"At at a time when we need non-mining investment as the resources investment boom slows, Warburton and his cronies are content to blow up estimated billions in investment ... "And there was no mention of the greatest threat to investor certainty under current debate: the Coalition's assault on the Renewable Energy Target. That's the RET that the Coalition swore on a stack of bibles before the election that it would keep -- it was, after all, a Howard government policy -- which it is now setting out to gut. Gutting the RET will kill over $10 billion worth of investment and the thousands of jobs associated with it at the exact moment that policymakers are trying to manage an economy with falling mining investment and soft employment. It will also kill one of the few high-tech industries that Australia has a huge comparative advantage in, in areas like solar power. It's also -- courtesy of the direct contradiction between what the Coalition promised before the election and what it has done since then -- an elegant example of sovereign risk, in the proper sense of that much-misused term. Not the "sovereign risk" continually claimed by the mining industry, which is basically any regulatory change it disagrees with, but the real thing -- investors having made decisions based on what the Coalition said before the election will now find they have lost their money as it moves to gut the scheme. Climate denialist businessman Dick Warburton doesn't like the term "sovereign risk" when it comes to gutting the RET -- his review prefers the term "regulatory risk". But what exactly the difference is isn't spelt out. Where's the business community to lament this sovereign risk and complain about the impact on investment? Where are the business economists to note that gutting the renewables industry is directly at odds with the "open for business" mantra that we used to hear from this government? Of course, if Labor had appointed Bob Brown to review mining industry subsidies and then proceed to remove them without consultation, you would still be hearing the shrieks from the business peak bodies. Actually the silence wasn't total -- the creeps and rentseekers of the Minerals Council welcomed the review, and the Australian Aluminium Council welcomed it as well -- hilariously, that's the industry that has received hundreds of millions of dollars in taxpayer subsidies in recent years. At at a time when we need non-mining investment as the resources investment boom slows, Warburton and his cronies are content to blow up estimated billions in investment, the sort that slots into the broad "other selected industries" group in the Bureau of Statistics quarterly investment data, the latest of which, for the June quarter, was issued yesterday. That showed a 12.2% rise in expectations for investment for this group to more than $55 billion, compared to a year ago. That should see it top $65 billion, compared to just over $58 billion for 2013-14 -- exactly what we need as the mining boom cools down. But that's without the decision to gut the RET. What's Warburton's argument for dumping the RET? Not that it increases power prices -- the review is reluctantly compelled to admit the RET places downward pressure on wholesale electricity prices and, in the long run, will see lower prices for consumers. No, it should be gutted because in the presence of lower-cost mechanisms for driving carbon abatement, it's not necessary. That's a sound argument -- similar to Ross Garnaut's, who said that an RET wasn't needed if you had a functioning carbon price. Of course, we no longer have a carbon price -- the old white male climate denialists got rid of it. There are no lower price abatement measures on the horizon. Even if Greg "like a rolling stone" Hunt's Direction Inaction scheme gets up, we know from the experience of similar schemes during the Howard years that the cost of abated carbon will be hundreds of dollars per tonne. Except, we know the real reason why the government wants to gut the RET -- it has an ideological obsession with destroying renewable energy, regardless of the facts. It associates renewables with the Left, and therefore renewables must be destroyed, regardless of the investment and jobs that it will destroy along the way. And the business community stays silent.
The strange silence of the business community on the gutting of the RET
The business community is oddly silent as the government goes about killing investment and jobs as part of its ideological hatred of renewable energy.