from Tony Abbott’s oncoming budget of scalpels.

Improving overall health via preventative care, relieving hospital pressures by increasing the availability and ubiquity of medical care and standardising and optimising costs would not, in and of themselves, solve the healthcare problems Australia faces into the future, but they are a determined approach and a good start. By contrast, the Coalition does not believe in centralisation or group operation, feeling that competition and the holy dollar give the best results. The Coalition does not believe in federal involvement in healthcare beyond what is necessary. The Coalition does not believe in providing government assistance to those in need of healthcare, preferring instead to encourage further involvement of private health in Australia’s healthcare system. This does not address the nation’s healthcare funding problem; it simply shifts the burden onto ordinary people.

Or you can look at manufacturing. Labor’s approach to Australia’s two-speed economy was best encapsulated by the MRRT (Minerals Resource Rent Tax) and its preceding RSPT (Resources Super Profit Tax). Labor intended to marginally increase the amount of tax revenue gained from those resources companies with unfeasibly large profits and pour the resulting funds into support and resources for businesses in other sectors of Australia’s economy. A true case of “all boats will rise”, Labor intended to lower the company tax rate across the board, a move that would have been particularly of benefit to small businesses and retailers across the country. The mining tax would not apply to resource businesses in their normal course of operations; no extra tax would be taken during investment and building of a mine, nor even during moderate production. But when a company got into windfall territory, rapidly depleting a source of minerals and making huge short-term profits, the government felt that the Australian economy should get an extra cut. The philosophical merits of placing an extra tax burden on companies that already paid taxes may be debated; the politics of imposing this ‘levy’, as we now know, turned exceptionally poisonous. (Incidentally, the RSPT and MRRT were intended to replace royalties, so all claims that ‘they already pay royalties to the States’ are furphies.) But it was an attempt, successful or not, to take the benefits of a short term economic boom on the back of mining and use them to strengthen Australia’s performance in other areas of the economy.

Except that the Coalition and the resource oligarchs together conspired to corrupt the public discussion. The average Australian, by the time of the 2013 election, probably thought that the MRRT was going to push prospective mining projects out of Australia and cost thousands of jobs. The truth, of course, is that mining employs a mere fraction of the workforce (and far less than manufacturing and retail), that no companies have realistically been driven from our shores by a tax specifically intended only to be levied when a company was doing excellently, and that the mining companies had won a range of concessions about the methodology of valuing assets that depressed the overall take of the tax in any case. In a world environment where resource prices are declining and the Australian mining boom is largely over, the MRRT has been a disappointment in terms of revenue raised, and whilst it might have been more successful in the latter half of the 2010s as mining companies moved from building phases into full operation, the Coalition is very likely to be able to dismantle the MRRT before it reaches any kind of real success.

Taking even a decent amount of super profits tax from the big miners and using it to reduce operating costs for all businesses across the country would not, in and of itself, solve the problems facing Australia’s manufacturing sector. But it was a good start and a valid approach. The Coalition’s alternative approach of continuing to subsidise and promote Australia’s resource industries will have marginal short term benefits to revenue at the expense of Australia’s ability to transition away from resources into more sustainable and modern forms of production.

On the front of climate disruption, an emissions trading scheme is widely regarded by environmentalists and economists alike to be the best approach to the problem. Labor’s ETS has its detractors, but in this as in so many other areas of Labor policy, the message has been lost in the noise. It is certainly fair to say that even were an ETS to reduce the nation’s carbon footprint to zero it would make minimal impact on the world’s climate. It is definitely true that trading schemes have been gamed in some jurisdictions, that corruption can ensue, and that some people are liable to make a lot of money. It is even fair to say that during the short life of Australia’s ETS, there has been little to no measurable impact on the country’s climate. These objections ignore the bigger picture: that participating in an effective carbon trading scheme would assist Australia to meet its climate commitments and would position Australia to participate in global carbon trading markets without fear of sanctions and tariffs; that the revenues raised from the carbon trading scheme would be ploughed back into successful research and development programs in renewable energy and other carbon-abatement technologies, thus increasing the country’s export markets, renewable energy business and employment, and technological expertise; and that by leading the way for the world, we improved Australia’s standing and encouraged other nations to improve their carbon footprints as well.

By contrast, the Coalition does not appear to believe in climate change/disruption. They are seeking to dismantle a market mechanism to address this global problem, in the process removing Australia’s ability to participate in growing international carbon markets and making us a pariah amongst other nations. They have already dissolved bodies whose remit was to provide impartial and scientific advice on this issue, and are seeking to remove the revenue-generating successful Clean Energy Finance Corporation. In place of these approaches the Coalition is promoting its fig-leaf policy of Direct Action, which has been definitively shown to be incapable of meeting Australia’s stated environment goals, let alone the significantly increased goals that would be required to keep Australia on an even footing with other nations.

Labor’s ETS would not, in and of itself, save the planet from anthropogenic global warming, but it’s the ideal and almost universally respected approach, with many benefits for Australia’s economy and environment, at minimal cost. The best that can be said for the Coalition’s approach is that Direct Action might possibly be of some benefit, but it’s certainly neither the most effective nor efficient method.

On all three of these confronting issues, Labor had successful or worthy policy approaches. Whatever can be said about Labor’s ability to deliver on its policies (either through poor planning or the incapability of the public service), and putting aside the well-publicised leadership contentions, Labor’s main weakness was its inability to get across the message of its approach to these problems. On all three of these issues, judging by policies taken to the election and recent media speculation, our current Coalition government would appear to be taking Australia in exactly the wrong direction. With the Coalition’s first budget mere days away, we will soon see if the government has any valid approaches to these issues beyond the slash-and-burn approach already adopted, but the signs are not looking promising when Tony Abbott and his team will not even be honest about the problems we face. This insistence on a “budget emergency” is a farce and the Coalition’s determined intent to preserve the status quo is not the way to head off the economic emergency that is really oncoming. But of course politics is cyclical, and it’s likely that Labor will be in power by the time these problems become too big to ignore.

The truth about the ‘carbon tax’

Image by abc.net.au

Image by abc.net.au

Firstly, let’s remember that from June 2007 to December 2012, before the introduction of carbon pricing, average electricity prices rose by 70 per cent, so the big hike we all endured had nothing to do with action on climate change. A 2012 report by the Productivity Commission found network services, or poles and wires, to be the single most costly component of electricity supply accounting for around 45 per cent of total electricity prices from 2007-2012.

