Premature congratulation
The Abbott government suffers from a bad case of premature congratulation.
We have had a parade of Hockey, Cormann, Frydenberg, Abbott and others telling us that they have halved Labor’s debt – which is a rather bizarre claim considering the gross debt has increased by $83 billion (and counting) since they took office.
Joe Hockey tells us that “job creation across the economy is running at around 15,000 new jobs a month. This is three times larger than the average of around 5,000 jobs a month last year.”
Aside from the fact that there is no measure of “new jobs” (job ads do not differentiate between new and existing jobs), comparative figures show that, in the 19 months from August 2013 to March 2015, there was a rise of 52,300 in the number of people employed and a rise of 56,200 in the number of people unemployed. The aggregate monthly hours worked fell from 1,647.3 million hours to 1,628.7 million hours. In other words, employment has not kept up with population growth and those who are working are working less hours.
Parliamentary Secretary to the Prime Minister Christian Porter informs us that cuts to red tape have delivered $2.5 billion in savings in compliance costs since coming to Government. To arrive at this figure they have done some very creative accounting.
People buying prepaid mobile phones will only have to go through the identity check once, not twice, saying that will save $6.2 million.
He said rejigging the e-tax website so the data entered the previous year shows up would save time and cut costs by $156 million and he said there was a $17 million saving in scrapping regulations that banned people using mobile devices on take-off and landing in planes.
The costs were partly calculated by working out how much time people or businesses would have spent complying with the rules and then what their time was worth. Who would have thought that turning off your phone for a minute would have cost so much?
Andrew Robb has been showered with praise for completing several free trade agreements. The secrecy surrounding these negotiations makes it very hard to understand the full implications but the FTA with Japan alone led to a $1.6 billion write down in revenue. One must wonder why these countries, after years of negotiation, were all willing to sign off so quickly all of a sudden. I fear our Pharmaceutical Benefits Scheme will be under attack very soon, along with our plain packaging laws, and that manufacturing will have no future in this country.
We have also been barraged by a litany of self-congratulation for “stopping the boats”. Whilst the number of boats is less, they certainly haven’t stopped, even under the threat of incarceration and torture at the other end. But more to the point, what has this policy achieved in helping the growing tide of displaced people around the world? We pretend to care about deaths at sea but apparently don’t give a toss about what is happening to those we turn away.
The gold award for premature congratulation, however, must surely go to Greg Hunt who, in one day, would have us believe that he cut our emissions by 4 times what occurred under carbon pricing and for 1% of the cost. This unbelievable statement is so wrong on so many counts it is hard to know where to begin.
A study by the ANU showed that emissions reductions directly attributable to the carbon price in the electricity sector alone had achieved an abatement of between 11 and 17 million tonnes over its two year life while raising around $6 billion in revenue. Abatement would have been even higher had the industry believed the carbon price to be permanent.
Whilst it’s true that demand has been falling for some time, 2013’s 0.8 per cent economy-wide fall in emissions was the largest annual reduction in the 24 years of monitoring. In the power sector, the industry most directly covered by the carbon price, emissions fell 5 per cent.
Hunt’s ridiculous statement that the carbon price was $1,300 per tonne has been lambasted by experts for the lie that it so obviously is. The real price was in the 20-odd dollar range, and if the carbon tax had been allowed to develop into an emissions trading scheme, which it would’ve by now, the price would be linked to the European system which is trading at around the $10 mark.
Hunt’s other glaring omission is that while the Coalition’s policy is a cost, the carbon tax raised revenue.
What the government has actually done is spend $660 million of taxpayers’ funds buying a possible 47 million tonnes of carbon abatement – 25% of their total budget for 15% of the required abatement.
As reported in New Matilda, there’s also no guarantee the contracts companies won in Thursday’s ‘reverse auction’ will be discharged before the 2020 deadline. Many of them extend for seven or 10 years, and the government has not provided information about when the abatements need to be achieved.
“The experience with grant-based mechanisms is some of the projects proposed or actually contracted don’t happen in actual fact,” Professor Jotzo said. Even if they do, the types of projects contracted so far are largely land-fill and agriculture abatements, many of which may have been occurring already under ‘carbon farming’ initiatives, or would have occurred anyway. Hunt is very much counting his chickens before they have hatched.
A very excited Andrew Robb also informed the Mines and Money Conference in March that “Federal Environment Minister Greg Hunt has quickly approved 145 projects worth over $1 trillion in economic value; the majority of which are in the resources and energy sector. Federal project approval times have been slashed to below 200 days from an average of 470 days in 2012. We have created a ‘one-stop shop’ for environmental approvals that eliminates duplication between states, territories and the Commonwealth, saving business $426 million per year.”
The trouble with fast tracking approval is that companies lie and it takes expensive court cases to prove it.
A Queensland court has heard expert evidence from Adani’s own witness that the Indian company which wants to build Australia’s largest ever coal mine has drastically overstated the project’s benefits to the Queensland public. And in other explosive evidence, a senior company official said he “could not comment” on speculation the company had been structured to siphon profits off to Singapore, Mauritius and the Cayman Islands, to avoid Australian company taxes.
Adani’s claims about the number of jobs the project will create have already been referred to the Australian Consumer and Competition Commission by the Australia Institute, which argues they have been inflated by 300 per cent.
Adani has also claimed that the mine would generate “$22 billion in mining taxes and royalties in just the first half of the project life”. Even their own expert belies this claim, estimating that royalties will actually amount to just $7.8 billion and corporate taxes will add around $9.96 billion over the 30-year period under consideration. This too is being challenged as they apparently used a company tax rate of 32% rather than 30% and have been actively structuring their company to “optimise” their tax obligation.
Earlier this month, as part of the Land Court proceedings, the mining giant argued that the world is on track to a 3.1 degree temperature rise and if they don’t dig up the proposed 60 million tonnes of coal annually, another, potentially foreign, company will. Such a rise in temperatures, Adani’s expert witness conceded, would ultimately destroy the Great Barrier Reef.
When Indian Prime Minister Narendra Modi, considered to be a close friend of Gautam Adani, attended the G20 conference in Brisbane last year, he announced a $1 billion loan for the Adani project from the State Bank of India. Apparently, this offer is being withdrawn, adding to the growing list of banks and financial organisations refusing to offer finance for the proposed mines.
So despite all the back-slapping and self-congratulation indulged in by the Coalition, it is hard to find any tangible benefit from having the adults back in charge. The reality is that the debt and deficit are worse, unemployment is worse, our sovereignty to make health and environment laws is at risk, our emissions are increasing, investment in renewable energy has ceased, we are endangering the Great Barrier Reef, and we have done nothing to help asylum seekers.
But rest assured, by keeping your phone on during take-off and landing, you are saving the country millions.
