Abbott’s Achilles Heel: Is it ideology or ignorance?

For the past 18 months we have wondered if there are any moderates or small “l” liberals left in Australia’s ruling Coalition. Many of its members have privately wondered the same thing. We may be about to find out.

In so many ways, Tony Abbott’s decision on Monday to award an Australia knighthood to a 93-old-year British prince – and ignoring the pretensions of any number of deserving Australians – tells us pretty much everything we need to know about this Coalition government.

HRH Prince Philip
HRH The Prince Philip

Firstly, we have learned that this is a government that is ruled by a small cabal in the prime minister’s office, and there is little or no consultation with colleagues; hence Abbott’s decision to make yet another “captain’s call.”

Secondly, we have learned that this is a government that is deaf to the community; hence Abbott’s decision to ridicule the response on social media. Thirdly, we have learned that his is a government that is locked in the past; hence his decision on the good prince.

As one friend lamented when hearing the news of Prince Philip’s impending knighthood: “So who are these people?”

It’s a valid question. And it seems they are pretty much the same folk who have guided the federal government’s extraordinary decisions on schools, healthcare and energy, among a host of other issues.

They are pretty much the same folk Abbott has chosen to surround himself and to advise on all his key portfolios – banking, energy, business, and infrastructure. Namely, old white men locked in the past, with no vision of the future and no understanding of the social and technological trends that are making their “experience” virtually redundant. And the right wing ideologues in the media calling for them to be even more extreme.

Now, finally, the Coalition itself is openly wondering whether their interests are best served by such people, and the not-so-splendid isolation of Abbott’s office.

One of the questions that has been circulating for many months now is whether Abbott’s is a case of blind ideology, or just plain ignorance? One, unfortunately, begets the other.

In the energy industry – about as central to the health of the economy as any – the Abbott government’s belief in ageing, centralized, fossil-fuelled technologies, and its refusal to accept that the Greens could possibly be right about anything, let alone a new industrial revolution, has pushed it into gridlock.

Last week, in Abu Dhabi, the International Renewable Energy Agency said it was now clear that in many parts of the world, renewable energy technologies were below the cost of fossil fuels – a key development for a nation like Australia whose economy is geared to the export of fossil fuel commodities.

“Any remaining perceptions that renewable power generation technologies are expensive or uncompetitive are at best outdated, and at worst a dangerous fallacy,” director-general Adnan Amin, said.

But Australia wasn’t there to hear the message. While 65 other nations sent their energy ministers to the annual conference, Australia sent only an embassy staffer, echoing its decision in late 2013 to send no ministerial representative to the international climate talks in Warsaw.

Likewise, Australia was not there to hear about the record low price struck for a 200MW solar plant to be built in Dubai – at two thirds of the cost of gas, and probably half the cost of a new coal plant. The Saudi company building the plant, ACWA Power, thinks that more than half the new generation built in the region will be solar.

These prices could not be repeated in Australia, because of the higher labour costs and higher financing costs. But they do indicate a global trend. Chile, for example, is installing more solar plants because it is cheaper than the alternative. Solar and wind are cheaper in many countries. If Australia needed new plants, it would be cheaper here too. Australia, however, simply needs to replace ageing, fully depreciated coal plants with clean technology, something that is difficult to do without a carbon price, and without firm direction on renewable energy policies.

Any number of new studies highlights the absurdity of the Abbott government’s position on climate and clean energy. Not only was 2014 the hottest year on record, even without an El Nino event, new research shows ocean temperatures going off the charts. The CSIRO and Bureau of Meteorology, who Abbott’s main business advisor Maurice Newman would like us not to trust, suggest that Australia faces temperature rises of 5.1°C within a few decades.

Australia has justified its inaction on climate on the idea that no one else is doing much. But you only believe that if you rely on News Ltd columnists for your information.

As Opposition climate spokesman Mark Butler noted: “Despite all the evidence, Tony Abbott and the Liberal Party are stuck in the past, playing games with Knights and Dames while taking Australia backwards on climate change action.”

The Labor party can hardly believe its luck. And neither should the rest of Australia. The country is now half way through the Abbott prime ministership, if the polls are any guide. If the chatter coming out of the parliamentary corridors are to be believed, it may be a lot closer to the end of this redundant regime than anyone would think.

Comments

78 responses to “Abbott’s Achilles Heel: Is it ideology or ignorance?”

  1. Keith Avatar
    Keith

    Unfortunately it still isn’t clear to what extent the ALP has got the message about fossil fuels, although at least they want to price carbon. We need clear statements by both major parties that the future doesn’t involve fossil fuels.

    1. Rob G Avatar
      Rob G

      ALP have by their own actions already established themselves as serious about climate change action. The carbon tax, the home insulation scheme, the genuine support for the RET, employing scientists studying the effects on Australia, attending and often leading in policy on the international stage – even back as far back as Rudd and Kyoto… While on the other hand Abbott has destroyed or is in the process of destroying all of these initiatives.

      I think it is quite clear where the ALP stand. Even when we look at their state counterparts in SA and ACT and previously in VIC where renewable adoption is impressive. That said I think they can do more such as shutting down coal fire stations…

      1. mike flanagan Avatar
        mike flanagan

        I wish with a passion I could agree with your perceptions Rob without reserve, but I am prompted to query Shorten’s backbone and commitment on the subject.
        While the record does speak for itself, it is history, and has all been emasculated by the ignorant program of a vindictive and incoherent Abbot. I also wonder what impact the Greens and Bob Brown had on the resolve of the ALP when I observe today’s leadership’s focus on the issues.
        Albo and Butler have shown a consistency and focus while Shorten has been circuitous in his public utterances and commitment to bring to the table an abatement program. His past associates and personal friendships, personified in his association with Roskam, a right wing ideologue climate change denier, are a concern for the public and demand some explanation and refutation of influence on his own
        position.
        The Labour Party shows evidence of being frightened of the Denier Industry inspired resurrection of the shrill campaign of a “tax on everything” mantra and are currently lacking the leadership attributes to capitalise on the communities’ maturity, evolving understanding and awareness of the threats and calamities in store
        if we continue to plan to ignore the challenges posed by rampant emissions of the offending gases.
        Time will tell Rob and I sincerely hope my perceptions are flawed, and evidence of leadership with backbone will quickly deflate my worries.

