tip off

The Coalition game of deterring renewables 
investment

The federal opposition’s self-appointed role under Tony Abbott as a sovereign risk machine is, at least politically, well understood. Not merely content with forecasting a looming apocalypse as a consequence of the carbon pricing package, Abbott has deliberately embraced the tactic of adding to business uncertainty with a cross-my-heart-and-hope-to-die promise that he would repeal the package.

With any luck, that will discourage business investment in renewables, undermine the trading period of the scheme, which is likely to start before he can pass legislation to repeal it, and continue to place some upward pressure on electricity prices by reducing certainty for big generators looking to roll over debt.

Not so good for either the economy or the task of decarbonising it, but eminently sensible from the point of view of an opposition that has embraced a wrecking strategy to undermine a weakened government. This is a longer-term strategy by Abbott, by the way — one of his first acts as leader was the appointment of Barnaby Joyce as shadow finance minister, from which vantage point Joyce proceeded to campaign against foreign investment (particularly Chinese foreign investment, a particular obsession of Joyce’s) and predict Australia was at risk of default.

Joyce these days likes to claim that somehow he accurately predicted the risk of debt ceiling debacle in the US, but he insisted Australia, too, would be unable to pay its debts. The Abbott opposition embraced sovereign risk as a political tactic right from the outset.

The two significant problems for the strategy are the issue of compensation for carbon permits and one of the direct action components of the package, the Clean Energy Finance Corporation. The latter is problematic because, even if Abbott’s warnings about repeal deter private investment in renewables, there’ll still be billions available via the corporation, to be overseen by Jillian Broadbent, who graced many a Coalition-appointed board with her presence in the Howard years.

The idea of taxpayers funding a vast renewables investment portfolio intended to produce a commercial return is the worst component of the carbon pricing package (of which, more later this week), combining the winner-picking of the Coalition’s risible direct action plan with significant risk for taxpayers (c.f. Barack Obama’s current problems with the Solyndra solar panels company). But that isn’t what concerns the Coalition, instead it’s the capacity of the corporation to drive renewables investment even after an Abbott-induced flight of investors.

That’s the basis for the remarks by Joe Hockey, as reported by Lenore Taylor today, to warn business off from even accepting investment from the CEFC. Hockey made the explicit point that loans could be “revokable at any time”, in essence suggesting that if any business should be foolish enough to accept investment from the corporation, it could be immediately ripped out by an incoming Abbott government regardless of the impact on jobs or the companies involved.

There’s a slight problem with that plan, in the melodramatic “at any time” bit. The CFEC governance structure, while still being designed by a panel of experts for the government, is intended to be independent of government, for obvious reasons. Hockey, in whose portfolio the corporation would be, would thus have to remove Broadbent and, presumably, most of the rest of the board and install some compliant directors who would oversee the withdrawal of existing investments, based on a new ministerial “statement of expectations”.

But standard practice for independent boards is that directors are only removable if they engage in criminal or wildly inappropriate behaviour, so Hockey would presumably have to wait until the Labor-appointed directors’ terms expired — a bit like the Howard government had to wait to for Justice Fisher’s term at CASA to expire when he and his fellow board members declined John Sharp’s demand that they quit en masse for the crime of being appointed by the Keating government.

Still, that’s a small detail for Canberra insiders that most investors are unlikely to be aware of.

And while the opposition likes to gloss over the issue of compensation for permits, preferring simply to demand that business not buy any (which may well be a subtle admission that, yes, they would indeed be property and require compensation), there was a most unusual intervention today on the issue from David Murray of the Future Fund, who proposed the genuinely bizarre idea to The Australian of two types of publicly created property rights — those created within three years, and those older than three years, so that governments couldn’t commit future governments.

Core and non-core property rights, perhaps.

Murray’s intervention in the debate is motivated by a simple fact: he’s a scientific illiterate and climate denialist and under him the Future Fund has tried its best to ignore climate change as a significant investment issue. Thus the phrasing of his remark to The Australian about “whether you believe in this stuff or not” — Murray definitely does not believe in “this stuff”.

Murray also opposes the carbon pricing package because “it’s very bad time given what’s happening in the global economy”. It’s a curious view for Murray to express, given that in August he was calling for massive budget cuts to “stabilise debt levels”. By that logic, Murray thinks prudent fiscal policy would be to rip the floor from under demand at the moment when the global economy is facing problems so bad as to undermine the rationale for carbon pricing.

