Old Globe

Why are we borrowing from Build Back Better?

The Spectator, 25  November 2021

   Seventeen Nobel winning American economists have said that the Biden Administration’s $1.7 trillion “Build Back Better” program, will increase growth without inflation. They include well-known names like George Akerlof – husband of US Treasury Secretary Janet Yellen — Daniel Kahneman, Robert Shiller, Robert Solow and Joseph Stiglitz. Other US based Nobel economists, of which there are 27, (incongruously, including the left-wing Paul Krugman) did not sign the petition. Almost all Nobel Prize-winning economists are US based.  

The President claims the “Build Back Better” program’s cost, itself seriously underestimated, is fully offset by taxes. This is untrue and, moreover, not relevant since increased taxation will cause   ..... Read online       ..... pdf 

ScoMo’s climate modelling is even dodgier than his climate policy

The Spectator, 14  November 2021

   The government went to Glasgow to sell its net zero emissions by 2050 policy to world leaders. 

  

The policy was based on heroic assumptions like green hydrogen – at present not even a pistil hoping to be fertilised — becoming the cheapest source of electricity, and solar power, which presently costs $70 per MWh as long as suppliers dictate demand, falling to $15 per MWh. Its low credibility was recognised by the legion of green left loonies in Glasgow, who awarded Australia the “Colossal Fossil” for measures that least promote the undermining of current living standards. 

Now we have the “modelling” ostensibly behind ..... Read online       ..... pdf 

COP26 and the climate cult’s schizophrenia

The Spectator,  7 November 2021

   British Prime Minister, Boris Johnson, in addressing the fashionable fiction of human-induced climate change used the hackneyed phrase “It’s one minute to midnight on that doomsday clock and we need to act now”. He even conscripted Prince Charles’ relatives to the cause, thereby lighting a slow fuse under the 1135-year-old monarchical institution.  

President Biden has taken leadership of the issue but due to the failure of Congress to pass the “build back better” spendathon, Myron Eball of the Competitive Enterprise Institute argues that the US has ”little to offer but hot air” but that its policies will bring “increasing energy prices and economic collapse”.      ..... Read online         ..... pdf 

Farewell ScoMo, hello crippling costs of climate fantasy

The Spectator,  28 October 2021

   Scott Morrison is heading off to lead Australia’s team at the Glasgow climate change meeting. He goes with a formula that will continue the nation’s shuffling towards diminished income levels from the politically motivated sabotage of the economy.   

Like Joe Biden and most other leaders who have decided to attend, Scott Morrison brings nothing extra to the table. Amidst the Conference’s impassioned pleas and scary stories, there will be no dramatic new pledges, no carbon border tariffs, no methane-driven constraint on beef growers and further deferrals in the promised gifting of $100 billion a year “compensation” the rich nations have promised poor nations. Voices from climate realists and alarmists alike     .... Read online         .....pdf 

ScoMo, net-zero, that deal – and the death of the Nationals?

The Spectator,  24 October 2021

   Like MPs from other political parties, the Nationals are motivated by self-interest with rare infusions of the public interest represented by Matthew Canavan and few others.  Apparently, enough rural MPs have been persuaded by opinion research purporting to show that rural seats’ voters believe the loud voices declaring “net zero” will be good for the regions. Others realise that any funding and regulatory compensations offered for sacrificing mining and farming would be meagre.    

Deputy Nationals leader  David Littleproud says that cast iron guarantees can be offered to protect regional Australia. He claims the Nationals have triumphed in “securing but also growing regional jobs into the future.”  This is absurd.     .... Read online         .....pdf 

Why won’t the advocates tell us the cost of net-zero?

The Spectator, 17 October 2021

   Nowhere in the world can wind and solar compete without subsidies which drive out more competitive supplies and eventually raise electricity costs and/or taxes. One manifestation of the cost stemming from increased renewables supplies can be seen in the price of electricity. The average electricity price alongside the penetration of wind/solar for the 15 largest economies in the world shows this pattern.  The relationship of wind/solar and price indicates the share of renewables accounts for 64 per cent of the difference in prices between these major economies.  (Other causes include policies on nuclear energy as well as natural endowments and pricing regulations). 

Most of Australia’s more grounded      .... Read online   .....pdf (unedited)

Much Pain for Net Zero Gain

Quadrant, 13 October 2021

   It is this simple: skyrocketing world electricity prices stem from renewables policies. Notwithstanding the avalanche of propaganda we are seeing throughout the country, no wind or solar gets built anywhere in the world without subsidies paid by taxpayers and customers.  In Australia’s case these costs are $10 billion a year in grants and network spending. 

The genesis of the current malaise has been closures of generating plants which have been demonised by the politically correct. In Europe this mainly involves coal.  Those countries that have been particularly severely hit by the present crisis are the UK and Spain, both of which have closed 80 per cent of their coal capacity – and Germany, which has closed about one third of its coal.  Germany also suffers from having closed  .... Read online

The Business Council of Australia’s green schizophrenia

The Sepctator, 11 October 2021

   The Business Council of Australia is a pale imitation of the body that pioneered economic reform and deregulation 30-40 years ago. Nowadays it is dominated by firms in service industries who support green policies which for many of them are important sources of revenue in trading and advisory functions.   