        1. Rob G Avatar
          Rob G

          I have seen Shorten on a number of occasions speak quite passionately about addressing climate change and he makes the point that ignoring it leaves Australia in an embarrassing position in the eyes of the world. He gave ‘instructions’ to all Labor state members, in a meeting in Sydney, that they as a party needed to treat the subject seriously, in fact all the more so because of the lack of interest from the Libs. I think Labor can see this as a defining issue that can shape their party.

          There does exist a feeling within the community that Bill Shorten is a bit too quiet and not challenging enough with this current government, but my assessment of this is that he just has to be Mr Sensible to win office next time. To come out with a Mark Latham (pitt bull approach) might be fun but is wrong the wrong tactic. It will be Abbott’s unsurpassable arrogance that will ultimately lose him the next election.

          In all honesty I think Abbott will be gone by the end of the year. There will also be a point where other countries will squeeze Australia into submission to act on climate change (before Paris I suspect). Uk Prime minister, Cameron, has pretty much said that was going to happen.

          1. mike flanagan Avatar
            mike flanagan

            Thanks Rob and I find some comfort in your assurances of Shorten’s activities and commitment. I do agree Abbott’s political shelf life is quickly reaching its used by date and suggest Shorten has to increase the public exposure on some his proposals to address fundamental risks and challenges the society and nation face. Climate change being a priority.
            While scientists are restricted in their pronouncements of future implications to avoid overstating or misrepresenting their thesis, the mounting observational evidence, confirming earlier dire prediction, must be brought to the publics attention honestly without the sugar coating the press have served for the past twenty odd years.
            Those, in the community, who accept the scientist’s hypothesis and observations, have been lulled into complacency and the press have fed their underlying fears to radical changes to their lifestyles to bolster the public’s and political preference for inaction.
            Observations, particularly of the collapse of the planet’s poles, add an urgency that must be brought to the public’s attention honestly to encourage the acceptance of the necessary changes we must implement and endure to our accepted lifestyles to avoid the worst of what is on offer.

          2. Rob G Avatar
            Rob G

            Yes Climate change is pretty depressing, especially with the likes of Abbott in the way of progress. I recently watch Al Gore’s 24 reasons for hope, google it, these series of talks are truly inspirational. I’ve taken a lot of comfort in the wider world view on climate action, the wheels are beginning to turn.

          3. Harry Verberne Avatar
            Harry Verberne

            My fear is that Abbott’s political demise will make little difference as the LNP appears to have been captured by the IPA and the FF industry. I think the real hope for effective action is a Labor/Greens alliance of some sort. And that does not seem about to happen either.

          4. Rob G Avatar
            Rob G

            I Agree and I think most Australian are realising this – just look what happened in QLD. People are beginning to understand how stitched up the LNP are to the FFuelers. ALP also have some connections but know voters are watching.

      2. david_fta Avatar
        david_fta

        ALP might be serious about climate action, but sadly they are a bunch of policy clowns who come up with every answer but the correct one: a revenue-neutral Consumption Tax on Fossil Fuel.

        1. Rob G Avatar
          Rob G

          No doubt they’ve had some stuff ups. But a lot of it is pure Murdoch B.S. And the tired old arguments of financial recklessness continue to do the rounds even when the truth is quite different. In the recent VIC election, Napthine’s parting speech talked of how his government had gotten the VIC back to a AAA financial rating (pure illusion), Bracks and the previous 7 years had actually achieved that. In fact they had been back in the black for some time under Labor.

          SMH came out the other day and said now was the best time to invest in large projects in Australia by borrowing money at a guaranteed low rate of 2.5% fixed for several years. Noting that in the 80’s these rates were 20%, 90s 15%, 2000s 10-5%. They added that one-eyed Abbott’s need to be in the black would be an opportunity lost – heck if I was offered that kind of loan I’d be buying up property everywhere. Abbott and his lot cannot see past the bank balance. I tend to think the budget surplus is given too much focus – at the smaller end of town a mortgage debt is considered an investment not a liability why then can’t this apply at a government level?

          I think medicare, a good Labor policy. Labor have plenty of good ideas but do sometime lack the right way to bring them in. The carbon tax could have been better handled.

          Funny thing the Carbon Tax, in British Columbia they have one and it is so successful with job generation etc that the public have demanded that it be increased!!! Somebody sold it in the right way.

          1. david_fta Avatar
            david_fta

            Rob G, you’re absolutely correct in all respects except my major point: my major point is that ALP should have introduced a carbon tax like the British Columbia Consumption Tax. Instead they introduced an absolutely shithouse emissions PRODUCTION tax.

            Now, most people don’t seem to understand the difference between these two taxes, which is a shame because it allows ALP to be as shithouse as KRudd would like.

            You see, an emissions PRODUCTION tax is only applied to emissions that happen within your own jurisdiction (in our case, Australia) – so manufacturers promptly shut down their Australian factories, and instead import everything from China. If anything, this actually INCREASES CO2 emissions because everything has to be shipped from China on ships that burn oil and emit CO2.

            A Fossil Fuel CONSUMPTION Tax, on the other hand, is automatically calculated on all the FF consumed in the entire production chain. If you’re an economics geek (no offence intended!), it’s all explained in Attachment 5 to my submission to the Green Paper on TAbbot’s Emissions Reduction Fund: http://www.environment.gov.au/submissions/emissions-reduction/green-paper/95-david-arthur-attachment5.pdf.

            You might also want to read my reply to Mike Flanagan, also in this discussion thread.

            Conclusion: ALP might mean well, but they are a bunch of dunderheads.

          2. Rob G Avatar
            Rob G

            David, thanks for the link the article looks interesting and I will look through it more closely in the coming days. I note that it is 2011 so a lot has happened since then.

            Here’s my take: The LNP have put this ‘exported emissions’ argument about on a number of occasions, but I kind of find it circular and unhelpful. It’s a bit like Andrew Bolt’s (and others) saying “well Australia only produces 1.5 % of the world’s emissions, therefore us stopping will achieve nothing” Correct but wrong. The Carbon tax was successful and 2/3 of Australians supported it (Abbott is happy to leave that little fact out of the conversation…). Now gone, people are wondering when they are getting their $500 that he promised.