Then again, we had years of strong economic growth before the GFC, and it was always apparently a “very bad time” to take action on climate change back then, too. People such as Murray will always find reasons to delay reform, like they always find reasons to dispute climate change.

His over-long term at the Future Fund finally ends on April 3 next year. Labor, oddly, reappointed him. Judging by Hockey’s remarks, that’s not a fate to which Jillian Broadbent can look forward.

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  • 1
    Peter Ormonde
    Posted Tuesday, 18 October 2011 at 1:41 pm | Permalink

    Welcome back Bernard. Don’t go away again.

    Core and none core property rights - just lovely.

    I think it is about time we considered changing Abbott’s position from Opposition leader to Lead Saboteur. The tantrum elevated to a political strategy.

  • 2
    D. John Hunwick
    Posted Tuesday, 18 October 2011 at 2:09 pm | Permalink

    I agree with Peter - welcome back and don’t go away again - my sanity can’t stand such a long absence of common sense and explanation. Perhaps you can explain why it is that the stupidity of Abbott and Hockey and others can’t be made crystal clear to a greater number of people - not on the basis of politics, but on the basis of clear argument and explanation. The hard won “carbon tax” must remain in place - ie withstand the assaults of Abbott et al - in order for the Planet to support us. What is it that they do not understand? Perhaps potential political candidates should take a scientif literacy test before being allowed to stand.

  • 3
    Microseris
    Posted Tuesday, 18 October 2011 at 2:16 pm | Permalink

    Not to mention Baillieu’s sabotage of wind in Victoria but all systems go for coal.

    Looks like O’Farrell may follow Baillieu’s lead.

    Could be part of the national Liberal strategy..

  • 4
    GocomSys
    Posted Tuesday, 18 October 2011 at 2:36 pm | Permalink

    Bernard, a breath of fresh air!

  • 5
    Michael Wilbur-Ham (MWH)
    Posted Tuesday, 18 October 2011 at 3:27 pm | Permalink

    The main problem with the Rudd/Wong/Turnbull CPRS was that it “locked in failure”.

    It did this by giving polluters long term property rights so that any future government who wanted to make greater cuts than what the CPRS was designed to achieve would have had to buy back the property rights of the free permits issued under the CPRS.

    Though I mentioned this problem with the CPRS many times as my main justification for saying that the CPRS was worse than doing nothing, I cannot recall a single response which accepted my justification.

    But now that property rights for permits can be used as a reason for saying that Abbott is wrong we get articles and comments talking about property rights.

    I’m sure that it would be much cheaper for Abbott to scrap the carbon tax than it would have been for a government to go from the CPRS to something closer to what the science says is needed.

    So now that property rights for permits is taken seriously, are then any Labor supports who will finally admit that this is why we are better off not having a CPRS?

  • 6
    davidk
    Posted Tuesday, 18 October 2011 at 3:46 pm | Permalink

    I am not often surprised at dispicable actions by the coalition but I was genuinely staggered at this eventuality. Not content with opposing ever initiative of this government and denying its’ mandate to govern at every turn, this disgusting opposition has moved to crucify business by increasing its’ risk in not only current, but future investments. I already believed Abbott, Hockey and Joyce to be imbeciles when it came to commerce but I would never have guessed the rest of the party would go along with such outrageous behaviour. I clearly underestimated just how evil these people can be. Imagine what they’ll do if they don’t get elected next time, legislate for national parks to be turned into nuclear waste dumps? Nothing is beyond them.

  • 7
    Kristen Smith
    Posted Tuesday, 18 October 2011 at 4:03 pm | Permalink

    or the task of decarbonising the economy’ what a laugh, only a true believer could write such drivel, it is almost beyond parody.

  • 8
    Michael
    Posted Tuesday, 18 October 2011 at 4:05 pm | Permalink

    @BERNARDO !!!

    You’re back?
    What a relief, the gumnuts have run riot whilst you were away.
    No leadership.