Next, let’s get the terminology straight. We have a fixed price emissions trading scheme which was slated to move to a floating price in 2015 under Gillard, moved forward to 2014 under Rudd. This means that our current system has two months to run, after which time we were going to align with the EU market which is estimated to move to about $9 per tonne this year, a significant reduction from our current carbon price.

Abbott said “the average power bill will be $200 a year lower and the average gas bill will be $70 a year lower.” He went on to say the average family would be $550 a year better off with the rest of the saving supposed to come from a general reduction in prices of goods and services passed on by other businesses, many of whom claim they had not increased prices because of carbon pricing and would therefore be unable to reduce prices.

The Queensland Competition Authority’s report estimates that, if the carbon tax is repealed, the average electricity user can expect their bill to increase by 5.4 per cent, or about $76.  This is less than if the carbon price remained, but prices will increase not decrease nevertheless.

Gas prices in the eastern market – Queensland, NSW, Victoria, South Australia, ACT and Tasmania – are projected to rise sharply in the coming years as exports and demand for domestic consumption increase.

Energy Australia said it is important for the government and community “to be aware there is no guarantee that final energy prices will move proportionately with the average carbon price reduction in wholesale energy market”.

AGL Energy says that it usually needs a lead time of months to make price changes, and that “non-carbon” factors will drive prices after July 1 this year.

A joint submission by power and gas companies cast doubt on Tony Abbott’s promised price cuts of 9 per cent for electricity and 7 per cent for gas from the abolition of the carbon tax warning “it is difficult to specify exactly how much electricity prices will fall once the carbon price is repealed”.

The submission argues the carbon price impacts vary by region, by supplier, by retailer and in many cases by individual contract. The carbon tax applies to the cost of electricity generation where fossil fuels are burned, which represents about 30 per cent of the electricity price. Network charges for transmission represent a “significant portion” of retail prices and these could rise on July 1, except in Victoria, and this will have an impact on electricity prices that may reduce any cuts associated with carbon tax repeal. In Western Australia and the Northern Territory the electricity price is determined directly by the government, so regulatory changes will take time to implement.

So when Abbott, Hockey and Corman tell us we will be $550 a year better off they are talking crap, plain and simple. They use a price that won’t apply after July 1 and ignore industry advice that prices will not go down. Even if we didn’t move to a floating price until 2015, any supposed savings would only be for one year.

Instead of collecting about $13 billion in revenue from polluters over the next four years we will be paying over $3 billion of taxpayers’ money to polluters. As Mr Abbott has chosen to keep the compensation package, this means over $16 billion difference to government coffers, or about $450 per household per year. Add to that the fact that every single expert has said Direct Action will not achieve our targets without a far greater expense if at all, and we will patently be much worse off financially and environmentally.

Frank Jotzo, Director of the Centre for Climate Economics and Policy at the ANU Crawford School of Public Policy, believes we should keep the fixed price on carbon.

“If it wasn’t for the poisonous politics of the “carbon tax”, the best option would be to stick with the gradually increasing fixed price, and keep it for longer. The effect on cost of living from the $23 carbon price has been minor, and most households are better off financially because of income tax cuts and welfare increases.

Impacts on industrial competitiveness have been negligible. Keeping the fixed price would cause no further impacts. The carbon price immediately reduced emissions from the power system, because it made some of the dirtiest electricity plants too expensive to operate. Lowering the price could undo many of the gains, bringing old clunkers online once again.”

The fact that companies are still announcing closures, even with the promised repeal of the carbon tax, shows how small a factor it plays.

Global investment in renewable energy dropped 11% in 2013, according to EY’s latest quarterly Renewable energy country attractiveness index (RECAI), with policy uncertainty in particular reducing investor appetite across many markets.

China closed the gap on the US at the top of the index, installing a record-breaking 12GW of solar capacity in 2013 and ramping up its consolidation effort to accelerate market recovery.

Germany remains in third place, but lost ground following the announcement of subsidy cuts and watered-down renewables targets by the new coalition government. Rapid solar market growth and a burgeoning offshore sector helped Japan to replace the UK in fourth place.

Ambitious targets and a series of large-scale project announcements have seen India jump to seventh place. Competitive bidding trendsetters Brazil and South Africa have also risen in the index thanks to a plethora of new projects awarded in 2013 auctions.

Australia has dropped from sixth to eighth spot in the rankings, off the back of the expected repeal of the carbon tax and review of the Renewable Energy Target (RET) creating an uncertain investment environment, particularly in regard to large scale renewable energy, EY said.

Australia’s largest renewable energy company, Hydro Tasmania, has posted a record $238 million operating profit. The state-owned power generator says it made $70 million from the carbon tax, exporting record amount of clean power to mainland Australia. The company was able to pay a $116 million dividend to the State Government. This will be jeopardised if carbon pricing is removed.

Nathan Fabian, head of the Investor Group on Climate Change, told the Senate Committee looking into Direct Action:

“My members are looking at the United Kingdom, Ireland, the United States, France and some South American countries as having more stable investment environments for low-carbon opportunities. Direct action is not an investment grade policy.”

Tim Buckley, from the US-based Institute for Energy Economics and Financial Analysis, told the same hearing that Australia was missing out on hundreds of billions of dollars being invested every year in renewables, in energy efficiency and in development of these new technologies, and the hundreds of thousands of jobs being created in China, Germany and in America.

When the economists agree with the scientists it is surely time to start thinking well this is the way to go, or should we decide what’s best on the basis of talk-back radio hosts and polls printed in the Telegraph.

So to sum up, removing the carbon price will not lower your bills, nor will it save businesses. Direct Action will not lower emissions. Uncertainty about the renewable energy target is costing us investment in a growing industry of the future and the jobs that go with it. And we are now seen internationally as lightweights, easy prey to corporate greed and unwilling to share the global burden of action on climate change.

Oh and just a heads up on a potential new rort – You may now become a “Service Provider” with the government’s Green Army romp. You can submit a tender for as many projects as you like and you will be paid $192,500 per project, $22,500 for administration, and provided with a workforce that you pay between $10.14 and $16.45 per hour with no superannuation. How many employers will decide it’s far cheaper to be a “Service Provider”?

What’s there to crow about?

Image by imgur.com

Image by imgur.com

Tony Abbott is gleefully crowing about “100+ days without a boat”. What Mr Abbott seems oblivious to is that he has closed yet another door on people fleeing persecution and human rights abuses in places like Myanmar and Sri Lanka. The Taliban just fired rockets at the Electoral Office in Afghanistan so the upcoming election doesn’t look like it will make everything tickety poo over there either. Things don’t seem to be getting any better in Syria though the government haven’t done any mass gassings lately, not in the open anyway.

