Meanwhile the Carbon Tax compensation to lower income earners has led to an increase in retail sales that is twice as high as what was expected. Good to see the money (bribe) is going towards clothes and tvs.
Both sides have used emissions to divide us instead of uniting us.
I'VE come to think we should take more notice of economists. You might see them as impractical nerds. But look back over our long debate on how to tackle climate change, and one thing stands out: the economists got it right, the politicians got it wrong.
Last year the Economic Society of Australia surveyed its members on 46 policy issues. On some, it found economists evenly divided: on the merits of the NBN, for example, or whether Australia should promote nuclear power, whether patients should pay more of their health bills, and whether the GST should be lifted so income tax and company tax can be reduced.
Labor's cost-benefit rules are far from comprehensive, but they're better than none.But on other issues economic opinion is clear cut. Top of the list is whether taxpayers' money should be spent on big infrastructure projects without an independent publicly released cost-benefit analysis first to check the project stacks up. The survey found 85 per cent of economists want cost-benefit studies to be mandatory. (Who doesn't? Politicians.)
Surprisingly, the second most clear-cut response was on climate change: 79 per cent of economists agreed that price-based mechanisms - a carbon tax, subsidies or an emissions trading scheme - are a better way to tackle climate change than using direct regulation.
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Tony Abbott has an economics degree but, being Tony, I doubt that he's a paid-up member of the union; he probably didn't take part. But after his insistence that the NBN be subject to a cost-benefit analysis, we might have hoped that he would apply the same rule to his own policies. Alas, not so.
On Saturday, Abbott pledged to spend $4 billion of our money on three showpiece road projects, with no requirement that they pass a cost-benefit analysis. His Melbourne project was the East-West Link, which failed a cost-benefit analysis when proposed in 2008.
The Gillard government is now paying for the Baillieu government to try to come up with a business case for a revised plan. If it does, fine. But surely our money should not be used to pay for projects that cost more than they're worth.
Labor's cost-benefit rules are far from comprehensive, but they're better than none. It matters because the start of any new government is a chance to improve the rules - or make them worse. Abbott is signalling that, under his government, cost-benefit equations won't matter. Politics will rule.
The start of a carbon price is a rare victory for the economists, and the biggest reform by the Rudd/Gillard governments. It culminates a process that began a decade or so ago when Peter Costello, Alexander Downer and David Kemp took a joint submission to cabinet proposing a price on carbon emissions. John Howard rejected it at the time, but finally took it to the 2007 election as policy.
It should not be a left/right issue and, in most of the world, it isn't. Go to Britain, Germany, Sweden, the Netherlands, South Korea or New Zealand, and you will find Abbott's counterparts there are just as committed to carbon pricing as Julia Gillard is. (Britain's Tory PM David Cameron wrote to Gillard last year to congratulate her on the carbon tax, praising it as ''a strong and clear signal'' to the rest of the world.)
Abbott will destroy it, but future Australian governments, left and right, will bring back carbon pricing, because it is the cheapest, most effective way to tackle global warming, which, if left unchecked, could do immense damage to our world.
A carbon price works because it gives business and individuals an incentive to cut greenhouse gas emissions. Despite the Coalition's claims, it is not an economy-wide tax - if it were, it would be far bigger. Rather, it is a tax on emissions from electricity, gas and emissions-intensive industries. It will cost households $10 a week, $5 in electricity and gas bills - if we do nothing.
But the beauty of this tax is that you can avoid it, by using less electricity and gas. Of all the options to cut emissions, it pushes us towards making our use of energy more efficient.
There are many ways to do this: turning the thermostat down a degree or so, or the aircon up; replacing energy guzzlers such as plasma TVs or halogen lights with energy-efficient alternatives; just turning switches off. You pay that $5 a week only if you do nothing to adapt.
It's a decentralised, democratic way to reduce emissions: we choose how to do it, in ways that preserve profits and living standards. Treasury and the Productivity Commission had been nudging the Howard government to do it for years. They were right, and had Howard responded in time, it might have been as uncontroversial here as it was in Europe or New Zealand.
Instead, both sides derailed us into bad policies and point-scoring. If energy efficiency is the cheap way to cut emissions, putting solar panels on our roofs and paying excessive prices for the power they generate is one of the most expensive. We've finally realised that now, but the economists warned us from the start.
The politicians gave us gimmicky programs that cost us heaps, but put off the low-cost solution. Both sides used the issue to divide us, rather than unite us behind making a modest but effective start to tackling this potential crisis.
We didn't listen to the economists then. Let's start listening now.
Tim Colebatch is The Age's economics editor.
Tony Abbott says carbon tax just bad socialism
"The carbon tax is redistribution pretending to be saving the planet. It's socialism masquerading as environmentalism" Picture: AP Source: AP
- Tony Abbott
- The Daily Telegraph
- July 12, 2012 12:00AM
THE carbon tax epitomises everything that's wrong with the Gillard government. Only this Prime Minister could create a carbon tax that actually makes Australia a bigger emitter, not a cleaner economy.