            World trade rules allow Carbon taxing to happen across borders so it cuts both ways. Those companies ‘exporting’ their emissions will eventually be hit up as C02 taxes become more global (China is moving quickly towards this as are others) – there will be nowhere to hide. And besides, from a pure Australian point of view we mist clean our act up here – what happens overseas needs to be dealt with by those countries and the UN. We cannot build policy on what might happen abroad – its just the wrong way around. Really the conversation only came to be as way of mudding the waters in the public eye and to what cause? Abbott’s cause and his coal buddies.

            Speaking on dunderheads that prize goes to Abbott/Newman for the recent QLD election loss. How can ANY party in such a position of dominance, 3 years ago, squander it and be ousted out of power??? And furthermore, they still cannot see where they really went wrong – their analysis is way off. Wayne Swan identified it pretty easily on the ABC coverage of the election.

          3. david_fta Avatar
            david_fta

            Thanks for those encouraging remarks, Rob G.

            I might add that a half century of “War on Drugs” focus on supply side of drug trade has failed; it is demonstrably more sensible to wage war on drugs CONSUMPTION – and the obvious way to do that is not through Prohibition (remember All Capone?), but through taxation.

            In Capone’s case, war was waged on Capone’s consumption of his profits – but it makes far more sense, if less compelling movie, to simply apply Pigouvian taxation (consumption taxation to fund public expenditure on amelioration); on the case of CO2 emissions, such is the anticipated damage from fossil fuel consumption taxation that no amount of Pigouvian taxation of fossil fuel consumption can possibly ameliorate the damage it is causing; instead, the purpose of fossil fuel consumption taxation (FFCT) is to provide a price signal to guide and inform consumers in their choice of non-fossil alternatives.

            For example, here in Qld, coal fired electricity (1 tonne CO2 per MWh) retails for ~30c/kWh, and people on the KRudd feed-in tariff are getting ~41c/kWh – so a FFCT of $110/tonne CO2 would increase retail power prices to the KRudd feed-in tariff; FFCT at higher rate than that would make maximising solar panels on every grid-connected house a “no-brainer” (to borrow the popular parlance).

            I once estimated that all Australia’s taxes could be replaced by an FFCT at ~$900 / te CO2 for approximate revenue-neutrality, so an FFCT of $110/ te CO2 would allow for general reductions in Australia’s tax rates of ~11 parts in every 90 – or just under 1 in 8 (incl GST).

            Gee; if there were no taxes other than a FFCT of $900 /te CO2, I wonder if anyone would do the dirty on their fellows and buy solar panels and a Tesla?

          4. Rob G Avatar
            Rob G

            Elon Musk made a similar point, that being tax should be directed towards bad things, cigarettes for example. I’m no opponent of that. Taxing aside, we’ve just got to take away those big subsides that we keep handing out to fossil fuel. That alone would drive renewables. Instead we choose to reward them and find ourselves with politicians who want to hamper the renewable onslaught.
            Abbot today, made a big song and dance about Shorten bringing back the carbon tax (Scare tactics!?). But, I’m sure carbon will have a price though not in the same we we have already had.
            I do like your argument and the Al Capone analogy is good. FFCT might be the answer, it’s a bit like a GST with the ‘user pays’ an easy concept to grasp.

          5. Harry Verberne Avatar
            Harry Verberne

            Check out Modern Monetary Theory which makes the case that Federal deficits are not a problem as federal government’s are issuers of fiat money and are able to create funds by book entries and use it to purchase goods and services up to the point where those resources are fully committed. More than that and inflation becomes a problem.

            See: Bilbo.economicoutlook.net/Blog/

        2. mike flanagan Avatar
          mike flanagan

          A Consumption Tax on Fossil fuels should be included in the discourse but only if Industry and Commerce are banned from profiteering from it through their inclusion of the tax element in the base they use to calculate profit margins. The government must also hold the right to cap emissions on a rapidly reducing factor by fiat

          1. david_fta Avatar
            david_fta

            I’m not sure such a measure is necessary, Mike; my thinking is that sooner or later, some company is going to go 100% renewable energy, in which case they’ll have no FFCT (Fossil Fuel Consumption Tax) liability – and they’ll wipe the floor with their FF-consuming competitors.

            Here in Australia, the big payers of FFCT will be operators of coal-fired power stations, which will make renewable energy attractive to both them and all electricity users.

            The other payers of FFCT will be importers – because FFCT is applied to the fuel used to bring imports to Australia, as well as to the carbon embodied in goods manufacture in the originating country. Result will be increased manufacturing activity in Australia, which will restore both employment and the tax base – allowing Australia to become a low-taxing economy.

            Regarding taxation of liquid transport fuels (petrol, diesel, etc), FFCT will not be imposed on biofuels because they are not fossil fuels – so Australia will eventually become self-sufficient in transport fuels through biofuel production, possibly even become a net exporter of biofuels to countries where the sun don’t shine.

          2. mike flanagan Avatar
            mike flanagan

            Thanks David for those informative comments. I confess prompted by others to research such a proposition on the net previously and found considerable amount of material on a consumer based tax that did not satisfy my query. Have you any links at your ready disposal?
            Much of my concern is the time frame at our disposal to effect both emissions abatement and preparatory work to contend with the onslaught of weather and ocean changes the sciences indicates are about to be unleashed in time frames that demand some urgency. The

          3. david_fta Avatar
            david_fta

            I wrote a letter to Ian Macfarlane on 21 November last, or thereabouts, which might help.

            —–Original Message—–
            From: ***
            To: “Minister Macfarlane”
            Cc: [email protected]
            Date: 21/11/2014 12:45
            Subject: Re: Letter from The Hon Ian Macfarlane MP – MC14-004132 [SEC=UNCLASSIFIED]

            Please find attached my letter to Minister Macfarlane, in reply to his letter of 17 November 2014 (ref MC14-004132)

            I’ve also copied the text of my letter below.

            Regards

            ***
            21 November 2014

            Your ref: MC14-001432

            Dear Mr Macfarlane,

            Thank you for your letter of 14 November 2014 that followed my email of 23 October last. In that letter, you informed me of the Government’s activity in regard to each of the concerns that I’d previously raised, namely the Renewable Energy Target (RET), and facilitation of technological progress in both steel-making and in development of non-petroleum (renewable algae-based) transport fuels.