  • 9
    Aphra
    Posted Tuesday, 18 October 2011 at 4:44 pm | Permalink

    Despite the anti carbon tax campaign, the CEO of Rio Tinto, Sam Walsh, reports that they have just spent half a billion dollars (that is, half a billion dollars) on building a new generation power station in the Pilbara, which has immediately cut emissions by 35%. The company’s belief in climate change and environmental concerns - both management and employees Walsh says - is unshakeable. (The Weekly Review, p3, 19/10/2011 - Virginia Trioli’s column).

    I guess that Rio Tinto is either a true believer or employs a gaggle of dimwits.

  • 10
    zut alors
    Posted Tuesday, 18 October 2011 at 4:54 pm | Permalink

    …we had years of strong economic growth before the GFC, and it was always apparently a “very bad time” to take action on climate change back then, too. ‘

    It will never be a good time, let’s be frank. Very few people are prepared to put up with the necessary pain, cost, lifestyle adjustment or inconvenience. Initiatives will probably need to be imposed upon us.

    The reptilian Abbott and his spherical side-kick, Hockey, are behaving like irresponsible hoons. Or four year-olds. Their mission is to wreck and destabilise - these are not qualities of statesmen.

  • 11
    billie
    Posted Tuesday, 18 October 2011 at 5:06 pm | Permalink

    Didn’t British politics go through a period of Conservatives rip out Labour policy then Labour rip out Conservative policies in the 1960s and 1970s. Didn’t this activity trash the UK economy, so that economic activity was at its lowest and inflation was at hits highest in 1976, then Maggie Thatcher got in.

    Abbott’s toxic negativity will just trash the domestic economy making life tougher for the average person. Won’t effect the multinationals who will continue to invest or not depending on global conditions.

  • 12
    Simon Mansfield
    Posted Tuesday, 18 October 2011 at 5:33 pm | Permalink

    OMG - the Neo Greenist is back with more of his whacky Green is the new God meets neo liberalism kool aid.

    As usual our resident failed Green candidate MWH conveniently ignores the critical part of BK’s article where he trashes the Clean Energy Finance Corporation as a shocking example of governments taking direct action instead of leaving it to the market.

    This of course was the bolt-on part to the CPRS Mark 2 policy - which just like CPRS Mark 1 could have been added on at anytime to the keep them new age Green Capitalists happy.

    But as usual MWH misses the key real politic part of the ETS debate and its implementation - which is that if the original CPRS had been supported by ever so politically correct Greens - it would be done and dusted and we would be debating the next phase of our national response to carbon reform.

    Like BK the Greens actually think that it will cost less than 100 billion to do something about C02 emissions. So much so that after reading BK and his beloved Greens you could almost conclude that a market based solution could do it for free. 100 billion dollars is what the internationalists what to give the developing world EACH YEAR under the next global climate deal.

    In short, the voodoo economics of low cost carbon reform is the new kool aid for BK and his merry mates at the Greens - when he’s in agreement with them.

    But alas BK has invented a whole new mantra of Green Politics on the left hand and Neo Liberalism on the right hand. A true disciple of modern Canberra.

  • 13
    maccas
    Posted Tuesday, 18 October 2011 at 5:52 pm | Permalink

    When we were all told to clean up our car emissions no-one whinged ,why is the air in our cities any different. Poluters know they can ,and should clean up their act and I don’t hear too many of them complaining, as is said in some of these comments to-day, some have started, so what’s up Tony besides hot air and dummy spits? Macca

  • 14
    Michael Wilbur-Ham (MWH)
    Posted Tuesday, 18 October 2011 at 5:54 pm | Permalink

    Simon Mansfield’s response to my earlier post is full of personal insults - which suggests that he has no rational rebuttal.

    He calls me a “failed Green candidate” because in one of the most blue ribbon seats in Australia I failed to beat Costello. I never expected to win, but I’m proud that I put so much work into what I believed in.

    Simon misses my main point - that just as property rights over emission permits mean that it would be very expensive for Abbott to scrap the carbon tax, property rights over emissions would have made it impossibly expensive for Australia to make the large cuts that the science says is needed if the CPRS had been passed.

    Since Stern, and in the Australian context Garnaut, we have known that the economic cost of not tackling climate change is far greater than the cost of moving to a low carbon economy.

    Perhaps if Simon removed the insults from the rest of his post I might understand some other things that he is saying.

