Would you buy a car from this man?

Kevin Rudd has used his trip to Japan to do a little shopping. For $35m, he has picked up a handy multi-purpose commitment from Toyota to manufacture hybrids at Altona.

Multi-purpose because this can be invoked for all sorts of purposes. It demonstrates the Government’s commitment to running an Australia that makes things – regardless of the business welfare or protectionism required. But it also ensures the Government looks like it is Doing Something about climate change, while waiting for Garnaut.

Not to mention Rudd can now point to the vehicle as another “at the margins” means to address the now era-defining issue of high oil prices.

The Opposition will have no choice but to applaud. Three times yesterday on Insiders (doing its best to balance the ABC’s left-wing reputation by spending nearly the entire hour bagging the Government), Julie Bishop was asked if the Coalition would support lowering tariffs. Three times she ducked the question and talked about listening to the Productivity Commission. It’s a peculiar look. The party of rugged individualism, of decisive action and dislike of bureaucracy, insisting that a bunch of public servants should be paid homage.

But on recent form there’s next to no chance the Coalition will urge reductions in the level of protection supporting our cosseted car industry. Older hands will still remember Keating’s “Captain Zero” taunt at Hewson.

Then again, the Prime Minister has switched back to populist mode himself on oil, demanding the “blowtorch” be applied to OPEC. It’s not clear what blowtorch Rudd actually means, but if there is one at the moment, it’s entirely in the control of people who sell oil, and it’s aimed at those of us who buy the stuff. OPEC, naturally, has done what every producer historically has done at times of huge price increases, and blamed “speculators”, although it’s good to see even OPEC is now too PC to come out and say it’s the fault of the Jews.

Rudd is back in Japan in early July for the G8 outreach meeting. Instead of using it to bitch about OPEC, Rudd should swap notes with the 15 others leaders there as to how to deal with the political problem of rocketing fuel prices. They’re all in the same boat. Japanese Prime Minister Fukuda may not be particularly fussed about being forced out of office between now and then.

Back home, the pressure to omit petrol from the emissions trading scheme will ratchet up with every oil price spike. Energy-intensive industries are probably watching with alarm. They are already campaigning to be excluded from the trading scheme, or to be given free permits, and the removal of an entire sector like transport would significantly reduce the chances of other sectors being exempted.

Either way for consumers, this is a zero-sum game, because the cost of carbon abatement has to be met one way or another. Guy Pearse has noticed that ABARE – not exactly known for its environmental credentials – stated that the removal of energy-intensive industries from a trading scheme would double the eventual carbon price which would be paid by other sectors and households.

In developing the GST, Peter Costello correctly resisted pressure for exemptions or special treatment under the new tax system, sought by dozens of mendicant sectors or industries pleading how they were “special”. He understood that once you handed out one exemption, the pressure would build for more, and that each step would undermine the effectiveness of the GST.

The Prime Minister needs to display similar strength and commitment to policy purity – not for its own sake, but to maximise its economic and carbon abatement efficiency. It will be hard in the face of populist stunts from the Liberals, but the Government has to point out that, regardless of who gets exempted, we’ll still have to pay up the same.

14 Comments

  1. Marilyn
    Posted Tuesday, 10 June 2008 at 5:58 pm | Permalink

    Venise if you voted for the ALP dear you would know how to spell the name.

  2. Bernard Keane
    Posted Tuesday, 10 June 2008 at 8:23 pm | Permalink

    In the interim I will talk a lot louder on the phone.

  3. Philip Hunt
    Posted Tuesday, 10 June 2008 at 7:51 pm | Permalink

    Canberra Calling is a great idea. But you need to do something about the audio quality. Use SKYPE or some other method and get the balance right between the interviewer and Bernard. It’s impossible to listen to in the car because the interviewer is shouting, and Bernard is whispering. For an example of how to do it, go listen to Windows Weekly. I believe they just record a SKYPE conversation.

  4. Venise Alstegren
    Posted Wednesday, 11 June 2008 at 10:21 pm | Permalink

    Marilyn, darling. I take it that you object to the way I spelled Labour. Silly me! I keep thinking ‘Labor’ is a crass Americanism. I hope you, as in “U” do not doubt that as a LABOUR voter I am becoming very disenchanted with the our dear boy from the deep north-our bum of the fleightlebee-. Our reverse iceberg; seven eights of it is above the surface, the last eight being under water. Certain to capsize.

