The truth about the ‘carbon tax’
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The Queensland Competition Authority’s report estimates that, if the carbon tax is repealed, the average electricity user can expect their bill to increase by 5.4 per cent, or about $76.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”?
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The truth about Australian taxpayers subsidising mining companies for fuel.
$182 a year for every Australian taxpayer.
$2 billion a year.
The ABC ‘fact-check’ showed:
The sharp rise in network costs arise because of a lack of investment in years gone by and now due to ‘gold plating’ of the grid. Here in Queensland the government owns the network through Powerlink and it’s in their financial interest to ‘gold plate’ because their return on investment is guaranteed by the price regulator, and the return is much higher than one can get through other investments.
The ‘gold-plating’ was justified on a demand projection that did not materialise.
Reblogged this on Damn the Matrix.
Indeed! This lack of demand can perhaps be traced to three forces. First, there has been a move away from electricity intensive industries such as steelworks, oil refineries and aluminium production.
Second, there’s been more government regulation (no it’s not just the ‘market’ that drives good outcomes). The introduction and spread of Mandatory Energy Performance Standards for household appliances such as fridges, freezers and other ‘white goods’. And we shouldn’t forget home insulation schemes.
Third, the punters have been cutting back due to rising prices. Here the price on carbon emissions played a part, including the making of consumers more aware.
And that is the point that never gets stressed enough. This is about changing behaviour and it has been a successful start at something we need to continue
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@Kaye Lee
Something we desperately need to continue !
“Tony Abbott has declared that his government’s disappointing result in the WA Senate election will only increase his resolve to scrap the carbon and mining taxes.”
Is this just a display of stubbornness? I don’t understand why you would forego $13.7 billion from the carbon tax and $3.3 billion from the mining tax and $3.1 billion in taxation and superannuation changes over forward estimates (Hockey’s own figures) when you have a so-called budget emergency.
What I also don’t understand is how the public is buying wasting $22 billion on Tony’s “please like me” Paid Parental Leave scheme.
These few decisions, along with Direct Action $3.4 billion ‘pay the polluters’ and Hockey’s $8.8 billion gift to the RBA and the $300 million per year interest we must now pay on that loan, have cost the budget about $55 billion over forward estimates. Add to that the proposed cut to company tax. Is the man mad???
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Pensioners will be paying for the moron to "stop the taxes".
i have never read more rubbish if you had listened to the last two labor pms you would have known it was a tax and we all know that we pay a tax. As for your arithmetic the rabbott was a rhodes scholar so he would know more than swan, nambour high for christ’s sake what would he know, and as little billy knows his fellow jesuit trained scholar is opus dei and cannot lie. Joe bullock is a santamaria man and DLP through and through ie gay is unnatural, religiously anti-women, frightened by communists and unions making him an equal match with little billy and torpid tania.
Reblogged this on contriteshadow.
Can someone please confirm:
There were tax benefits and subsidies given to households to offset any cost increase caused by carbon pricing. Is that right?
Assuming I remember correctly… does that mean that the Abbott government will be reversing these changes if the carbon “tax” is scrapped?
Froggy and Toad destroy the swamp while living in isolation and luxury.
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@Mars08
You are correct in the first instance.
The moron intends letting everyone keep the "subsidies" but no doubt will hit them with more taxes to recoup the loss to Treasury.
Pensioners who voted for the moron are now going to feel the pain.
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The Grattan Institute is being reported as recommending that students with loans who die should be chased into the grave to repay them :
http://www.theage.com.au/national/education/collect-unpaid-student-debts-after-death-thinktank-20140406-366mp.html
And the Abbott government is the right one to do it.
Mars 08 you are dead right. But Abbott will not directly specifically precisely reverse them – he will just impose pain elsewhere, slash elsewhere, while protecting billionaire petrol company bosses, casino owners, bankers and miners
Really? Seriously?? He has openly admitted that the Labor government had compensated people for any price increase AND he’s ruled out clawing back that compensation???? Yes, I understand he probably has other ways of making the community pay…
Joe said this in MYEFO
“The total impact of the repeal of the carbon tax and associated measures is a net deterioration in the budget of $7.4 billion over the forward estimates period. This cost reflects, in part, the Government’s decision to retain the current personal income tax rates while abolishing the carbon tax, and to maintain the increases in fortnightly pensions and benefit rates that were introduced with the carbon tax.”
http://www.budget.gov.au/2013-14/content/myefo/html/03_part_3.htm
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I don't know what the Murdoch papers down south are saying but the Courier Mail here in Queensland is getting desperate for Abbott to be right about Flight MH370.
The whole world turned its attention down under when the moron jumped the gun and said there was "credible information" in relation to the missing flight.