  • 15
    nicolino
    Posted Tuesday, 18 October 2011 at 6:10 pm | Permalink

    Abbott, Hockey and the rest of that rabble will have us all back to coal before you can blink an eye. They really can’t, or don’t want to acknowledge which is fairly plain to the rest of us of what is happening with our climate.
    Just ask the people of Tuvalu for starters.

  • 16
    Michael Wilbur-Ham (MWH)
    Posted Tuesday, 18 October 2011 at 6:16 pm | Permalink

    Yet whilst the opposition are doing everything they can to prevent action on climate change,
    their policy is for the same cut in emissions as Labor intend (a measly 5% on 2000 levels).

    I would love to know what those who support Abbott expect him to do if he gets into power -
    1 - spend huge amounts of money in direct action to meet the 5% cut figure that is his policy, or
    2 - become a LIAR and renege on the 5% figure.

    I’ll expect option 2, and I very much doubt that anyone who now says that Gillard is illegitimate because of the Carbon Tax will maintain the same argument when Abbott scraps his policy once elected.

  • 17
    Simon Mansfield
    Posted Tuesday, 18 October 2011 at 6:47 pm | Permalink

    So calling MWH a failed green candidate is a personal insult - more like a statement of fact. As usual MWH ignores the parts he does not like such as BK saying that the Clean Energy Finance Corporation is a waste of money. While continuing to ignore the obvious economic idiocy of saying that a market based solution is going to be cheaper than direct action. Seriously how can it be any cheaper. A power station costs what a power station costs. No wave of a magic wand is going to make it any cheaper. But according to the proponents of the ETS it will be cheaper to retro fit our entire energy system by having a system of tradable pollution permits rather than actually building cleaner power stations. Voodoo economics meets the Green Godzilla. As to insults BK bases most of he writes on insulting people he does not agree with. Just look at what he wrote about Penny Wong for two years.

  • 18
    Michael Wilbur-Ham (MWH)
    Posted Tuesday, 18 October 2011 at 6:59 pm | Permalink

    What a strange world we live in when right wing loonies claim that progressives (I don’t think of myself as left) are looney for supporting a market based system (which just happens to have the support of pretty much every economist), and the right wing looney is supporting direct action, which is government controlling the means of production.

    This would be funny if it was not proof of how silly things have become.

  • 19
    Simon Mansfield
    Posted Tuesday, 18 October 2011 at 7:26 pm | Permalink

    So I take it Michael that like BK you are also opposed to the Clean Energy Finance Corporation? As according to BK that’s an example of direction action - which is bad.

  • 20
    Michael Wilbur-Ham (MWH)
    Posted Tuesday, 18 October 2011 at 7:34 pm | Permalink

    I’m not commenting on the Clean Energy Finance Corporation because I’ve not looked into it.

    Would you like to provide a rational response to any of points I’ve made?

  • 21
    TheTruthHurts
    Posted Tuesday, 18 October 2011 at 7:52 pm | Permalink

    What a strange world we live in when right wing loonies claim that progressives (I don’t think of myself as left) are looney for supporting a market based system (which just happens to have the support of pretty much every economist), and the right wing looney is supporting direct action, which is government controlling the means of production.”

    LOL…. just LOL!

    If it’s a market based system why are people being compensated? And why are poorer people being compensated more then others? Thats called wealth redistribution, not a market system.

  • 22
    snoozer289
    Posted Tuesday, 18 October 2011 at 7:56 pm | Permalink

    At what point do the MSM take some responsibility for reporting and persuing the facts and truth with regards to the impact of such policy decisions.

    They claim to be the gate-keeper of truth and justice in our policatical system, but when it comes to showing any responsibility to informing and reporting to the people at large they have gone missing.

    Will they along with the opposition take responsibilty for the decisions they have made or will they just turn around and point the finger at somebody else and treat us like fools.

    No wonder people do not want to take responsibilty or show respect when we have a MSM who cry foul when challenged but will not show respect or responsibility to the people they are suppose to inform.

    No Morals,

  • 23
    Michael Wilbur-Ham (MWH)
    Posted Tuesday, 18 October 2011 at 8:02 pm | Permalink

    @Snoozer289,

    One casualty of the political circus is that we are not hearing from those who know that we need cuts of over 40% by 2002 for Australia to play its part in limiting the temperature increase to 2 degrees.