And it isn’t as if we have increased our humanitarian intake or processed any of the people already being illegally held in detention. This has cost us a fortune, subjected our navy to allegations of abuse, seen us internationally condemned, caused enormous mental and physical harm to vulnerable people, and Australian guards are now implicated in the death of a man who was under their protection. Yet this is supposed to be a success?

Tony’s team are also pushing very hard for the repeal of the carbon tax but it is becoming harder and harder to drown out the chorus of condemnation for such an act from world leaders, the UN, climate change bodies, scientists, economists and the citizens of the world. He accused the executive secretary of the UN Framework Convention on Climate Change, Christiana Figueres, of “talking through her hat”, and said he doesn’t want to “clutter up” the G20 agenda with talk about climate change. Can you imagine how that was received?

Blatantly sacking scientists and advisory bodies to appoint climate change deniers to every position might allow you to fool people in Australia in the very short term. It will not change the science. This headless chicken (Prince Charles) flat earth (Barak Obama) denial is wasting precious time and shows us globally as unwilling to do our bit – something Australians have always been respected for in the past.

The Senate inquiry into the Direct Action Plan has released its findings and they are damning. If this process is to have any credibility, the Coalition must drop this idea and agree to move to an ETS with higher targets for emission reduction and renewable energy. It is what every expert recommends, especially the economists.

Greg Hunt must be the only Minister for the Environment who would be bragging about approving billions of dollars of new coal mining and port expansion which will unquestionably lead to the degradation of one of the world’s greatest natural wonders. He has also advocated the removal of marine park legislation to allow for commercial fishing, removal of world heritage listing to allow for logging, and the building of dams in our ecologically sensitive pristine North. With an Environment Minister like that, who needs natural disasters?

And then there is the mining tax. On the 7:30 report, Abbott claimed that the mining and carbon taxes were partly to blame for BHP Billiton’s decision to delay the expansion of its huge Olympic Dam mine despite the fact that Marius Kloppers said it had nothing to do with the mining tax which doesn’t even apply to the copper, uranium or gold extracted from the site.

Mining profits worldwide have slumped by half since 2011 as the mining boom comes off its highs according to a report by PriceWaterhouseCoopers which says that higher costs, more writedowns and fluctuating commodity prices have hit the fortunes of the top 40 mining companies including BHP Billiton and Rio Tinto.

PwC Australia’s head of energy and mining, Jock O’Callaghan, says the possible repeal of the mining tax in Australia is unlikely to have much impact on Australia’s appeal to investors. Not surprisingly, the government has failed to take note of this advice.

Mr O’Callaghan says he expects more mines to close, including in Australia. “Certainly if we see a further downturn in commodity prices that is going to put more pressure on marginal mines,” he said. “There is no denying that and again that is not just an Australian phenomena.”

As Ross Gittins explains,

“For the income earned by an industry to generate jobs in Australia, it has to be spent in Australia. And our mining industry is about 80 per cent foreign-owned. For our economy and our workers to benefit adequately from the exploitation of our natural endowment by mainly foreign companies, our government has to ensure it gets a fair whack of the economic rents those foreigners generate.

Because Labor so foolishly allowed the big three foreign miners to redesign the tax, they chose to get all their deductions up-front. Once those deductions are used up, the tax will become a big earner. Long before then, however, Tony Abbott will have rewarded the Liberal Party’s foreign donors by abolishing the tax.

This will be an act of major fiscal vandalism, of little or no benefit to the economy and at great cost to job creation.”

Mining currently employs about 2.4% of our workforce but this is set to drop as they move into the less labour-intensive production phase. As we saw during the GFC, they are not altruistic benefactors and have little loyalty to their employees. According to Richard Denniss

“When commodity prices fell during the global financial crisis the first thing the mining industry did was sack thousands of their workers. Indeed, according to Treasury, if all industries had been as quick to punt their employees as the mining industry the unemployment rate would have hit 19 per cent rather than its peak of 5.9 per cent.”

Penny Wong described Abbott’s rhetoric regarding the mining tax as “one of the most dishonest, self-interested fear campaigns that we have seen in Australian politics” and I can only agree.

After saying there was no difference between Liberal and Labor on education, we have seen billions cut with a backing away from the bulk of the Gonski funding, the abolition of trades training centres, and cuts to the before and after school care program despite childcare being identified as far more important in improving productivity and workforce participation than paid parental leave.

We have also seen the Coalition attempt to repeal Section 18c of the Racial Discrimination Act in a bizarre attempt to “protect the rights of bigots”. Countless journalists have said they have not felt constrained in any way by this section of the act and do not see the need for its repeal. This is purely and simply a pander to Andrew Bolt and Rupert Murdoch. Promoting hatred under the name of free speech is a truly cynical exercise which has left many Australians feeling very uneasy about what is happening to our country.

According to the Coalition, our debt and deficit are a real problem and spending must be reined in. While listening to a relentless barrage softening us up for the cuts that are to come, we watch Tony Abbott spend money hand over fist on his Paid Parental Leave scheme, orange life rafts, unmanned drones, planes both for the Air Force and himself, grants to polluters, gambling on the foreign exchange market, tax concessions for the wealthy, subsidies to profitable mining companies, marriage guidance counselling vouchers, and gifts to pollie pedal sponsors.

We are also going to sell everything we own and spend billions to build roads.  Public transport and high speed rail will receive no funding.  I am sure the fact that cars rely on fossil fuels hasn’t entered into the decision making.

With the rollout of the NBN in limbo, Malcolm Turnbull has admitted that he cannot keep his pre-election promises. His inferior offering will take much longer and cost much more than he led us to believe and will be outdated before it is even completed.

Abbott’s rush to sign free trade agreements which include ISDS clauses with all and sundry (No. 87 on the IPA’s wish list), has put our nation at sovereign risk where we will risk being sued if we introduce laws to protect our health and environment. It will almost certainly lead to a huge increase in the cost of medicine as pharmaceutical companies block the release of generic medicines, and a host of other repercussions that we can only anticipate with dread.

We have the Social Services Minister, Kevin Andrews, winding back gambling reforms and disbanding the oversight of charitable bodies. We have the Environment Minister disbanding climate change advisory bodies and removing environmental protection laws. We have the Health Minister disbanding bodies like the Australian National Preventative Health Agency, the Advisory Panel on Positive Ageing, the Alcohol and Other Drugs Council of Australia, and attacking Medicare with offices closed on Saturdays and co-payments likely. We have the Assistant Health Minister blocking a healthy eating website and the Assistant Education Minister asking childcare workers to give back their pay rise. In fact, I cannot think of one act or one piece of proposed legislation that has been in the best interest of the people of Australia.

