As long-term readers will know, I spend considerable time pointing out the flaws in self-interested “reports” from business groups, NGOs and, occasionally, governments. As much as I enjoy doing it, it has a certain fish-in-a-barrel tedium, and I’d happily relinquish the task if only other outlets would take it up. Alas, there’s been minimal increase in the willingness of journalists in the mainstream media to cast a sceptical eye on these things in recent years; aside from Ross Gittins and Peter Martin at Fairfax, few journalists can be relied on to subject the self-interested whining of rent-seekers to proper analysis.
Thus it was that the Business Council’s energy paper emerged yesterday to no scrutiny of any kind. It was dropped to that ferocious critic of the business community, The Australian’s Annabel Hepworth (“exclusively”, natch), who employed the Ctrl-C and Ctrl-V functions on her keyboard with her usual adroitness. Later in the day, after the BCA had released it to the rest of the world, the ABC ran it equally uncritically. This was unfortunate, because just a quick skim should have alerted the most docile hack that, even by the BCA’s dire standards, Australia’s Energy Advantages was dreadful.
First there was the council’s assessment of the major issues in the energy sector. Most of us might think that those issues are the rampant gouging in electricity prices and now gas prices, the lack of a carbon price and the government’s destruction of the renewable energy industry, the ongoing clashes in regional areas between local communities and coal seam gas companies or the profound lack of transparency within the gas sector that has been repeatedly identified by governments as a problem. What’s the BCA’s view? Well it admits that prices have gone up, but…
“… retail electricity prices have doubled in the last decade for residential and small business consumers and increased by 88 per cent for large businesses. This is largely due to increases in network costs and poorly designed green energy policies.”
Wait, what? So the spike in electricity prices wasn’t because of rampant gouging and gaming of an inadequate regulatory framework by power companies, but because their costs were going up and green tape? Well, what do you expect when three of the biggest gougers, AGL, Origin and Energy Australia, are members of the BCA? It’s hardly going to bag its own members, right? Indeed, the BCA thinks prices haven’t increased enough:
“Technologies such as solar panels and air conditioning are changing the way the network is traditionally used. As network tariffs haven’t moved with these changes, consumers are not paying their commensurate share of the costs from the benefits they receive from the network.”
Quit ripping off those power companies, consumers!
All this rent-seeking garbage would be laughable except for this: the intention behind it is to mislead and deceive the public, the media and policymakers.
But what the BCA is really concerned about is costs. “Australian resource projects are around 40 per cent more costly to deliver than in the United States,” the report says — twice. What’s the source for that claim? Well that would be another BCA report, which featured in another piece of mine in 2012. That was the report that counted a high speed rail network among its list of “endangered” projects and relied on a ten-year old study that compared the Australian construction industry to the vast, unsafe, illegal immigrant-dependent Texas construction industry — and which, in any event, explained that the strength of the Australian dollar was the main reason for the difference. But anyway — what’s the BCA’s solution to high costs? Well, kind of like Texas, really: it wants 457 visas relaxed so business can import more labour.
The report does admit that there’s a tiny issue when it comes to coal seam gas. But the issue is that community opposition means the CSG industry “has faced several regulatory setbacks, increasing costs and leading to substantial write-downs in asset values”. The BCA wants restrictions on CSG swept aside because “consumers expect a reliable and competitively priced supply of gas and in turn producers of gas need to earn a reasonable return on their investments.”
CSG approval processes need to be simplified and governments need to spend more taxpayers’ money to approve projects faster, moratoriums should be removed and regulations dumped. What about communities? Well, they can be taken care of if the CSG sector — in a rare acknowledgement that industry might not be 100% perfect — explains itself better. “Gas producers should actively engage with communities early, to understand their concerns, and explain the science and precautions taken to ensure the safe and environmentally responsible development of gas resources.”
Maybe if CSG reps talk really slowly and use one-syllable words, they’ll get their message across and community opposition will vanish.
How about the existing lack of transparency in the gas industry, which has been repeatedly attacked by governments as the industry hikes prices? Sure, there’s a bit of an issue there, the BCA admits. Its solution? It wants decisive action: the matter should referred to a COAG committee for discussion — but with the caveat that any reporting requirements which might fill governments, other businesses and consumers in on what’s happening within the gas sector shouldn’t be too onerous and governments should pay for it all.
What else? Well, governments should never raise taxes because it will cost revenue: “The threat of ad hoc tax changes has a negative impact on Australia’s country risk, in turn placing investment, jobs and government revenues at risk.” The Renewable Energy Target needs to be cut back and then ditched altogether. And what about carbon pricing? Climate action advocates will be pleased to know the BCA “has identified six key areas to reduce GHG emissions at least cost to ensure Australia remains internationally competitive.”
Least cost — so, a carbon price, right? The most economically efficient and lowest cost means of reducing emissions, using market forces? Er, no … that doesn’t get a mention. The BCA’s list of “least-cost” carbon abatement measures consist of “engaging with business” (twice), buying international permits, “integrating our energy and GHG emissions policies through common principles”, “removing inefficient or duplicative green energy policies” and handouts to business for R&D.
All this rent-seeking garbage would be laughable except for this: the intention behind it is to mislead and deceive the public, the media and policymakers. This stuff poisons and degrades public debate, making it more difficult for policymakers to undertake reforms that serve the national interest, not merely the interests of big business. And journalists who uncritically repeat this stuff are parties to this malign agenda.