    Instead we have the climate change deniers, and the Abbott supporters (who fail to let us know whether they expect option 1 or 2 presented in my earlier post).

    And on the other side we have the Labor supporters who pretend that the carbon tax is taking action (when it is really far too little far too late for Australia to be able to say that we did our bit).

    @TTH, I agree that the compensation is wrong - but is is not the right that are harping on about people being worse off? And why are the poor being compensated more than the rich, perhaps because the poor cannot afford it and the rich can?

  • 24
    Simon Mansfield
    Posted Tuesday, 18 October 2011 at 8:28 pm | Permalink

    MWH - how can you call a government designed legal system for trading pollution permits a market based system. Like almost every aspect of our society it’s a government ordained system that is imposed on society as a solution to a problem.

    The whole problem with carbon emissions is that no company is going to change its activities unless forced to by government. It’s just direct action by another name. ie the government is intervening in what is perceived to be a failed market situation and imposing a new regulatory environment that will use publicly issued pollution permits that can then be traded on a regulated market.

    Given we live in a mixed economy I’m quite okay with having a mixed economy approach to the solution, but that does not seem to fit with BK’s view of the situation. Hence his opposition to the Clean Energy Finance Corporation.

    In the meantime, I really suggest you read up on the Clean Energy Finance Corporation - it’s the very centerpiece of the Greens policy for CPRS Mark 2 - and pretty much the whole reason they are going to vote for the deal now on the table.

  • 25
    AR
    Posted Tuesday, 18 October 2011 at 8:48 pm | Permalink

    Krudd’s CPRS was a bloodless bureaucrat’s idea of carbon reduction. The ETS will be a shyster’s bonanza for a risible reduction, 5%, if any once the carpet baggers have done their dirty deeds.
    The sad thing is that a country gets the government it deserves. Worse is that I get it too.

  • 26
    Peter Ormonde
    Posted Tuesday, 18 October 2011 at 8:52 pm | Permalink

    Simon

    Don’t really want to wade too deeply into this raging river but - well, when you think about it, money itself is a government ordained system imposed on society to solve a problem, yes? That’s why our ultra modern plastic $5 notes have got Betty Saxberg Gotha’s grimacing dial plastered all over them and not Gerry Harvey’s.

    Permits operate in exactly the same way … whether for water allocations, or air pollution or CO2… essentially a thing is limited (yes by the Government), permits are allocated (initially by the Government again) and can be traded (by private investors and polluters who need a licence to pump the effluent out).

    So no, it’s not market-based in the sense of being created by the market - remember it’s markets and unpriced externalities that get us into these messes in the first place.

    But the critical thing about these market schemes is the trading of permits between those who have them and those who need them. So the non-polluting operators get cash and the polluters get costs. Over time - something the panic merchants seem to have trouble with - this pressures the polluters to lift their game and stop it, or loads them up with extra costs. More importantly it provides an indirect injection into non-polluting industries and sectors of your economy.

    Has worked quite well in reducing acid rain in North America and more locally with coal miners pum ping salt water into the Hunter River for example.
    Of course whether the current CO2 scheme can do enough of this quickly enough is another can of worms entirely.

    But it’s important to realise that compensation for consumers and so forth is incidental - rather important if you are paying of course - but the central focus of the scheme is not on changing consumer behaviour but in sending economic signals into the markets and altering producer behaviour. And the way that these signals are transmitted is through a new market in permits… hence market-based.

    Hope that helps a bit…. think of it as an eddy in this raging torrent.

  • 27
    Simon Mansfield
    Posted Tuesday, 18 October 2011 at 9:25 pm | Permalink

    Peter I mostly agree - I just think it’s BS that the ETS is the only solution and actually doing something like building cleaner power systems paid for by governments aka direct action is by default bad and won’t work.

    It’s logical that only direct action will ever fix anything and that’s why Abbott called his window dressing policy - direct action - as at the end of the day its a classic logical solution.

    For BK to oppose the Clean Energy Finance Corporation he should also oppose the NBN and while he’s at it the Aged Pension as both are effectively market interventions - and if one is bad policy then it stands to reason they are all bad policies. But maybe it’s just another case of 4 legs good 2 legs better thinking.