            You also made mention of my submission to the Green Paper on the Emissions Reduction Fund, and set out some of the projects that will be supported by that Emissions Reduction Fund. While I applaud all the initiatives outlined, I am surprised that revegetation projects are included, since I do not see how revegetation per se in any constitutes the reduction of emissions. If I may nevertheless make a particular plea, I would ask that revegetation projects (perhaps employing the ‘Green Army’) be initially concentrated along Coral Sea catchments river banks, northward from the Mary River at the southern end of the Great Barrier Reef (GBR)- which would have the further benefit of improving runoff water quality to the GBR.

            I further note that you make no comment on the major argument of my submission – which is that a carbon price should be established through a Consumption Tax on Fossil Fuels (FFCT). Having given the issue some further thought, this letter sets out some of my ideas on some changes to Australian taxes that would accompany introduction of an FFCT – changes that I show to be generally beneficial to the Australian economy, particularly Australian industry.

            Not that the following discussion is based on estimates for costs and prices that are, at best, approximate. It is beyond the writer’s present resources to produce detailed or precise cost estimates, so that all values may be treated as indicative figures only. They suffice, however, to demonstrate that introduction of a carbon price through a Fossil Fuel Consumption Tax would be of general benefit to Australian industry.

            The rate of the tax would vary, depending on the actual proportion of carbon contained in the fuel; methane is 75% carbon by mass, for example, whereas diesel fuel is typically about 86% carbon – so a FFCT rate of $25 per tonne CO2 emitted is equivalent to ~$92 per tonne carbon contained in the fuel. A tonne of methane gas would attract an FFCT of 75% x $92 per tonne carbon, which would be $69, and 1,000 litres (~840 kg) of diesel fuel at 86% carbon would attract a tax of ~$66.50, or 6.65 cents per litre.

            If such a carbon tax is introduced at the rate given here, then Fuel Excise could be decreased from 38.14 cents per litre to 31.49 cents per litre to have no net effect on the fuel price at the bowser. However, Fuel Excise would be decreased by ~17%, as would the total cost of the Diesel Fuel Excise Rebate Scheme.

            It should be noted that if the diesel fuel (or indeed the methane mentioned above) is consumed in the process of supplying goods or materials for export, then because exports are ‘zero-rated’ for Consumption Tax at port of export, any FFCT liability incurred in the supply chain to port of export would be rebated, effectively analogous to the operation of the Diesel Fuel Excise Rebate scheme.

            On the other hand, where Diesel Fuel Excise Rebate is claimed in respect of primary production destined for domestic consumption, the Rebate indeed decreases by 17%, and the user of that diesel fuel pays the Consumption Tax incurred. This does not decrease competitiveness of Australian primary production in the Australian domestic market, because competing landed imports incur a ‘border adjustment’ at the same rate of $25 per tonne CO2; because border adjustment on these imports includes both fossil fuel used in nation of origin and fossil fuel used to ship imports to Australia, there is a net non-tariff advantage to whichever supply chain uses less fossil fuel. The a priori expectation must be that this will be the domestic primary producer.

            The above remarks on the treatment of exports and imports under a consumption-based carbon pricing regime also illustrates why Labor’s carbon emissions “price” or “tax” or whatever they called it was so poorly conceived. Because the ALP carbon price was based on production of carbon emissions, rather than being consumption-based, it amounted to a huge disincentive for production in Australia.

            For this reason, a great deal of effort went into devising a ridiculously complex ‘compensation’ scheme for what was termed “Emissions-Intensive Trade-Exposed Industries” (‘EITEI’, or some such acronym). All that ridiculous complexity is avoided with a simple Consumption Tax, placing domestic producers and imported competition on a level, WTO-compliant[1], playing field.

            Some months ago I estimated the total amount of fossil fuel consumed in Australia, and also estimated the total revenue raised by all the Taxes, Excises, Rates and Duties imposed by all levels of Australian government. From this, I concluded replacing all of these Taxes, Excises, Rates and Duties with a FFCT of ~$900 per tonne CO2 would be approximately revenue-neutral – except that with no Fuel Excise there would be no Fuel Excise Rebate Scheme, and that revenue would be increased through imposition of FFCT ‘border adjustment’. FFCT at an initial rate of $25 per tonne CO2 would generate revenue approximately equal to 2.8% of total revenue.

            Now, the bulk of any such revenue should be returned to taxpayers, so as not to unduly burden the ‘productive’ (tax-paying) sector of the economy. Further, we note that but for transport fuels, personal Income Tax-payers do not directly consume fossil fuels; the taxation of those transport fuels is considered above, where all imposition of FFCT is offset by decreases in rate of fuel excise.

            The major payers of FFCT, then, would be Australian consumers of coal – which are all businesses, predominantly electricity generators. The cost of the FFCT, at $25 per tonne CO2, would be recovered by increases to the wholesale power price paid by network operators to power generators, costs which are then directly passed through networks to power consumers. I understand coal-fired power generation typically emits about 1 tonne of CO2 per MegaWatt-hour (MWh) of produced power, so that would be an increase in the wholesale power price of ~$25 per MWh, or 2.5c per kWh[2].

            The revenue raised, as per above discussion, by an FFCT of $25 per tonne CO2 would be equivalent to ~2.8% of all government revenue. By comparison, Company Tax (at a rate of 30%) raises approximately 22% of Federal government revenue, about 8 times as much as would this FFCT. Because FFCT would be incurred primarily by businesses, Company Tax rate could be decreased by ~1 part in 8; that is, decreased from a headline rate of 30% to 26.25%.

            An immediate consequence of this would be a decrease in avoided Company Tax of $1 in $8; according to a recent Tax Justice Network and United Voice union report (“Who Pays For Our Common Wealth?”, ref: “ASX 200 company tax avoidance bleeds Commonwealth coffers of billions a year, report finds”, Heath Aston & Georgia Wilkins, Fairfax Media, 29 September 2014) this avoidance is costing the Budget ~$8.4 billion per annum, of which $1 in $8 would recover ~$1 billion per annum to the Budget.

            We see, then, that by simply improving the efficiency of tax collection, we improve the Budget by ~$1 billion per year – making possible either debt reduction, or further tax cuts, while simultaneously establishing an efficient carbon price which benefits rather than harms Australian producers. We also see that Consumption Taxation is much simpler than ALP’s carbon-pricing scheme, the implementation of which requires so many ‘carve-outs’ as to render it all but useless – and yet is WTO-compliant.