So far all that has been found is a Sargasso sea of rubbish.
Which is what the moron Abbott has been selling Australians for 4 years.
Anyone see smokescreens called “Royal commissions?”
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@Kaye Lee
Joe "don't know" Hockey is the Harold Holt of Australian Treasurers.
Lost and all at sea.
So how did we end up with such a collection of evil imbeciles running the place? One word sums up the cause, in my opinion at least-Murdoch. A name that, I believe, will be reviled by our brief posterity.
Ha! Maybe I mix with the wrong crowd, maybe the Labor government were pathetic communicators, maybe the MSM is hopelessly biased, maybe Abbott’s slogans were too good, OR maybe it’s a combination of these things (and more)… but ….
Nobody I’ve spoken to in the past 2 years had any idea that the government was compensating them for any price rises caused by carbon pricing. In fact I was at the stage of believing that I was mistaken about the change in taxes and pensions!
Only we, @mars08 who were to be affected followed closely the affect on our fixed welfare support incomes. After the GST we were keenly aware how easily a new ‘tax’ ( it was always a “PRICE” but the MSM never said that….and the Mining ‘tax’ was best for the country at large) can affect the way we can live and pay basic bills.
We, with a conscience, wanted action on climate change and were relieved that an ETS was to be introduced asap after 2007 progressive win.
Now? We are holding our breaths as Abbott takes an axe to pensions, DSP, etc.
It is the age pensioners who ‘traditionally’ vote LNP who will be the most shocked and angered but they will be sold/told it is all Labor’s fault.
It appears the Chinese could have got results, operating outside the Australian imposed search area. If true will rub salt into the wound. Especially so, as Abbott is now doing his bested friend act in Japan.
I see where Abbott has admitted, Trade pacts are hard. Different to his boast before Christmas, where he was gong to sign, back then, claiming that Labor had been hopeless.
Funny that Abbott has much he accused Labor of, not to be true. No fat to trim in the PS. No easy cuts to make in the budget. The list just goes on and on.
What will Abbott have to talk about, if the MRRT and so called tax is repealed. Yes, it will not delver what he claims. Cannot do so, as none of his figures add up.
People seem to be awakening to the dangers of carbon emissions, and will be demanding something be done. Many do not seem to have connected the relationship between what Tony calls toxic tax, and lowering carbon emissions. Maybe the penny will drop soon.
DD cannot work, as it is inefficient, and worse based on dubious and non existent science.
The majority of scientist and economist are unlikely to be wrong.
As Milne said, Abbott’s honey moon is indeed over, and Tony has to learn how to bargain, as all PM”s before him has. No PM gets all they want. If we are unlucky enough for them to gain majorities in both houses, we get disaster. How WorkChoices came about.
Just watching the history of Aborigines land rights. The hullabaloo was as bad then. Remember the outcry that they were going to take over out backyards. Mabo has survived, but curtailed by Howard, and I believe in the sights of Abbott.
We have suffered the same over the last few years with the outcry against a MRRT and ETS for carbon emission.
Why are we so easy conned, when all we have to do, is look at figures, and see where they do not add up. Well for the taxpayer that is.
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@Fed up
This explains why Australia would not sign the TPPs.
http://www.theglobalmail.org/blog/hostile-environment-tpp-green-chapter-virtually-meaningless/807/index.html
Even Howard wouldn't sign them.
But the moron is prepared to sell Australians out in an attempt to show everyone how he can "negotiate".
I wonder if Abbott gets a kick out of leading well over 700 businessmen through Asia. Wonder what the bill is for the taxpayer. Noticed Abbott is back on the bike, and on the factory floor.
I do not believe, out Asian neighbours are taken in by such stupid acts. I bet they are having a good laugh behind his back.
No Margie, I suspect. Not been seen beside him, since he jumped off the stage, into his admirers on election night. One short appearance in Indonesia. Yes, was seen out during the GG celebrations but was kept well in the background. Not needed now.
Big build up, this week on Peta Credlin. She also remains out of sight now. Wonder why? Still there though.
“Nobody I’ve spoken to in the past 2 years had any idea that the government ”
Was well out in the public arena. We cannot help it, if many choose not to listen, Maybe are deaf.
Funny how many make decisions, without informing them selves of the facts first.
I am afraid many just cannot be bothered. Then it is the fault of Labor, when they get it wrong.
Many in this government seem to suffer from same complaint. All the things they accused Labor of, and intended to do themselves, has not been possible.
Trouble is, Labor beat them to it. Yes, there is o low hanging fruit left to pick. n spare PS to sack All been done, with years of Labor slow cut backs.