    Moreover, and why the Greens make me what to puke - is that we seem to live in age where we can externalize all our problems and blame someone else - in the case of carbon emissions we eternalize responsibility for our own pollution by calling it the fault of “the big polluter” - when without the consumer ie us - there would be no big polluters.

  • 28
    Michael Wilbur-Ham (MWH)
    Posted Tuesday, 18 October 2011 at 9:32 pm | Permalink

    Simon, the only way that it would be possible to cut emissions to the extent that the science says is needed is by government legislation and action.

    Leaving action to just individuals is doomed to failure.

    Where individuals do make a difference is that they elect governments.

    But do you accept the science and think that we need to take action?
    Or is this just debating for the sake of trying to make the non-right look bad?

  • 29
    Simon Mansfield
    Posted Tuesday, 18 October 2011 at 9:46 pm | Permalink

    So on that basis Michael I take it you do support massive direct action by government to fix our energy systems.

    BTW it’s hilarious you automatically lump me in with the loony right. I’ll be dining out on that for months.

  • 30
    GocomSys
    Posted Tuesday, 18 October 2011 at 9:48 pm | Permalink

    How others view our decision to put a price on pollution:
    http://www.guardian.co.uk/commentisfree/2011/oct/12/carbon-tax-australia

  • 31
    Michael Wilbur-Ham (MWH)
    Posted Tuesday, 18 October 2011 at 9:54 pm | Permalink

    Labor and Liberal are so close together on so many things it is sometimes hard to know from one post whether someone is locked in Liberal or locked in Labor :)

    As you have asked my views on more direct action, I do think that government should subsidise emerging technologies which don’t already have major industries behind them. So, for example, geothermal and some solar should be funded, whilst coal capture should be funded by industry.

    Also, as carbon is still not priced according to its economic cost, it makes sense in the early days of any scheme to make up for this imbalance by using income from the too low carbon taxes to subsidise green energy which would be economic if carbon was priced to cover its costs.

    Unfortunately neither Labor nor Coalition have any intention of taking enough action to prevent severe climate change, but as most people vote for these parties I guess we will get what we deserve :(

  • 32
    TheTruthHurts
    Posted Tuesday, 18 October 2011 at 10:53 pm | Permalink

    @TTH, I agree that the compensation is wrong - but is is not the right that are harping on about people being worse off? And why are the poor being compensated more than the rich, perhaps because the poor cannot afford it and the rich can?”

    Back hang on you lefties say this is a tax on CARBON.

    Therefore your income should be irrelevent. Those who use more carbon pay more then those that use less carbon. Thats how it’s meant to work.

    Instead the poor are told they can pollute more because the government will give them lots of compensation and those that make more money get less compensation. Sounds like a tax on wealth to me.

  • 33
    Barbara Boyle
    Posted Tuesday, 18 October 2011 at 11:04 pm | Permalink

    Yes, welcome back Bernard, I look forward to your reporting of the latest antics from the great trio AH&J. There is a deadly fascination in waiting for the latest word from the Opposition leader. Can’t wait to see which way Business jumps in response to these instructions. And, also, which way will the Electorate respond to this display of leadership/ It’s a test for the nation, indeed.

  • 34
    Fran Barlow
    Posted Tuesday, 18 October 2011 at 11:16 pm | Permalink

    Back hang on you lefties say this is a tax on CARBON.

    Actually we don’t. We say that it is a price on carbon.

  • 35
    Oscar Jones
    Posted Tuesday, 18 October 2011 at 11:44 pm | Permalink

    It’s an interesting concept of Abbott’s-the current government is just an entity warming the seat until the legitimate Liberal Coalition to take their rightful place at which time everything is undone.

    The very idea that Barnaby Joyce is promoted to any office of importance is a national disgrace. Sadly the joke’s on us.

  • 36
    StrewthAlmighty
    Posted Wednesday, 19 October 2011 at 12:28 am | Permalink

    MWH

    Just wondering:

    What is the economic cost of carbon at the moment? AND

    What action would be necessary to prevent severe climate change? (not sure whether this means prevention of climate change that would be severe OR limiting climate change to a less severe form but the question holds either way)

    OJ

    At less than 30% primary vote for Labor he might actually be right.