            Furthermore, by encouraging efficiency it is very likely to over-achieve in terms of Australian CO2 emission reductions – all without needing to modify, in any way, the Government’s proposed RET.

            In summary, then, a Fossil Fuel Consumption Tax of $25 per tonne CO2 could be accompanied by

            · decrease in rate Fuel Excise from 38.14 c/L to 31.49 c/L, and

            · decrease in rate of Company Tax from 30% to 26.25%

            to leave Australian tax-payers with pretty much the same tax burden as at present, and yet increase Tax revenue by ~$1 billion per annum through decreased avoidance, plus un-estimated increase through (WTO-compliant) ‘border adjustment’ that automatically favours lower-emission domestic business activity; all this make possible further decreases in Australian taxation, increased Australian business activity and increased opportunity for productive government investment (Emissions Reduction Fund, for example).

            I strongly encourage you to give this matter due consideration, and look forward to your response.

            Yours sincerely,

            ******
            [1] Veel, “Carbon Tariffs And The WTO: An Evaluation Of Feasible Policies” Journal of International Economic Law 12(3), 749-800 doi:10.1093/jiel/jgp031 (pdf accompanying to this submission as Attachment 8), Pauwelyn (2012), “Carbon Leakage Measures and Border Tax Adjustments Under WTO Law”, Graduate Institute of International and Development Studies (IHEID), Switzerland.

            [2] A coal-fired power station could install Carbon Capture technology, and that captured CO2 could be used to produce liquid transport fuel via algae – in which case the consumer of that liquid fuel would incur FFCT; algae-derived fuel for which the carbon source is atmospheric CO2 would, of course, be FFCT-exempt because in that case the carbon would not be derived from fossil fuel. An alternative use for the captured CO2 might be tree farming – for which FFCT exemption would require an audit to show that the carbon stored in the trees each year equals or exceeds the captured carbon supplied from power station to tree farm.

          4. mike flanagan Avatar
            mike flanagan

            Thanks David. Much to cogitate and reflect on there, but on another vein it is good to see your discourse with the Minister in the public domain as a lot of the agenda proposed by the government shows little support from the obvious science material passing over their desks. The lack of public scrutiny suits their obfuscation, inaction and their dishonest discharge of their duties to the community

        3. Harry Verberne Avatar
          Harry Verberne

          I like the idea of a tax on carbon consumption as it could allow for large reductions in other taxes to drive behaviour change of consumers at all levels whilst not increasing the overall tax burden or affecting international industry competitiveness. The devil is in the detail and the design must allow for those not paying income tax plus I can see difficulties with calculating the embodied carbon in certain products and services.

          But where there is a will there’s a way!

          1. david_fta Avatar
            david_fta

            We may or may not have discussed these issues in other fora, Mr Verberne; be that as it may, I’d suggest that each nation’s carbon accounts might be useful for estimation of “embodied carbon” – and where such accounts do not exist or may be thought unreliable, it could be demanded of the importer that they provide a carbon audit of the supply chain.

    2. Crispy Avatar
      Crispy

      Wasn’t it the Greens that voted down an emissions trading scheme in 2009? and voted against fuel excise last year? that’s what I remember anyway.

      1. ObsidianCrane Avatar
        ObsidianCrane

        Indeed. So the question should be “why did the Greens vote these things down?”. Clearly the badge wasn’t as important as the stuff inside the box.

        1. GraemeF Avatar
          GraemeF

          My memory was that Labor decided to get sneaky by ignoring the Greens and trying to wedge the Coalition by bringing them in on talks. The Coalition then voted out Turnbull and reneged on their support. The scheme designed in conjunction with the Coalition was about as useful as Direct Action so the Greens voted against it. Labor have been blaming the Greens for Labor getting into bed with the Coalition and not being respected in the morning.

          1. SunGod Avatar
            SunGod

            Nail. Hammer. Head. Said it perfectly Graeme.

            And if passed, as many have shown before now, it would have handed $16 billion to polluting companies, making it even worse than the Palmer ETS Zero farce.

            As I commented on another page here a few days ago, it makes me mad that even now, as global warming and ocean acidification keep getting worse, meaning more dramatic action needed to avoid total catastrophe, we still see ALP operatives reciting this fictitious meme glorifying the ‘CPR$’ (otherwise known as the Carbon Pollution Reinforcement Subsidy) and ranting about how terrible us Greens are because we opposed it, voting it down not only to advance real action on global warming instead of corrupt handouts to big polluters, but for the sake of sane fiscal policy too.

          2. zynismus Avatar
            zynismus

            the absolute “say nothing” denialism of these freaks leads me to wonder if their information comes from a different page: 2006 IPCC was less censored and they (politicos) came out saying “well, we’ve certainly got our work cut out for us …”, then said nothing else about it … the NLP cretins appear to be in denial mode for the reason that destriction is assured (in which case they carry on with the ransack and pillage because it won’t have any effect, other than to make their days a little more … gluttonous) … but then again, Christinanes loathe the planet because they have little Platonic “souls” … pffft … : )

          3. SunGod Avatar
            SunGod

            Hey there Z, yep, that’s how it is. Outright denialism from the LNP, soft-pedal denialism from the ALP.

            Noticed your sterling efforts while reading Independent Australia as well btw, hope you keep up the good work round that site.

          4. zynismus Avatar
            zynismus

            hehe : ) half the problem with censorship is getting around it : )

          5. SunGod Avatar
            SunGod

            So you know though, having been a reader & observer of IA for a long while, reckon David Donovan’s a good guy in general, his heart’s in the right place. Basically a kindred spirit politically, for the most part. And generally does a decent job policing the Sussex Street trolls when they turn up. Two of those have been kicked off four different sites now btw, including this one. Can certainly agree with censorship of that kind of thing!

            Had a look-see when I saw that post of yours was gone just before, but it hasn’t changed anything much for that ‘Fran’ character. Still been made obvious by Rebecca and DJ what that person’s doing.

          6. SunGod Avatar
            SunGod

            Bloody hell mate, just saw a second ago that one of DJ’s replies pointing out the obvious lies in that attack-dog stuff about the Greens was removed, but the lies themselves from that ‘Louise’ alias were allowed to stay, and Donovan upvoted the post! Bit stunned. Certainly hope he has some sort of decent reason for that.