Abbott’s choices will indeed be hard. Much harder than he believed possible. Labor was not a big spender, or high tax government. This leaves Mr. Abbott in a very tight corner indeed.
“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…”
Well, yes – we do have an ETS with an initial 3 year fixed-price permits phase (the original 2009/2010 Rudd ETS was to have 1 year initial fixed-price phase).
But no – although just before 2013 election Rudd *planned* to move forward the floating-price phase to 2014, the amendments to the Clean Energy legislation were to be done if he wins the election. This hasn’t happened so, as it stands, the legislation has the commencement of floating-price phase still at 2015.
Explainer: ETS vs Carbon Tax vs DA ( http://goo.gl/9fotFM )
Also see ABC interview with Prof Ross Garnaut on this:
( http://www.youtube.com/watch?v=rJ12Q5zAvFM&feature=youtu.be )
Labor failed to sell their policies and they are not doing so now. Infighting screwed them. So many people were focused on the Rud, Gillard debacle that Labor had no chance of getting their message through. People were mad at the way Rud was rolled when Julia blew the transition. Rud came back to save us and fell in a heap. People were not listening while Abbott bleated on about that beastly redhead loaded up with fabricated lies, ETS and the big bad mining tax. Of course people had no idea about Labor’s policies. They weren’t listening and what is more are they now?
Labor screwed up. Now is another day and by hell Labor needs to start screaming at the top of their voices. Shorten lacks vibe and charisma and it still looks like the best person did not get the job once again. Sheesh I ask you why not just keep falling upon your right wing sword.
The party has to shape up. Look at how many progressives batted for Scott Ludlum and as for the Bullock farce what a home goal. We can keep on bashing on about Abbott as much as we like but it is the oppositions parties that need to get their acts together. This is a ridiculous farce. We desperately need Labor to get its act together and move out into the community.
@mars08 & john921fraser, I know what you mean. The promise to “keep the compensation but lose the tax” makes no economic sense (and was a lie as the Libs increased marginal income tax by lowering the tax free threashold).
It was simply another diversion tactic to appeal to those who can’t (or just won’t) think too hard about it. Watch him use it here to avoid exposing the truth about the way Direct action is supposed to work;
Pricing carbon is not just about giving existing industries an incentive to cut pollution, it is also about giving consumers an incentive to substitute paying for high pollution goods with low pollution goods especially in the energy sector by giving renewable energy an increased competitive edge over coal fired power stations. Ironically, under Direct action, not only can polluting industries once again pump CO2 into the sky free of charge but only polluting industries can qualify for a taxpayer funded handout- not renewable energy, thus giving coal another artificial advantage (the first one being the $5.5 billion/year subsidies already given to coal fired power).
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The moron Abbott gained a big following of like minded people when he rolled out his 3 word slogans … "stop the taxes" …. "stop the MRRT" …. and of course "cut the crap" when talking about climate change.
Apparently those "like minded people" are beginning to wonder who is going to pay for the taxes that must be replaced to feed Treasury tax collectors.
Joe "don't know" Hockey is telling them in no uncertain terms that it is them who will be making up the shortfall.
This nit picking (and ignoring the damage climate change will wreak) reminds me of the society matron on the Titanic, whining, “Does this life vest make me look fat?”
John right on.
Stop the taxes; destroy the manufacturing; blame the workers; expand the reserve, label it a debt, then blame Labor; get rid of the mining tax and slash welfare programs and so on. If Labor cannot make hay while the sun shines what can they do?
Hockey’s “everyone has to contribute” when mining (mining tax), corporate (destruction of manufacturing) and finance sector (tax on derivatives trades), (forgiveness for off shore tax havens) are being let off and manufacturing is being shut down is a gift to Labor if only they can use it effectively. I look at the hidden fear, covered by belligerence, on Hockey’s face when he made this statement because he knows it is a poisoned chalice. Keating never lived down the “recession we had to have” now make Hockey suffer the same criticism. Come on Labor they are handing it to you on a platter. The necessary points are continuously given broad exposure on this site and on on AI but where else is the noise.
Saw Bishop the younger on TV last night furiously trying to get mileage from Joe Bullock’s brainfart. It was proof, she insisted, that Labor was still a quarreling bunch of amateurs. Seems the LNP still think that story has legs.
And that surprises you from the party that is conducting a Royal Commission into Julia Gillard and the AWU slush fund and another into Kevin Rudd and pink batts?