With cuts to foreign aid, indigenous affairs, charities, and asylum seeker advocacy groups, it is increasingly obvious that the vulnerable can expect no protection or assistance from this government. They have made their agenda patently clear. Buy a ticket on the Good Ship Rinehart and lift with the rising tide, or be left to drown as the wealthy stand on the shoulders of the poor to board the corporate gravy train.

 

Sir Abbott, duplicity is thy name

 

queen

Do you come here often?

Every day the duplicity of this government becomes more apparent. In order to assist their political puppet masters, the Coalition is prepared to condemn future generations to the enormous task and cost of coping with catastrophic climate change.

Joe Hockey, in another crass display of duplicitous behaviour, tells us that Labor left us with a debt of $667 billion. What he fails to mention is that this is projected debt for 2024. By that time, if we continue on this path of destruction, I would suggest our debt will be far higher as we cope with natural disasters of increasing intensity and the health and social costs from rising temperatures and pollution of our air and water.

Our tourism trade will suffer as the reef dies, the old growth forests are logged, marine creatures are slaughtered, and animals become extinct as their habitat is handed over to miners and developers. Our farmers will struggle with drought as the Murray-Darling dries up. Summer will be a time to fear as bushfires rage around the southern states and cyclones and floods devastate the North.  Our exporters and airlines (if we have any) will face sanctions from countries that have emission reduction strategies in place.

The WHO’s Director-General, Dr Margaret Chan, joined the ever-growing chorus from influential leaders when she said:

Climate change will affect, in profoundly adverse ways, some of the most fundamental determinants of health… we need champions throughout the world who will work to put protecting human health at the centre of the climate change agenda.”

The group Doctors for the environment Australia focuses on the environmental causes of human illness and the means to address them. At their recent conference an impressive display of speakers urged doctors to become vocal and active in campaigning for urgent action on climate change.

Greg Hunt was heckled as he, in all seriousness, said that Australia would use its presidency of the G20 as a “catalyst” to help the “G4” – the US, China, the European Union and India – complete the groundwork for a new deal to lower emissions. He spoke about the value of trees in carbon reduction amidst taunts about logging the World Heritage forests in Tasmania. Do as we say, not as we do?

In October last year, Hydro Tasmania announced a record $238 million profit, $70 million of which came directly from the carbon tax. When asked if Tasmania would receive compensation for scrapping the tax, Greg Hunt said “We are not proposing compensation to businesses as a result of the carbon tax repeal.” But they are more than happy to give billions to polluters to update their factories.

Tasmanian opposition energy spokesman Mathew Groom said Hydro Tasmania’s record dividends had come at the cost of high power prices in Tasmania, and scrapping the carbon tax would lower power prices, but Lara Giddings said power prices were set to drop 5 per cent on January 1, independent of the carbon tax. So much for caring about Tasmania.

The Senate Committee investigating the Coalition’s Direct Action Plan have released their findings. To paraphrase…Direct Action is crap, won’t work, will cost a fortune, will require a huge bureaucracy to administer, is lacking in detail about implementation, is inadequate for now let alone the future, and is just downright madness. Recommendation – stick with our current system but up the ante.

Clean energy and low-carbon investors are abandoning Australia as the Federal government, and its conservative colleagues at state level, turn their interests and policies away from renewables and long-term carbon abatement incentives. Nathan Fabian, the head of the Investor Group on Climate Change, told the Senate committee that “Direct action is not an investment grade policy,” noting that investors viewed it more like a short-term grants scheme. Banks, he said, were likely to take a similar view, echoing the frustrations of many players in the clean energy industry who have been unable to obtain finance because of policy uncertainty.

Fabian also said the proposed review of the RET “appears to be another very clear signal that Australia will not be a market for low-carbon investing for the next few years. My members are looking at the United Kingdom, Ireland, the United States, France and some South American countries as having more stable investment environments for low-carbon opportunities ” So much for being open for business.

Tim Buckley, a former Citigroup chief analyst in Australia, clean energy funds manager, and now with the US-based Institute for Energy Economics and Financial Analysis, told the same hearing that the Australian clean energy industry is regressing because of the lack of clarity on policy.

“We are worse than stalling; we are actually investing in assets that I think will become stranded as a result,” Buckley said. “Internationally, companies and economies are building industry capacity to transition for the long term. We should be building capacity as well and we are not doing so.”

He said Australia was currently missing out on hundreds of billions of dollars that were being invested every year in renewables, in energy efficiency and in development of these new technologies, and the hundreds of thousands of jobs being created in China, in Germany and in America. So much for jobs, jobs, jobs.

Numerous other parties have dismissed the proposed emissions reduction fund as “unfinancable” – mostly because it offers a maximum 5-year investment horizon. That reflects the view of most people – and possibly even the government – that Direct Action is not a long-term policy position, just part of a short-term political manoeuvre that has helped deliver power to the conservative parties.

Economists are convinced that carbon pricing will yield the greatest environmental bang-for-buck at the lowest economic cost. Justin Wolfers, an Australian professor at the University of Michigan, says:

“Abbott’s plan doesn’t effectively harness market forces; it relies instead on the government handing out cheques. One problem is that we’ll end up subsidising a lot of abatement that would have occurred anyway. Another is that the plan imposes extra costs because it uses scarce tax dollars . . . All told, Direct Action involves more economic disruption for less of an environmental payoff.”

Quoting from the Federal Parliament website:

“The Senate is a house of review and a powerful check on the government of the day. The proportional representation system of voting used to elect senators makes it easier for independents and the candidates of the smaller parties to be elected. In recent decades this has meant that the government party usually does not have a majority of votes in the Senate and the non–government senators are able to use their combined voting power to reject or amend government legislation. The Senate’s large and active committee system also enables senators to inquire into policy issues in depth and to scrutinise the way laws and policies are administered by ministers and public servants.”

I would ask all Senators to remember their role. You have heard the expert advice. You have received submissions from stakeholders and concerned parties. You have whole departments to help you understand what you are being told. On the basis of what you have learned, you have recommended that we do not proceed with the Emissions Reduction Fund, that we have an Emissions Trading Scheme, and that we increase out targets.

The lie about the carbon tax hurting business and families just has to stop. Families were well compensated for the small increase in power bills due to the carbon price. Trade exposed businesses were also compensated. Renewable energy and sustainable practice received funding, and research and development was leading to whole new industries.  And if you were really all that concerned you could make power GST free.