            -> https://disqus.com/home/discussion/independentaus/tony_abbott_meet_sigmund_freud/#comment-1852590656

          7. zynismus Avatar
            zynismus

            that’s sort of what I mean: IA censors, disqust censors … it seems arbitrary sometimes, partisan at other times … also, the temporal glitches, weird time zone applications are disturbing ,,,
            as for the DJ/Louise thing: he gets a bit uptight and I don’t always see the point; “she” seems to be taking the piss to go by the avatar, but what I said on that “seems to have been disappeared” as well … : )

          8. SunGod Avatar
            SunGod

            There’s some history with that sort of thing mate, goes back well before you had this id – that’d be why DJ’s very hardnosed about it. But think he’s wrong about who ‘Louise’ might be, probably was one of the little group of TSM creatures who was harassing a bunch of us for a long while before now. Anyway, seems like it’s all been dealt with fairly enough now IMO.

          9. SunGod Avatar
            SunGod

            BTW mate, all’s serene as far as that other page goes now 🙂

      2. Adam Avatar
        Adam

        Yes, they voted down an ineffective scheme that would have locked us in at unacceptable levels. This allowed them the chance to design the carbon tax package that was eventually established. It is the fault of Labor infighting that Tony Abbott was able to repeal it.

        Yes, they also voted against an increase in the fuel excise because the Coalition refused to consider public transport infrastructure projects instead of roads. Regardless of the excise increase, more roads will mean more emissions. You’ll note of course that Labor also voted against this excise.

  2. Cheryl T Avatar
    Cheryl T

    We have the LNP ( meaning big “L”) takes good care of their own elite and vested interests, the ALP takes care of its Union thugs, WHO is governing for the bulk of us in the middle ??????

    1. lin Avatar
      lin

      Our best chance of honest representation is from good local representatives (like Kathy McGowan, Tony Windsor, Andrew Willkie), minor parties like the Greens, possibly some of the PUP candidates, Xenophon, and accidental candidates like Ricky Muir. Even if you don’t agree with all of their views, they are less likely to be bought and owned by vested interests yet. I am sure that there are some very good Labor and LNP candidates, but preselection often seems to go to those who owe someone something or can be trusted to tow the party line. Long live minority government. If the Gillard one was anything to go by, this is what we should be aiming for all the time.

      1. Cheryl T Avatar
        Cheryl T

        Lin, we all talk about and agree on it and yet nothing is being done about it.
        I know we hear how the media moguls will sabotage any attempt to undermine their interests and the politics that best underwrites their interests, BUT I know the shear weight of numbers from those in in the 2nd & 3rd quartile would HAVE to win out.
        NOW for our INDEPENDENTS with the honesty and fortitude to uphold our interests….

      2. Chris Turnbull Avatar
        Chris Turnbull

        I would agree with you on most candidates, but hesitate with PUP. See the theatre of Clive Palmer abstaining from a House of Reps vote on the carbon tax, but instructing his voting bloc to repeal the tax in the Senate such that he reaped millions in savings for his nickel refinery.
        Good representation also comes from a democratic electoral system. My state of QLD voted 49.7% for the LNP and got nearly 90% of parliamentary seats held by Campbell Newman’s crew. Labor received 26.7% of primary vote and won 6 of the 89 seats in a whitewash. The Greens polled 7.5% of primaries (Qld is a very conservative state) and are yet to hold their first seat in the lower house. There is no upper house and no proportional representation in this least democratic state.

        1. lin Avatar
          lin

          I too hesitate with PUP, but Clive seems to have done a pretty crappy job of selecting candidates that agree with him (eg Lambie), so I am still hopeful that some of the others might find themselves comfortable following their conscience rather than their erratic and conflicted “leader”.

  3. DogzOwn Avatar
    DogzOwn

    Now looking patently obvious that Abbott only ever intended to cause as much damage as possible, seriously deluded blind faith in Free Market Economics, just crash or crash, suicide mission. Reagan was always expecting Armageddon, tomorrow or the next day. Is this what Mr Wabbott believes?

    1. David Boxall Avatar
      David Boxall

      The Institute of Public Affairs (IPA) famously gave Abbott a wish-list[1]. At the time, they exhorted him to be like Gough Whitlam; to introduce radical changes and to do so within his first year. It looks to me like Tony followed that counsel. The IPA subsequently added to their list[2], taking the grand total to 100 wishes. The lists make for chilling reading; it’s fairly obvious where Abbott gets his ideas.

      [1] http://ipa.org.au/publications/2080/be-like-gough-75-radical-ideas-to-transform-australia
      [2] http://ipa.org.au/publications/2110/25-more-ideas-for-tony-abbott

  4. lifeboatman Avatar
    lifeboatman

    The Coalition is now well down the same path as Labour went prior to the last election. They have saddled themselves with a leader who is taking the country well & truly up the creek. However they are presumably reluctant to get rid of him for fear that the public will see the dissension within the party. The nearer they get towards the next election, the worse things will get. Eventually, the back benchers will revolt and he will be replaced. By that time it will be too late either way. If he stays, he will lose the election for them, if he goes, they will still lose, as the party will be seen to be in disarray, as happened to Labour at the last election. In the meantime, Abbott will enact as much retrograde legislation as fast as he can, following his right wing ideology and the requirements of the big end of town. In the meantime, Global warming is speeding up and by the time of the next election, the Greens will be the party whose policies will make the most sense.
    AbbotsGottaGo

  5. suthnsun Avatar
    suthnsun

    Abbot’s feet are made of clay, no Achilles heel required.

  6. bedlambay Avatar
    bedlambay

    Abbott is both ideologue and ignorant (remember how Kerrie O’Brien pulled him apart on the basics of the internet). He will soon be removed as he is a huge embarrassment to angry backbenchers who have openly ridiculed him on HRH Prince Phillip….. He is a political and emotional adolescent and is clearly unfit for high office.

    1. david_fta Avatar
      david_fta

      A political and emotional adolescent, you say? On at least one occasion, he didn’t wear head gear while boxing at Oxford: http://www.theguardian.com/world/2013/aug/16/tony-abbott-boxing-technique

      Clearly unfit for high office ? With adequate funding, I’m sure NDIS could help.

  7. John White Avatar
    John White

    I’m interested in peoples thoughts on The Institute of Public Affairs. I believe this well heeled but highly secretive right wing bunch are actually running Abbott and in consequence running the country. Their people are constantly promoted into key positions & their wish list/manifesto (75 radical ideas) is a close match to many of Abbott’s unexplained decisions.