  5. Matthew
    Posted Tuesday, 10 June 2008 at 6:24 pm | Permalink

    Display similar strength and commitment to policy purity so as to maximise economic and carbon abatment efficiency?????? Is Bernard Keane moonlighting as Kevin Rudd’s speech writer????

  6. Marilyn
    Posted Tuesday, 10 June 2008 at 8:43 pm | Permalink

    But who will hear the asylum seekers?

  7. Hybrid Hubris
    Posted Wednesday, 11 June 2008 at 11:41 am | Permalink

    Fantastic news ….. we pay $35M to Toyota so they can import hybrid drive trains and bung them into a Camry body shell. What will we learn about hybrid technology? Nothing of any value.

    To make it even better, this technology is already close to 10 years old and by 2010 will be completely old hat as GM bring out the plug in hybrid Volt, Mitsubishi release the MIEV electric car and Toyota bring out their next gen plug in hybrid technology etc etc.

    Old gen hybrids can do about 2km on battery power, next gen ones will do closer to 70 before the engine fires up to recharge the batteries.

    The $35M would be much better spent convincing GM to built a Volt drive train plant here or Toyota to build their plug in hybrid drive train here.

    Still at $35k subsidy per car, I can hardly wait to buy one for, what $7,000 (?) as befits the value of what will by then be a museum piece of early hybrid technology.

    Oh, and Toyota have been selling Hybrid Camry’s in the US now for quite a few years. Both GM and Ford have existing hybrids in production in overseas markets. The fact they haven’t brought them here shows they know that the game is build dinosaurs and wait for a government handout to bring existing corporate IP to bear in Australia. Their CFOs must be laughing fit to bust.

    If we must do policy on the run, it is better done whilst taking a deep breath Kevin, else we will end up as a cargo cult.

  8. JamesK
    Posted Wednesday, 11 June 2008 at 9:50 am | Permalink

    Toyota was given $35 million from the Federal Government’s $500 million green car innovation fund plus $20 million in perks from the Victorian Government to build 10,000 hybrid Camrys each year at its plant in Altona, Victoria, starting in 2010. Victoria promised to buy 2000 of the cars for its fleet without knowing the price!.
    Mr. Keane’s response: “It will be hard in the face of populist stunts from the Liberals”
    Are you sure Bernard?

  9. Kez
    Posted Tuesday, 10 June 2008 at 10:18 pm | Permalink

    Is that some kind of joke, Marilyn?

  10. Bernard Keane
    Posted Tuesday, 10 June 2008 at 4:38 pm | Permalink

    Agree entirely Marilyn. WHEN will we stop the genocide?

  11. Bernard Keane
    Posted Wednesday, 11 June 2008 at 7:44 am | Permalink

    Kez, genocide is no joke, mate.

  12. Jonathan at Crikey
    Posted Tuesday, 10 June 2008 at 8:10 pm | Permalink

    You’re right re Canberra Calling Phillip. It’s a great act, but it’s still go a few bugs etc. We’ll work at it. Skype to Skype was even worse than the Skype to phone alternative you may have struggled with today. Something to do with the quality of the broadband connection to Parliament House. This should not surprise. Memo Sen Conroy …

  13. Gaia
    Posted Tuesday, 10 June 2008 at 8:42 pm | Permalink

    What a sucker of a PM we’ve got. Has anyone noticed it’s no longer ‘Global Warming’ and now it’s called ‘Climate Change’. Why is it I smell another scam…and a tax wrapped up in b*shi*t? Does anyone remember Y2K and computer Armageddon? My child came home from school saying the ABC website has a kids CO2 page saying she needs to die now to reduce her carbon foot print ! Has anyone seen http://www.abc.net.au/science/planetslayer/greenhouse_calc.htm

  14. Kez
    Posted Wednesday, 11 June 2008 at 1:11 pm | Permalink

    Sure, thanks Bernard. Just wondering what “who will hear the asylum seekers?” really had to do with your article.