Mr Abbott, your absolute intransigence on this matter, your insistence on “we said we’ll do it so we will”, regardless of all expert advice to the contrary, makes you unfit to lead our country. You show no intitiative, you are unable to react to changing circumstances, you are unwilling to take advice, and you are prepared to sacrifice all for the short term gain of the wealthy. And as for you Greg Hunt and Malcolm Turnbull, you are despicable – you know the truth but are unwilling to speak it.

People of Western Australia, I urge you to consider how important it is to have a genuine house of review in the Senate. Our fate lies in your hands.

The Peter Principle

Tony-AbbottThe Peter Principle suggests that people will tend to be promoted until they reach their “position of incompetence”, and that is exactly what we are seeing with this Coalition government.  They had six years in Opposition to develop their policies, and access to the Parliamentary Budgetary Office to cost them, but when it came to the crunch the cupboard was bare.

The assessment of the potential of an employee for a promotion is often based on their performance in the current job.  Tony Abbott has been described as a very good Opposition leader.  Personally I can’t see it, but that’s because I think all members of Parliament have been elected to help run the country.  Achieving anything was never on Abbott’s radar.  His entire being was devoted to “attack dog” and truth and decency were no impediment.  He wanted to win at any cost as Tony Windsor revealed.  But what now?

Over six months in and it is patently obvious that the Coalition have no plan at all other than to “slowly and methodically” pay hundreds of millions of dollars to private consulting firms and mates to see if they can come up with a way to make the Coalition’s election promises feasible.  We have well over fifty reviews and audits and white papers and green papers in progress.  Any discussion of policy or direction turns into “the mess left by the previous government”.  They fail to realise that they were elected to fix this perceived mess rather than waste time bemoaning it.  You don’t employ a new CEO to sit there saying “wasn’t me, was the other guy”.

The Royal Commission into the home insulation programme is a blatant attempt to discredit the previous government.  The money would be far better spent implementing the recommendations from the eight inquiries we have already had.  The Royal Commission into unions is another blatant attempt to discredit all unions, silence the collective voice of the workers, and taint the Labor Party for their traditional association with the unions.  There do seem to be some problems in the construction industry but this would be far better investigated by a police task force who can actually prosecute people.  If I was giving evidence about intimidation by bikies I would rather talk discreetly to the cops than to a televised circus who has no power to lock anyone up.

In the ultimate display of NIMBY, the Coalition is claiming success in its promise to “stop the boats”.  If the boats have stopped why are we paying the US $3 billion for unmanned drones and spending $7.5 million on orange disposable life rafts and $5.7 million on an intelligence gathering technology that aims to locate ”security threats” on the water before they reach Australian shores.  Not to mention the $16.8 million cost of extending naval vessel, the Triton, for six months and the $25 million cost of increasing the contract for the armed patrol vessel, the Ocean Protector.  All they have done is build a very expensive dam against the rising tide of refugees, thus inundating transit countries who are far less able to help these people than we are.

They remain committed to spend $22 billion on paid parental leave even though the productivity commission said replacement wage PPL was inequitable, very costly, and of little benefit.  All expert advice is that childcare is far more important in improving female workforce participation.

In the face of concerted worldwide action on climate change and investment in renewable energy, they insist they will “axe the tax” and get rid of the Clean Energy Finance Corporation.  This has nothing to do with making your electricity bill cheaper.  If they truly wanted to do that they could easily make power GST free just like fresh food and encourage competition through the renewable energy sector.  This is once again just a blatant attempt to discredit the previous government by blaming everything that happens on the “carbon tax” which is in fact a temporary fixed price emission trading scheme if we want to be correct.

For a government who wants to cut red tape, Direct Action and PPL are going to be administrative nightmares.  We already see Operation Sovereign Borders requiring “the co-operation of 15 departments” – how many public servants will these three policies alone occupy?

Rather than being flexible enough to react to circumstances, or adaptable to changing conditions, or willing to take expert advice, the Coalition have a script which they are determined to deliver regardless of the cost or what is happening in the rest of the world.

The author of the Peter Principle suggests that “work is accomplished by those employees who have not yet reached their level of incompetence.”  Rather than seeking to promote a talented “super-competent” junior employee, Peter suggested that an incompetent manager may set them up to fail or dismiss them because they will likely “violate the first commandment of hierarchical life with incompetent leadership: [namely that] the hierarchy must be preserved”.  We mustn’t have any of those pesky scientists or expert public servants or, God forbid, women, showing us up.

Peter goes on to say that “Staff who find themselves with what they consider to be incompetent superiors may try to “manage upward” and support or manipulate them to be more effective, or may simply devise ways to minimise the damage and influence they have on the organisation.”  Peta Credlin is never more than a few feet from Tony.  She sits at the table with world leaders carefully managing what her creation says and does.

A similar theory was proposed by Scott Adams, creator of the Dilbert cartoon series. In his 1996 book, The Dilbert Principle, Adams suggested that “the least smart people are promoted, simply because they’re the ones you don’t want doing actual work.”  We really need to find something to keep George Brandis occupied or he is just going to keep spending a fortune on trashy books to fill his gargantuan custom-made bookcases, and on “networking” at weddings.  Other than approving raids and redefining human rights, George has spent a lot of time correcting grammar in preparation for ‘repeal day’ – the so-called bonfire of regulations.

The deregulation of financial advisers should give us all a clue about the mentality of this government.  They have our money to invest but they refuse to be obligated to invest it in our best interest.  To paraphrase Gough Whitlam…

Well may they say God save the Queen, because nothing will save the country (other than an election).

An act of betrayal

Image by themotorreport.com.au

Image by themotorreport.com.au

Before the introduction of carbon pricing Tony Abbott claimed that the price of petrol would go up by 6.5c per litre.  It actually went down by 3.3 per cent in the first year.

He claimed that the cost of living would skyrocket.  Inflation for 2012-13 was 2.3 per cent which is at the lower end of the RBA’s target range.  It was estimated that about 0.7 per cent of that rise was due to carbon pricing.  To put that into perspective, the GST and related changes caused an increase to the CPI of almost 2.5%! Record low interest rates have also led to substantial savings on mortgage payments.

He claimed that power bills would increase by $300 a year.  This was a reasonable estimate.  To compensate for that the tax free threshold was increased from $6000 to $18,200 which meant that the majority of people earning less than $80,000 saved at least $300 on taxation.  Pensioners and self-funded retirees, as well as family payment recipients and other allowance recipients had their payments increased.

The level of compensation saw the vast majority of people fully compensated for the price increases, and millions of households, particularly pensioners and low income households, actually ended up better off. Plus, if you can reduce your dependence on carbon-intensive products you could end up even better off still.