    Any thoughts or experiences out there?????

    1. Harry Verberne Avatar
      Harry Verberne

      I am confident that the IPA is very influential and is probably the puppet master of the LNP.

      1. David Boxall Avatar
        David Boxall

        The Institute of Public Affairs (IPA) famously gave Abbott a wish-list[1]. At the time, they exhorted him to be like Gough Whitlam; to introduce radical changes and to do so within his first year. It looks to me like Tony followed that counsel. The IPA subsequently added to their list[2], taking the grand total to 100 wishes. The lists make for chilling reading; it’s fairly obvious where Abbott gets his ideas.

        We’re being governed by the IPA, it seems, so who are they? Founded before the Liberal Party of Australia, they’re so Conservative that Abbott looks like a Socialist in comparison[3]. The IPA was founded by business interests and remains beholden to them, though it has broadened its reach to embrace historical revisionism and science denialism[4].

        [1] http://ipa.org.au/publications/2080/be-like-gough-75-radical-ideas-to-transform-australia
        [2] http://ipa.org.au/publications/2110/25-more-ideas-for-tony-abbott
        [3] https://independentaustralia.net/politics/politics-display/abbott-the-ipa-and-hayek,7232
        [4] https://www.thesaturdaypaper.com.au/news/politics/2014/05/31/abbotts-faceless-men-the-ipa/1401458400

    2. Vic Avatar
      Vic

      “Any thoughts or experiences out there?????”

      Yes, I think the IPA wish list makes it quite clear who’s currently running the country.
      http://ipa.org.au/publications/2080/be-like-gough-75-radical-ideas-to-transform-australia

      Perhaps a more important question should be how much IPA ideology has rubbed off on the ALP’s Bill Shorten. He is after all, a long term friend of the IPA’s executive director John Roskam.
      http://www.themonthly.com.au/issue/2012/july/1345679574/john-van-tiggelen/watch-face

      Shorten was even best man at Roskam’s wedding.
      http://smh.com.au/federal-politics/political-opinion/labors-shorten-experiment-the-tale-of-showbag-bill-20131013-2vfve.html

      I am merely casting aspersions of course, but there you go.

      1. Alan Baird Avatar
        Alan Baird

        The ALP remains a very right wing party although you’d never believe it judging by the way the Murdoch Press froths about them. The entire mainstream political discourse in Australia is in thrall to the Right. The ABC television content is not without taint, the IPA being far more likely to be invited for comment than any even vaguely of a pale pink disposition. Sometimes an ALP functionary makes it on but that means zip as explained above. Around and around it goes but not much comes out. And yes, the ALP emissions scheme was a dog. Under Shorten the next effort will be just as bad ‘cos hysterically, Bill’s regarded as a “safe” pair of hands! Wot a larf!

      2. The Green Lantern Avatar
        The Green Lantern

        YES. Had to endorse this, even though it’s been about a week since the post. Said the same myself before underneath another article on this site.

        And it’s worse than just friendship, since Roskam’s strongly indicated before now that he’s a political supporter of Shorten’s. Reported as such on the ABC a while back.

    3. Chris Turnbull Avatar
      Chris Turnbull

      The website for Independent Australia has a wealth of publications on the IPA. I remembered this one on the tax-deductible status of the IPA and the Waubra Foundation.

      https://independentaustralia.net/environment/environment-display/the-ipa-and-waubra-foundations-charitable-tax-status-rorts,6649

      From the article:

      Professor Clive Hamilton explains how these blatant spin doctors hoodwinked the authorities:

      In 1987 the IPA restructured itself as a company limited by guarantee, which means that its directors are not liable for any debts it might incur. The restructure enabled it to apply to become an Approved Research Institute (ARI) and thus be eligible for endorsement as a deductible gift recipient (DGR). In other words, donors to the Institute would be able to claim a tax deduction for their donations. DGR status is the most valuable asset of an organisation like the IPA because without it virtually no-one would donate.

      So, when the IPA are out there spinning the facts on climate change, tobacco or GMO foods, we, the taxpayers, are subsidising the service through tax-deductions for IPA’s donors as well as providing free carriage of their message on our taxpayer-funded ABC.

      1. mike flanagan Avatar
        mike flanagan

        There was a successful campaign in the USA to have The Heartland Institute denied tax exemption under their research and charity provisions. One wonders what opportunities our own tax legislation and administration offers to advance a similar challenge herein Australia

      2. Vic Avatar
        Vic

        Thanks should go to Greens senator Richard de Natale for pursuing actions which led to the recent removal of tax exemptions for the anti-wind farm Waubra Foundation.

        http://abc.net.au/news/2014-12-19/waubra-foundation-stripped-of-health-promotion-charity-status/5977530

    4. Marg1 Avatar
      Marg1

      Yes I think when Labor gets back in they should be investigated – I think Murdoch is heavily involved with them too.

  8. Chris Fraser Avatar
    Chris Fraser

    Pity that wounded animal, the LNP. They only ever wanted him to lead them to election victory. But they forgot to have a word in his ear on election night about his feared manipulation and central control. They missed their chance to tell him to turn it down. Now, the Prince. I wonder why he would want the Prince to be one of his Knights ? “Can you tell me, HRH, how I could be born to rule, and never have to face an election ?”.

    1. david_fta Avatar
      david_fta

      Perhaps we can thank Peta Credlin for that one? My guess is, Toned Abs wanted to knight Rupert Murdoch, but Credlin talked him down to HRH – earning herself the undying enmity of Citizen Rupert.

  9. Carole C Avatar
    Carole C

    I have never wanted a government gone more than this one. I have also never lived through one as bad, so seemingly out of tune with the the wants and needs of the general electorate….. and with the times.
    Whether you respect her or not Julia did warn us about Tony…. that he was more eccentric than most people knew. I think she was being kind.

  10. Jason Avatar
    Jason

    The situation is far more serious than we want to admit…. When we do turn to the new technology to power our society we are going to discover that there are no realistic substitutes for oil. That far too much of the renewable infrastructure actually requires fossil fuel to be mined, refined, manufactured, distributed, installed, then maintained and replaced over time…. That renewable energy can only support a society that is much smaller in energy demand than our current one meaning the debt based fractional reserve system will implode when the net energy available to do work declines from peak oil …

    1. Harry Verberne Avatar
      Harry Verberne

      Good try to propandise Jason but won’t pass the logic test.