    Just remember though that he is arguably doing the right thing by the Labor diehards on this one. If he gets in and scraps the Carbon Tax do you really want him paying out billions in compensation to large corporates who have bought up bucket-loads of garbage foreign carbon tax offsets?

    FB

    I think we previously agreed that it was a “Govt imposed fixed price levy” on Carbon, but certainly under no means it is a tax!

  • 37
    GocomSys
    Posted Wednesday, 19 October 2011 at 6:29 am | Permalink

    The problem is that the “gutter politics” of Abbott & Co is supported by the “gutter press” and tolerated and/or given credence by the general media. It is a credit to the government to continue functioning as well as his has in such a toxic environment.

  • 38
    Michael Wilbur-Ham (MWH)
    Posted Wednesday, 19 October 2011 at 9:08 am | Permalink

    The Guardian article is interesting.

    One thing it gets wrong is how Europe and Australia will compare on carbon reduction. Australia is now only aiming for a 5% reduction on 2000 levels by 2020. Europe has, I think, already achieved cuts greater than our 2020 target.

    The other bit that leapt out at me was the line that once the tax is in place “Hopefully over time this will boost Labour and the Greens’ popularity, so ensuring that the policy is protected”.

    In Australia the MSM (including the ABC and The Age) would just write “boost Labor’s popularity”.

    @STREWTHALMIGHTY - I’m out of date on the latest figures, but the following is about right:

    Though there are taxes on fuel at present, none of these are aimed at putting a price on carbon. Also both Liberal and Labor have maintained huge subsidies for fuel (e.g. company cards, farming and mining). These subsidies are sort of an anti-price on carbon.

    The political circus had distracted us from real debate for so long that I have no idea of the view of either major party as to what level of future warming they think is acceptable. At the time of Rudd winning the election the figure of 2 degrees warming was often mentioned, but I don’t think either Liberal or Labor committed to this figure. Reports such as Garnaut have lots of detail about what is predicted for 2 degree warming, and it can easily be argued that these effects are so bad that we should limit warming to a lower level.

    For Australia to play its part in limiting warming to 2 degrees we would have to reduce our emissions by about 40% on 1990 levels by 2020 and by over 80% on 1990 levels by 2050.

    Note that as carbon stays in the atmosphere for a long time the early reductions are vital for limiting temperature increases.

    The political reality in Australia and the rest of the world is such that we are now pretty certain to have two degree or higher warming by 2100.

    Also note that the science has all been very conservative, and there are plenty of things that are not well enough understood to be put into the IPCC reports which, if they happened, would lock us in to much faster warming.

    All rather depressing.

  • 39
    Blaggers
    Posted Wednesday, 19 October 2011 at 9:59 am | Permalink

    With any luck, that will discourage business investment in renewables”
    This has to be the sadest, most upsetting statement/outcome ever. The NOpposition should hang their heads in shame. Claiming to be for business, yet causing pause for investment. Oxy-morons!

    Then again, we had years of strong economic growth before the GFC, and it was always apparently a “very bad time” to take action on climate change back then, too.”
    The surplus they keep trumping on about. This is their failure to invest in our future. This is the previous governments legacy: bury your head in the sand. It would seem to be their main policy. We should have been the leaders in solar and wind technology, selling this stuff instead of now having to import it all.

    Surely an NOpposition that is this disruptive, childlike needs to be removed. We Australians cannot and should not be beholden to such antics.

  • 40
    Lord Barry Bonkton
    Posted Wednesday, 19 October 2011 at 10:35 am | Permalink

    The Fiberal party are just a bunch of 3 yr old brats .

  • 41
    Fran Barlow
    Posted Wednesday, 19 October 2011 at 1:59 pm | Permalink

    FB: I think we previously agreed that it was a “Govt imposed fixed price levy” on Carbon, but certainly by no means it is a tax!

    Whoever you agreed that with, it wasn’t me. The interim fixed price permit phase of the ETS is well documented.

  • 42
    Michael
    Posted Wednesday, 19 October 2011 at 2:10 pm | Permalink

    @FRANCESCA B

    Thanks for clearing that up. It’s a load off.

  • 43
    StrewthAlmighty
    Posted Wednesday, 19 October 2011 at 5:51 pm | Permalink

    So can we call it an “interim tax”? And if we slide past the proposed review date can we just call it a “tax” full stop?