Only Labor could create a great big new tax that rips billions of dollars out of the economy but then churns and burns it on industry bail-outs and sugar hits for frustrated voters.
Notice how the Prime Minister never talks any more about how the carbon tax is necessary to save us from greenhouse gas emissions? She only ever talks about the handouts that it will fund. On the government's own gures, our emissions go up, not down, despite a $37-a-tonne carbon tax in 2020.
That's right. Despite the carbon tax, Australia's domestic emissions will be 8 per cent higher in 2020 than now, not 5 per cent lower. We only achieve our 5 per cent cut in 2020 because Australian businesses will buy $3.5 billion worth of credits from foreign carbon traders.
So far, since July 1 when the carbon tax came into being, I've done 25 radio interviews, 9 TV interviews and 12 media conferences. I've made 10 carbon tax visits, starting with the Romeo family in outer-metropolitan Melbourne, a one-income couple with three children on about $95,000 a year who will be worse off, not better off, even on the government's own gures.
I've been to a fertiliser plant in Geelong; a shermen's co-operative in Darwin; a soft drink factory in Adelaide; a plastics manufacturer in Gosford; a smelter in Gladstone; a pie-maker in Brisbane; a civil engineering company and a supermarket in Perth; and the sh markets in Melbourne.
All these businesses will be badly damaged by a carbon tax that hits power, refrigeration and eventually transport. Collectively, these businesses provide work for more than 3000 people. Every one of these jobs will be made less secure by a unilateral carbon tax that acts as a reverse tariff penalising local jobs and protecting overseas ones.
Since July 1, the Prime Minister has not been to a single small or medium-sized business. They get no tax cuts, no benet increases and no free permits. She's in hiding from unstructured contact with the Australian people.
The carbon tax is redistribution pretending to be saving the planet. It's socialism masquerading as environmentalism. It's a bad tax based on a lie.
Many times during the last election I declared that "as sure as night follows day, if the Gillard government is re-elected, there will be a carbon tax".
So the Prime Minister's solemn declaration six days before the election: "There will be no carbon tax under the government I lead" was a coldly calculated, premeditated attempt to reassure the public that there really would be no carbon tax, no emissions trading scheme, nothing, in fact, until her citizens' assembly (remember that!) had deliberated and achieved a "deep and lasting consensus" well beyond the term of the current parliament.
When I tell the people "there will be no carbon tax under a government I lead" I am telling the truth. On day one of a new government, I will start scrapping the carbon tax. On day one of a new parliament, I will introduce the carbon tax repeal bill.
The next election will be a referendum on the carbon tax and on governments that deceive people.
That's something else this Prime Minister would rather not face up to.
Carbon tax compo being gambled away
Save this story to read later
HANDOUTS to low-income workers under the carbon tax scheme have led to a surge in pokie revenues in May and June, according to The Australian Financial Review.
- news.com.au
- July 18, 2012 8:24AM
Pokie revenues in Queensland rose more than 7 per cent in May and 12 per cent in June which coincided with the Federal Government’s handout of more than $15 billion in carbon tax compensation to pensioners and low-income earners.
Although other states have yet to release official gaming machine revenues for June, the AFR reports that in lower socio-economic areas of Victoria such as Bendigo they rose by 8.6 per cent, which is 7 per cent above the state average.
Other poker machine operators such as Coles and Echo Entertainment have also seen a jump in pokie revenues since the carbon cash injection was given.
The new figures have led to calls by anti-gambling campaigners for carbon compensation to be given in a different form other than cash.
Stephen Mayne, an independent candidate for the Melbourne by-election this weekend, said it would be better to give the carbon tax compensation in the form of credits at a consumer’s power company.
Nomura gaming and retail analyst Nick Berry said carbon tax payments would continue to the end of July, boosting retail sales and gaming revenue. But when the first power bills arrive at the end of September, most of the carbon compensation will have been spent.
Keith DeLacy, chairman of the compliance, audit and risk committee at the Reef Hotel casino in Cairns, told the AFR that casino revenues have always increased when cash handouts were delivered.
"All it is showing is that people have increased disposable income and that’s what they’re spending it on,” he said.
“Governments have got to accept if they give straight cash handouts to the population at large they can’t dictate how it must be spent as well. I mean, how far can you take the nanny state?”
Yep, baby bonus, carbon handouts etc. It's not about policy, it's about news cycles and votes.
Without defending this handout, had Abbott not exaggerated the effect of the carbon tax, the news cycles and votes wouldn't have needed (and certainly not to the same degree) to be bought. A good opposition is almost as important as a good government. At the moment we have neither.
Yep, baby bonus, carbon handouts etc. It's not about policy, it's about news cycles and votes.
Without defending this handout, had Abbott not exaggerated the effect of the carbon tax, the news cycles and votes wouldn't have needed (and certainly not to the same degree) to be bought. A good opposition is almost as important as a good government. At the moment we have neither.