There is plenty of internal dissent in the Coalition but Credlin calls the shots
Abbott’s climate change policy is bullshit – Malcolm Turnbull
Read more: http://www.smh.com.au/federal-politics/political-opinion/abbotts-climate-change-policy-is-bullshit-20091207-kdmb.html#ixzz2y9rwX51f
Time to dump costly parental leave scheme – Alex Hawke
http://ipa.org.au/publications/2173/time-to-dump-costly-parental-leave-scheme
‘Control freak’ Peta Credlin accused of pulling Coalition strings – Ian Macdonald
Read more: http://www.smh.com.au/federal-politics/political-news/control-freak-peta-credlin–accused-of-pulling-coalition-strings-20131204-2yqte.html#ixzz2y9sxRDMy
Liberal Wets hang out principles on asylum-seeker policy to dry
Read more: http://www.smh.com.au/comment/liberal-wets-hang-out-principles-on-asylumseeker-policy-to-dry-20140222-338ql.html#ixzz2y9vI3clc
Teresa Gambaro latest Coalition MP to support same-sex marriage
Abbott’s bitterest foes — his Coalition colleagues
There are at least 17 areas of current internal dissent in Abbott’s new Government
http://www.independentaustralia.net/article-display/abbotts-bitterest-foes-his-coalition-colleagues,6014
This mornings news in Sydney: The NSW State Government has decided it will deregulate pricing on electricity and gas prices …
Will this lower the price of electricity through retailer competition?
I would expect that price will remain as is for a period and then when everyone thinks things will be OK, pricing will increase as demand increases and resources become scarcer …
The NWS State Gov is just gearing up to sell off your power stations as Joe Hockey told them to do. This has nothing to do with you the customers. “Australia its all for sale” Abbott.
Correction :- NSW State Gov
My electricity charges went up but my supplier put the lines underground for quarter of a kilometer to my house so we are now safer from fire risk. Pity my insurancer didn’t reduce charges for the reduced risk. They put the lines underground because they couldn’t otherwise produce the supply voltage for which they were contracted. The above ground lines had been threaded through existing trees.
The intractable problem in capitalist dystopias is two-fold, in my opinion. First you have the psychopathology of the ruling elites and their servants in politics and the MSM. As has been pretty plain since time immemorial and has been elucidated by recent psychological research, these people are psychopaths. Capitalism preferences those without moral qualms over exploiting others and the environment in pursuit of wealth, and their greed is literally insatiable, so the problem will never go away, until The End, which, as we know, is really nigh. These people, as the reaction of the fossil fuel omnicidaires to the latest IPCC Report (in short, ‘Sod you all, we will do what we like and we like mining every gram of the stuff’)shows, will never cease destroying the planet in order to further enrich themselves.
And secondly, under ‘democracy’ in capitalist states, the precious ‘electorate’ consists, by definition, of creatures 50% of whom are of below median intelligence, and measures of knowledge, morality and any other attribute you care to mention, would show the same distribution. And when this dullard group is relentlessly brainwashed by a truly villainous MSM, with the Murdoch excrescence and the hate and fear-mongers of the talk-back radio sewer to the fore, is it any wonder that they vote out of ignorance, stupidity, greed and hatred of the constantly reviled ‘Greens’, and in doing so, condemn their own children to Hell on Earth. Moreover, the nature of this group in a dystopia such as ours, where the wretched misanthropy of the ruling Right has been projected onto society for decades, and where hatred and fear of others is so rife, where adversarial politics have become so nasty and unprincipled, where vicious laws to outlaw protest are proliferating like toadstools in the Rightwing regimes and where scapegoating of powerless minorities is so rife, makes me certain that, when denialism is no longer possible, when the catastrophe is, finally, undeniable that ‘pulling together’ will not be a priority and that the ‘bellum omnium contra omnes’ will break out with savage fury.
Well said Mulga. Mad Max here we come.
Dibs on the XB Coupe.
You notice the new you beaut trade agreement with Japan reduces tariffs on cars while not achieving anywhere near the concessions on beef etc achieved with Korea. They sold down manufacturing for their National Party buddies to swing benefits from trade agreements towards the rural low employment sector. Another own goal.
Holden “Made In Korea” thats not a Holden!
Thanks a lot Abbott.
There are still “nerds” like Billy Noir out there. Heaven help the “Lucky Country”. With know nothing “nerds” like Billy Noir, who needs the Abbotts, Pynes, Hockeys, Morrisons, et al anymore. Lets have an election, as soon as we get rid of Shorten and look at putting someone who has a bit of nous to fight the moron of 3 -word slogans. Marc Dreyfus immediately springs to mind. Incidentally I observed him on T.V. many years ago.
Marc Dreyfus for Australia’s next PM – now, we are talking sensible stuff … He’s a real Statesman, has great credentials, and is results driven to take action to ensure that all Australians are given a fair go … Marc, stand up and have a go the next time an opportunity arises for the LABOR party leadership if Shorten decides to step down …
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