    Whilst on the topic I would like to object to the use of the phrase “income tax”. It is simply an “interim fixed price permit on income” that is yet to come up for review….

  • 44
    StrewthAlmighty
    Posted Wednesday, 19 October 2011 at 6:03 pm | Permalink

    MWH

    No problem with getting rid of the Govt subsidies but it seems as though it is fair to say that there is no verifiable “economic cost of carbon”?

    By my second question I meant more what physical steps have to be taken? Let’s not kid ourselves that we have some sort of control over the number of degrees we can limit global warming to the point is what steps do we need to take in your book to prevent it? Both domestically and internationally.

    Based on your percentages above (say the 80% by 2050) it sounds like each individual needs to be cutting their individual CO2 emissions by 90% by 2050 (assuming double population approx). What steps are needed to achieve this?

    I would have thought at the least to get these sort of numbers we are talking shut down of all fossil fuel based power generation, serious restrictions on transportation, prohibition of various foods? Internationally are we talking trade embargos against all countries that allow fossil fuel generation?

    This I believe is the dishonesty of the Greens approach to this issue. All the talk is in percentages and years (due to the obvious camouflage that this provides) whereas the real question is what actions the Greens believe need to occur.

  • 45
    Posted Wednesday, 19 October 2011 at 6:23 pm | Permalink

    B KEANE: Welcome back.

    SIMON MANSFIELD: I don’t wish to get involved in your argument with MWH, but when he says he stood against a Liberal party member in a blue ribbon seat he wasn’t understating the problem. I’ve lived in the electorate of Higgins all my life. Not once has anyone but a Liberal Party member ever won; it would be a miracle on the scale of miracles for any other party to win it.

  • 46
    Michael
    Posted Wednesday, 19 October 2011 at 7:09 pm | Permalink

    @BERNARDO

    I’m glad you’re back mate, I missed your chumpy waffel.
    But I notice that every now & again, you resume your role as moderator.
    Not good.
    I may be speaking for myself but I quite enjoy a freeflow of profanity, deafamation & character assassination.
    Such a relief after 12 months of Gillard/Brown generated selective censorship.
    ANARCHY RULES IN CRIKEY!!!!
    And that has to be a good thing.

  • 47
    freecountry
    Posted Thursday, 20 October 2011 at 1:08 am | Permalink

    It’s a pity Barry O’Farrell didn’t give similar warnings in Opposition about the NSW solar rebate scheme, at a time when cynical opportunists across the state (including many hypocritical climate sceptics) were rushing to get their taxpayer ripoff installed on their roofs ahead of the NSW election.

    Democratic states around the world are staggering under the weight of legacy economic regulations, tax breaks, populist concessions to battles long forgotten, and half measures which were never cleaned up even when they were superceded. Just one example in Australia is the half-baked mandatory renewable targets and other direct-action climate policies. These were always known to be inefficient, even before the Productivity Commission estimated they cost us up to a thousand dollars per tonne of CO2 abatement. That was one of the main reasons for a secular carbon pricing scheme.

    Yet these schemes are not only being kept, but expanded. As Bernard concedes, the $10 billion Clean Energy Finance Corporation will now be funded by the carbon tax. Much of the compensation money to households will be funded not by carbon revenue but out of the budget. None of the inefficient pre-carbon-tax schemes are being axed.

    A strange reality of modern democratic systems is that they find it much easier to enact new laws than to clean up old laws. Tony Abbott may not have any such overarching view of these things — he just wants the carbon tax gone, any way he can — but if it sets a precedent that the country doesn’t always have to keep adding to the baggage of its past legislatures without ever putting something down, then that could be a good thing.

  • 48
    StrewthAlmighty
    Posted Thursday, 20 October 2011 at 8:54 am | Permalink

    Freecountry

    What we need are “sunset” dates on all legislation. As you say - politicians are prone to legislate rather than repeal.

    As far as I am aware the Liberal Democratic Party is the only party with a policy of requiring sunset dates.

  • 49
    Posted Thursday, 20 October 2011 at 9:29 am | Permalink

    STREWTH; Isn’t that called a sunset clause?

  • 50
    StrewthAlmighty
    Posted Friday, 21 October 2011 at 11:50 am | Permalink

    Venise

    Yes the clause that contains the sunset date is called a sunset clause.

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