Tony also continues to claim that the carbon tax is responsible for the closure of businesses.  Not one of the many manufacturing or mining ventures that have closed have mentioned the carbon tax as a reason.  With the imminent repeal of the carbon tax in July, rather than a decrease, we are seeing a rapid increase in industry closure all of whom seem to agree that the greatest pressure has come from the high Aussie dollar.

The carbon price only applied to about 500 businesses and there were six different streams of assistance that industry could apply for, with special consideration given to those who were “trade-exposed” by having to compete with companies that did not have carbon pricing.  Tony was embarrassed on more than one photo shoot to be told about grants and industry assistance that have been given to the very businesses he was saying had suffered.

In fact, before carbon pricing, Qantas had to pay an initial carbon tax penalty of 15% on its carbon emissions for any flights it made into or out of Europe. This penalty would increase over time, and is payed directly into the coffers of the European Union. The reason for its imposition was specifically because Australian did not have a carbon price in place.

Over the next few years, the European Union will expand its penalty regime to impose general sanctions on countries that do not meet its standards on carbon reduction mechanisms.

There are further economic reasons behind acting to implement a price on carbon, aside from the risk of foreign sanctions. The fact is that renewable energy technology will be the next huge growth industry. The Chinese have been quick to recognise this and have the highest level of investment in this sector, accounting for almost 25% of worldwide investment in renewables in 2010 for a total of $50 billion USD. If we do not incentivise investment in the sector, we will simply be left behind.

Fossil fuel subsidies cost almost $200 per taxpayer per  year while mining companies continue to enjoy record profits.  As they move from construction to production phase, profits will increase but jobs will be lost in this less labour-intensive phase.  It is unjustifiable madness to repeal the mining tax just when it could make us some revenue.  The cost of repealing that tax on superprofits is the loss of the schoolkids bonus, delay of superannuation guarantee increase, scrapping of the low income co-contribution to superannuation, and scrapping of the instant asset write-off for small business amongst other things.  In other words, the workers will take a cut so the profits of mining companies can skyrocket.

I know energy bills are high but let’s be clear about when that happened and why.  In the 7 years prior to the introduction of carbon pricing, the average bill for a customer in regional NSW had risen by 154 per cent to $2520.  This was due to the ‘gold-plating’ of Australia’s power grid.  Power companies had been basing spending decisions on their own forecasts of future consumption of electricity, but power demand has been decreasing.

Escalating use of renewable energy and energy efficiency are contributing to reducing wholesale power prices across Australia.  Mr Abbott seems convinced that the Renewable Energy Target and the carbon trading scheme were almost entirely to blame for the doubling of power prices since 2007, even though the Australian Energy Market Commission and every state government utility regulator has provided information that shows this is not accurate.  Distribution network charges, supported by transmission networks, are by far the biggest cause of price rises, even though peak demand growth has tailed off well below the projections used to justify this huge expenditure.

There has been a deliberate campaign of misinformation about carbon pricing and the renewable energy target and the assault looks set to continue with the appointment of self-confessed climate change deniers, opponents to renewable energy, and fossil fuel industry lobbyists, as government advisers.

Pinning our economy to an industry that the rest of the world is moving away from is economic short-sightedness to say the least.  Expanding coal mining as the price plummets and China and the US sign agreement to move towards clean energy and sustainable practice is bad planning.  The short term boom has made our dollar so high that we are seeing the death of manufacturing nationwide.

If Tony Abbott really wanted to lower your energy bill he could do it very easily by making power bills GST free.  If he really cared about action on climate change he would keep carbon pricing and invest in renewable energy.  If he truly cared about falling revenue in this country he would tax the superprofits that the mining companies make.  If he really cared about jobs he would be investing in the industries of the future and the education and skills training of our youth and retraining of the many people whose jobs have been sacrified to fossil fuel greed.

Mr Hunt, two months ago you said:

“Our Direct Action plan encompasses support for solar power through our One Million Roofs, Solar Towns and Solar Schools programmes”.

These initiatives are in addition to support for renewable energy through the Renewable Energy Target and the Australian Renewable Energy Agency, which is funding projects and research across the spectrum of renewable energy sources, including bioenergy, hydropower, geothermal, ocean energy and wind.

The Government will provide $500 million for the One Million Solar Roofs programme and a further $50 million each for the Solar Towns and Solar Schools programmes.

The Solar Roofs programme will provide $500 rebates for installing one million rooftop solar energy systems over the next ten years.

This rebate will be in addition to the support already provided through the RET. Eligible systems will include small-scale photovoltaic systems, solar water heaters and heat pumps.”

Do you stand by what you said and your support for the RET?  I am paying you to fulfil the role of Environment Minister which is a job with a huge responsibility attached.  If you make the wrong decisions the consequences could be far worse than any war that mankind has seen and the longer you delay, the more likely that the damage will be irreversible.

Tony Abbott described carbon pricing as “an act of betrayal”.  What do you call paying vested interests to convince us to maximise their profits by throwing ourselves, our children and our planet off a cliff?

Could they?

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Next week, the 19th session of the Conference of the Parties to the UNFCCC and the 9th session of the Conference of the Parties serving as the Meeting of the Parties to the Kyoto Protocol will be held in Warsaw. These sessions are a continuation of the process that included the important and internationally accepted Kyoto Treaty, and are building towards a final meeting with the intention of creating a binding, internationally agreed treaty on climate change mitigation, in 2015.

Not entirely surprisingly, the Abbott Coalition government will not be sending a Minister nor a senior representative. This omission is regarded as “highly unusual“, but from a government openly skeptical of the human impact on climate change (or the very existence of it) and hostile to most accepted forms of responding to it, it can perhaps be understood. It is disturbingly ironic that the Environment Minister, Greg Hunt, will instead be in Parliament trying to dismantle Australia’s world-leading attempt at carbon abatement through an emissions trading scheme whilst his international counterparts will be at a global conference discussing ways to implement exactly this kind of scheme.

More disturbingly, the government has cancelled consultations which were already planned with domestic business representatives and foreign diplomats to brief them on Australia’s stance at the talks. These consultations are traditionally held in advance of this annual meeting and some have suggested that their cancellation indicates rifts and disagreements within the Abbott government about the appropriate approach. But a more sinister possibility exists.

It is certainly possible that the meetings were cancelled because Australia effectively has no stance on the climate talks to offer; that the Cabinet is not united, the Abbott government has not had sufficient time to formulate an approach, and to engage in these consultations would reveal the extent of the disagreements. It’s also possible that the Abbott government thinks that climate change discussions are such a waste of time that the cancellation of these meetings is a cost-saving measure. But these are not the only possible explanations.