      1. Jason Avatar
        Jason

        http://www.resilience.org/stories/2015-01-21/our-renewable-future

        There are a lot of smart, dedicated people working hard to solve the problems with renewables—that is, to make it cheaper and easier for these energy sources to mimic the 24/7 reliability of fossil fuels through improvements in energy storage and related technologies. None of what I have said in this essay is meant to discourage them from that important work. The more progress they make, the better for all of us. But they’ll have more chance of success in the long run if society starts investing significant effort into adapting its energy usage to lower consumption levels, more variable sources, and more localized, distributed inputs.
        The problem is, the gap between our current way of life and one that can be sustained with future energy supplies is likely to be significant. If energy declines, so will economic activity, and that will create severe political and geopolitical strains; arguably some of those are already becoming apparent. We may be headed into a crucial bottleneck; if so, our decisions now will have enormous repercussions. We therefore need an honest view of the constraints and opportunities ahead.

        1. JosephGF Avatar
          JosephGF

          Perhaps the behavior required for this civilization to survive may be totally unacceptable to the people alive today. Our ability to abandon outdated beliefs is seriously lacking. Metaphorically speaking, have you ever encountered a hall, full of professors, defending outdated doctrine?

          We have the knowledge which would save us. Developing working understanding of findings of psychology from, say, Korean war onwards, which are not currently perceived as essential part of everybody’s point of view, would make a good start. You might get shocking surprise what is available today.

    2. Alan Baird Avatar
      Alan Baird

      Yadayadayadaya…

      1. Jason Avatar
        Jason

        There are a lot of smart, dedicated people working hard to solve the problems with renewables—that is, to make it cheaper and easier for these energy sources to mimic the 24/7 reliability of fossil fuels through improvements in energy storage and related technologies. None of what I have said in this essay is meant to discourage them from that important work. The more progress they make, the better for all of us. But they’ll have more chance of success in the long run if society starts investing significant effort into adapting its energy usage to lower consumption levels, more variable sources, and more localized, distributed inputs.
        The problem is, the gap between our current way of life and one that can be sustained with future energy supplies is likely to be significant. If energy declines, so will economic activity, and that will create severe political and geopolitical strains; arguably some of those are already becoming apparent. We may be headed into a crucial bottleneck; if so, our decisions now will have enormous repercussions. We therefore need an honest view of the constraints and opportunities ahead.

        1. david_fta Avatar
          david_fta

          The answer, Jason, is not to be found in essay-writing or any other prognostication, but in taking each step forward. What then happens is, the next step becomes apparent.

          That is, I disagree profoundly with the notion that we’ll always need fossil fuels. For example, Australia’s entire transport fuel requirement could be met by the production from less than 10,000 sq km of algae ponds (http://futuredirections.org.au/publications/associate-papers/1044-food-and-fuel-forever.html).

          1. mike flanagan Avatar
            mike flanagan

            Today Stihl Chainsaws are supplied with completely synthetic oils for combustion mixtures and lubrication

      2. Jason Avatar
        Jason

        What’s needed now is neither fatalism nor utopianism, but a suite of practical pathways for families and communities that lead to a real and sustainable renewable future—parachutes that will get us from a 17,000-watt society to a 2,000-watt society. We need public messages that emphasize the personal and community benefits of energy conservation, and visions of an attractive future where human needs are met with a fraction of the operational and embodied energy that industrial nations currently use. We need detailed transition plans for each major sector of the economy. We need inspiring examples, engaging stories, and opportunities for learning in depth. The transition to our real renewable future deserves a prominent, persistent place at the center of public conversation.

  11. GraemeF Avatar
    GraemeF

    It is studied ignorance. They latch onto a favourite lie or faulty line of reasoning and repeat it to themselves so often that they believe their own nonsense.

  12. Cooma Doug Avatar
    Cooma Doug

    A carbon price will fix the problem.. Giles, this is a painfully true and important article. Thanks

  13. Cooma Doug Avatar
    Cooma Doug

    My contacts in government and liberal half time dressing room talks, suggest that Mike Baird will be approached to take the wheel. Its a shocker of an idea but the stink in the kitchen is pretty bad. If Baird can cook up a win for nsw it just might happen.

  14. Chop Avatar
    Chop

    Tony Abbot has the same stare that old Christian crusaders had while watching people burn on the cross for their sins. His religious views and personal attitudes should be completely separate from his role as Prime Minister. A Jesuit in control is not a good idea when Muslim fanatics are also running countries.

  15. barrie harrop Avatar
    barrie harrop

    The Abbott knightmare continues,expect next he will be nominating his horse for the Senate,just like Caligula did some time ago,expect his time trying to impersonate the late Sir Robert Menzies is coming to a sad ending any time soon.

  16. JimLesses Avatar
    JimLesses

    Abbott is a perfect example of the Peter Principle in action. The principle is named after Laurence J. Peter who co-authored the 1969 book The Peter Principle: Why Things Always Go Wrong.

    In the book, the authors noted that in any large organization employees and managers will eventually rise “…to the level of their incompetence.”

    We see this over and over again in our politicians, hence the need to reshuffle government ministers. Abbott is currently the most extreme example of the truth of the Principle.

  17. john Avatar
    john

    No person I know has any idea just where this idea come from.
    Pretty dismal future where we have a loose cannon in charge.

  18. Ian Avatar
    Ian

    Abbott should have knighted the King of the Netherlands Willem-Alexander, since Australia is suffering From ‘Dutch Disease’. ‘ Dutch Who? ‘ you might ask. Dutch disease is a term coined in 1977 when a large natural gas discovery in the Netherlands brought in foreign investment and the sale of the natural resource made every one richer but made manufacturing in Holland less competitive leading to the demise of their manufacturing industry. Sound familiar: Goodbye Holden, goodbye Ford, goodbye Toyota, goodbye Bonds, goodbye Point Henry Aluminium, goodbye Victa Lawnmowers, Goodbye Ansett , almost goodbye Qantas. What a terrible farewell party this Australia Day was. Knighting a foreign lord was a fitting gesture indeed. Now we have a one horse race economy and as it turns out we have backed the wrong horse. We have too much product in a crowded market. We laugh a Putin and his Russians having to sip on their own oil but looks like we will have to do the same.

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