Whichever way the talks go, and whatever you think of anthropogenic climate change, Australia stands to lose, and lose big.

  • If climate change is real and goes unmitigated, we’re amongst the biggest losers in terms of environmental impact, with effects on health, productivity, real estate and loss of food security.
  • If climate change is not real but enforceable limits come into place, Australia’s biggest competitive advantage in the world – and pretty much the only one that matters under a Coalition government – is badly devalued. It’s known as a carbon bubble and the effects on Australia would be severe. If Australia can find no buyers for her coal, oil and gas, or the terms of trade for these resources decline, then Australia’s GDP goes through the floor. Cue huge unemployment, recession, social unrest – and if Australia failed to succeed in heroic efforts to retool for a new economy, failed state status would not be out of the question.

There are thus three major policy positions available.

  • If you don’t believe in climate change, the only position with integrity is to frustrate the creation of any kind of global, binding emissions standards. The imposition of these standards would needlessly and critically damage the Australian economy, and the Coalition is tying Australia ever more closely to the success of its carboniferous export markets.
  • If you are agnostic on climate change, the pragmatic position, of greatest benefit to a political party right now, is to frustrate global standards. In this way you can defer the negative impacts of binding emissions standards and the end of the carbon bubble, at least for a while. Hopefully, at least while you remain in power.
  • If you are a believer in climate change, the only position with integrity is to support and promote global standards, which will have significant economic consequences for Australia. The resultant devaluing of the big mining companies will mean foregoing a huge volume of tax and royalty revenue. It will require a significant effort at retooling the economy to support renewable energy, with increased research and development, funds being given to climate projects, and governmental support and backing for mechanisms to reduce carbon outputs without crippling the economy. In other words, much of the infrastructure that makes up Labor’s ETS legislation, that Greg Hunt will be trying to dismantle starting next week.

The Coalition has an overall tendency towards climate change denial, and an overwhelming amount of political pragmatism. Could they be planning to vote no; to do everything possible to sabotage international agreement on the topic of standards?

It can only be to the Coalition’s benefit to frustrate global agreement on carbon standards. Successful adoption of binding standards has the following effects:

  • The Coalition’s stance appears increasingly out of step with the rest of the world;
  • Other countries divest from oil, coal & gas, with the aforementioned economic impacts on Australia;
  • Other countries benefit from their own huge investments in solar/renewables, that the Coalition has turned its back on or repealed; and
  • The importance of the global emissions trading market burgeons, just as the Coalition may well be successful (particularly after July 2014) in deconstructing Australia’s own stake in the game.

On the other hand, continued global disagreement has the following outcomes of benefit to the Coalition:

  • Support is provided to the standard political excuses: “The science isn’t settled”, “The argument’s not over”, and “We’re awaiting consensus.”
  • A temporary delay may be achieved in the collapse of the fossil fuel market. This provides the government of the day more time to dig up and sell the fossil fuel resources Australia is so rich in, while we still can.

If the Coalition truly disbelieves in climate change, or man’s contribution to it, then if it is to be true to itself, it will mandate policies that frustrate the efforts of meetings such as Warsaw, November 2013. In so doing, it is going to be actively destroying the future of the planet; furthermore, it is currently lying to the Australian people whenever it talks about Direct Action and carbon emissions targets it doesn’t see as relevant. To readers of this blog, this is no revelation at all.

If the Coalition isn’t sure about climate change and is simply being pragmatic, in addition to destroying the future, they are more culpable: they are deliberately risking the future for the sake of their own political present.

And if, contrary to many peoples’ beliefs, the Coalition actually believes in climate change, but still acts to frustrate consensus for its own political gain, knowing the effects it will have on generations yet to come, then that would be the most evil of all.

An Open Letter to Bill Shorten

Dear Bill Shorten,

May I call you Bill?  I feel that after a lifetime of supporting Labor I’m entitled to that modest liberty.

Bill, I’ve just read one of the most shocking things of my adult political life.  I’m overtaken with competing emotions and reactions; I’m simultaneously bemused, disturbed, incredulous and thoroughly gob smacked.  It seems that you and the Labor Party are considering backing away, even if only temporarily, from your commitment to your established carbon pricing agenda.  It seems you’re considering allowing the Abbott Government to “scrap the tax” after all.  Is this true or just media speculation?

Excuse my candour, mate, but assuming it’s true: are you flipping insane?  Has Labor completely lost its capacity to read the electorate and the politics of this issue?  Its record of the last six years gives a certain pause for thought on that score.  I put it to you in the strongest possible terms that this is the worst move you could make with regard to action on climate change – or your political future.  I remind you that over the previous six years you’ve been on the wrong side of the politics on this, but on the right side of the policy.  The political failure is your (Labor’s) fault.  You were politically out-witted by an economic and scientific half-wit.  How does that feel, Bill?  Smarts a bit, I imagine.  Now you want to hand him the shovel with which he can dig an even deeper hole for you?

Here are some things I feel you should seriously consider:

#  Over the last six years you allowed your political opposition, with an overtly skeptical disposition to climate change, to control the narrative of this policy area.  You allowed this opposition to take one of the greatest dangers facing modernity and fudge it, misrepresent it, dilute it, re-characterise it, morph it from a scientifically based human imperative to a petty squabble over economic semantics.  You failed miserably.  I’m sorry, Bill, but there’ no other way to say it.

#  Soon after being deposed as Prime Minister by Kevin Rudd, Julia Gillard expressed her regret at not having taken a more direct and aggressive stance with regard to the aforementioned dynamic.  You recall, in her Guardian piece she said:

… and in a political task that will require bravery, Labor must continue to stand behind the significant policies which are right but are currently outside the national political consensus. Clearly, carbon pricing is the political giant of this class. 

Without doubt, Tony Abbott won this public opinion war and dominated this political conversation. The times suited him. For most Australians the last long drought was perceived to be the result of climate change, and when the drought broke their concerns about climate change receded. The circus in Copenhagen and “climategate” fed scepticism. Then, at the worst time, the structure of the Australian electricity market delivered huge rises to the electricity bills of families. While cost of living pressures were easing in other parts of the family budget, the pain of these big lumpy bills was acute and remembered.

Labor’s failure to embrace Malcolm Turnbull’s bipartisanship when it was on offer, to campaign vigorously and go to an election early on carbon pricing in late 2009 or early 2010, and the twists and turns of Labor policy since have all fuelled this fire of opposition. 

I erred by not contesting the label “tax” for the fixed price period of the emissions trading scheme I introduced. I feared the media would end up playing constant silly word games with me, trying to get me to say the word “tax”. I wanted to be on the substance of the policy, not playing “gotcha”. But I made the wrong choice and, politically, it hurt me terribly. 

Hindsight can give you insights about what went wrong. But only faith, reason and bravery can propel you forward. 

Labor should not in opposition abandon our carbon pricing scheme. Climate change is real. Carbon should be priced. Community concern about carbon pricing did abate after its introduction. Tony Abbott does not have a viable alternative. 

While it will be uncomfortable in the short term to be seen to be denying the mandate of the people, the higher cost would be appearing as, indeed becoming, a party unable to defend its own policy and legislation: a party without belief, fortitude or purpose.

Please take note.  You’ll find a very significant number of Labor supporters are in complete sympathy with the sentiments expressed in that quote.

#  Whilst in Government you allowed a ratbag bunch of guttersnipes to take the momentum and high ground away from you – on this and other issues.  Now, unfathomably, you’re considering handing that back to them, only magnified.  Do you not understand how such a move will be interpreted by much of the electorate?  No?  Well, I’ll tell you – it will be seen as a confession that Labor was wrong and the Coalition was right all along.  The truth of that doesn’t matter, as you well know.  Much of the electorate has an entirely plebian rather than substantive and sophisticated engagement with policy.  Tony Abbott’s campaign proved that beyond question.  The average person on the street will see your action as an admission of fault and failure – on policy and not just politics.  Do you have any idea what that will mean?  Again, if not I’ll tell you – it will mean that the Abbott Government will have the issue all to themselves.  They will have the high ground.  They will lead the political discourse and will posses the enormous political luxury of having the only climate change response out there in the public market place.  That will inevitably lead to their position, their attitude, their policy gaining acceptance with the electorate.  Frogs in heating water, Bill.

Time to toughen up, Bill Shorten (image from the guardian.com)

Time to toughen up, Bill Shorten (image from the guardian.com)

You will not be able to offer any credible opposition to, or criticism of, the entire philosophy of Direct Action if you have tossed aside the alternative.  The criticisms of an Opposition that walked away from its own policy will ring completely hollow and will be effectively and rightly dismissed by the Government.  And should you go into policy hiatus on the issue, which is what is being suggested, it’ll amount to going into a fistfight without hands.   Saying you will “scrutinise” Direct Action is the language of the weasel.  What’s to scrutinise?  You know perfectly well what’s wrong with it – that it cannot achieve anything meaningful and that it’s a total cop-out.  Scrutinise?   What the hell?  That, mate, is tantamount to implying you might come to accept it yourself.

#  You have to stand firm.  You must recognise the political failure and naiveté of Kevin Rudd’s hopeless attempt to take some of the political momentum away from the Coalition during the election campaign by indulging in the rhetoric of “dumping the tax”.   No such thing was happening.  You were moving from a static price ETS to a floating price ETS.  You were simply re-scheduling.  You weren’t doing anything with a tax that didn’t actually exist.  You were playing catch-up with the politics and you looked stupid for doing it.

Do you seriously think there will be no social and political impact from years of nothing but the Coalition’s attitude and actions with regard to climate change being the political soup du jour?  Do you seriously think that whatever new strategy you come up with, which will inevitably cost the electorate something, will not be immediately characterised by the Coalition as a “tax”?  Do you really think you can avoid that?  You can’t and you’ll have to deal with it.  It’ll be a hundred times more difficult to cope with the politics of it in the future than if you stand up and deal with it right now.  Do you really want to have to virtually start from scratch on this?  Do you really imagine a decade of inaction on climate change by this country won’t have all sorts of repercussions?  What do you think is going to happen to the Australian mind-set during months and years of the Coalition quietly taking climate change off the political radar?  You want to be faced with having to prosecute a whole new case for real climate change action in that sort of environment?  Really?

Selling an ETS ought to be as politically simple as selling the NDIS was.  It’s about our children and our future.  You need to think about why you couldn’t do it and fix that.  Running away from your failures is a coward’s response dressed up as the pragmatism of politics.  Seriously, Bill, when was the last time the Labor party showed some genuine political courage and statesmanship on something?  No, I can’t remember either.

The rot started when Uncle Kim began to capitulate on asylum seekers and it’s only gotten worse from there.  Polls have replaced ideology in terms of political priority in the minds of far too many in the Labor Party machinery.  Your support base is heartily sick of it.

#  Call Tim Flannery immediately.  Speak to him about making the new Climate Council an official Opposition research and advisory board (or whatever is politically appropriate).   Show the Australian people that the Abbott Coalition cannot simply dump important Government advisory bodies like the Climate Commission and get away with it.   You must send some positive, unapologetic and strong messages on this.  If you do not, you are gifting the Coalition two terms in Government.  That is unacceptable.  It is also utterly avoidable.  Do you actually want to avoid it, Bill?

#  The Australian public deserves, and I suspect, desperately wants you to be the strongest Opposition you can be – right from the start.  Your support base is crying out for it. They are quietly pleading for it.  Well, in some quarters not so quietly.  Surely you understand that this Government has no real mandate for anything.  They went into the election with the most sorry looking policy platform seen in this Nation for decades.  The election was not a referendum on Carbon.  You know that.  Labor lost the election – the Coalition did not win it.  You know that too.  This means this Government is vulnerable.  It has to earn its stripes, its credibility.  It’s imperative that it does not achieve this by default of there being no effective Opposition.  Backing away from a signature policy on climate change is to take a gigantic step in the direction of doing and being nothing.  Find a way to do the politics better.  Be a leader. You don’t have the luxury and this country can’t afford the luxury of the Labor Party sitting back contemplating its navel and its policies.  You had a vision for the future; you had a policy platform – and it was perfectly fine.  For the most part it had broad community support.  You didn’t lose the election because of your policies (and the Coalition sure as hell didn’t win because of theirs); you lost it because you screwed up the politics.  You put a disunified Labor Party on the front page of every newspaper every stinking day.  Seriously, Bill, who the hell was going to vote for that?

Ok, I’ve made my points.  I apologise if I seem rather agitated.  It’s only because I am.   There is no reason whatever for Labor to back away from its climate change agenda and a multitude of reasons for them not to.  Big reasons – the sorts of reasons that are above politics.

You are risking my vote on this.  And whilst I can’t speak for others I dare speculate you may be risking quite a few more.  In the most recent Labor Party email blast, National Secretary George Wright – you know him, right? – said,

‘The Labor Party my parents introduced me to was courageous, visionary and striving for equality and opportunity. ‘

Mine too.  Has it gone, Bill?  If not, now would be a really good time to show us.

Yours sincerely,

Dan Rowden

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