Most of the rump of BCA members involved in mining production, gas and electricity and manufacturing are acutely aware of their dependence on government.  In addition to commercial support this includes protection from the NGO activities that impaired business in recent decades but also against the increasing numbers of green left regulatory and judicial appointments.    .... Read online          .....pdf

Beware a blind charge to net-zero emissions

The Spectator, 30 September 2021

   In the prologue to the UN Glasgow meeting on climate change, Treasurer Josh Frydenberg has been preparing the ground for an Australian statement announcing a goal of “net zero” emissions.  He is doing so on the basis of “if rape is inevitable lie down and enjoy it”, arguing that banks and investors are increasingly requiring net-zero and that there is increasing investor appetite for Australian renewable energy (wind and solar) with $35 billion invested in it since 2017.    

Left unsaid was that all that $35 billion in investment was made possible by the direct and indirect subsidies to wind and solar.  This was made clearer by New South wales Energy Minister, Matt Kean, who has no misgivings about the forthcoming triumph of ren ..... Read online      .....pdf

Australia’s Obscene Green Subsidy Machine

Quadrant, 6 October 2021

   When an ALP government introduced a “carbon price” on electricity in 2012 it was sold as a neutral tax. It was, of course, nothing of the sort.

 

The tax was on the carbon content of fossil fuels, but a neutral tax would have had the new tax replace other imposts. In fact, mandatory levels of renewable energy required of every retailer, which were the major Commonwealth subsidies to wind/solar, were left in place, as were other support mechanisms. In addition, there were state schemes, though at the time these were still modest in scope.

At its 2014 rate of $24 per tonne, Labor’s carbon tax, if applied to all fossil fuel inputs into electricity, would have raised $3.7 billion  .... Read online

If we’re all such good friends and allies, there’ll be no carbon tariffs? Right?

The Spectator, 20 September 2021

   Almost daily, supposedly pro-business outlets publish material calling for net zero emissions, carbon taxes and the abandonment of coal in the cause of curing the synthetic problem of human induced dangerous climate change.  Never do they disclose the existing $7 billion a year cost of subsidies, further boosted by frequent spending announcements like the $1.5 billion pursuing of will o’ the wisp schemes for energy from hydrogen.  Only occasionally, for example in addressing the mounting costs of Turnbull’s Snowy 2 folly, does it refer to other expenses being incurred, and even then it is from a perspective of seeking even more subsidies to renewables.  

The Financial Review’s Jennifer Hewitt is not be the ... Read online     .....pdf

There’s so much wrong with Anthony Albanese’s ‘Green ANZUS’

The Spectator, 15 September 2021

   Rehearsing what he says is Labor’s long commitment to the American alliance, Anthony Albanese has sought to modernise this, saying, “ On coming to office, I will make comprehensive US-Australia co-operation on climate change a hallmark of our alliance.” 

That agenda is being set by political commentary on the recent IPCC report’s climate forecast.  The report, delivered last month, contained some concocted data on previous centuries, temperature data that disappeared the warmer climate in Roman times and the Viking era and cooler eras post 400 AD and in the four centuries to 1850.  That apart, the recent IPCC report was rather less gloomy than some earlier ones regarding adverse temperatures and climatic .... Read online     .....pdf

The ongoing woke undermining of Australia’s economy

New Catallaxy, 7 September 2021

   The march of the woke inspired destruction of the free-market economy continues apace. The additional baggage it is being required to carry is evident from articles and views from the past couple of day’s media.

The Business Council of Australia continues to call for additional costs to be imposed on the firms it is supposed to represent. Its CEO Jennifer Westacott wants to make domestic violence leave a right.  The sixty something says her mother was abused so why should not employers be required compensate women for being assaulted by their husbands/lovers?!                                                                        .... Read online

The UN says no coal by 2030

The Spectator, 7 September 2021

   Reminding us of what a difference a year makes was yesterday’s exhortation by UN Climate Action Team head Selwyn Hart, that Australia abandons coal by 2030. That means replacing electricity from coal which, in spite of facing incessant government penalties, provides two-thirds of the supply.  It also means sacrificing a fifth of our exports.   

 

A year ago, the 2015 Paris climate treaty appeared to be dying. With President Trump coasting to re-election, China simply mouthing support and India using the treaty as a fulcrum to extract rents from the west, only the EU was taking it seriously. And in doing so the EU was completing its decades-long transfer from industrial powerhouse to an interesting place to visit that had outsourced its carbon-emitting   ....Read online      ..... pdf

When Liberals Gussy Up in Green Drag

Quadrant Online, 2 September 2021

   The advice to governments from the Energy Security Board (ESB) recommendations on the post 2025 electricity market has brought howls of outrage from the renewable energy sector. Wind and solar electricity suppliers, who already get half their revenue from subsidies, were hoping for more of the same.  The ESB does envisage additional subsidies in the form of transmission lines to link remote supplies but the centrepiece proposal is a “capacity” payment to generators.  This rewards those generators able to be dispatched by the market manager, as opposed to relying on the weather to make them available.

The ESB policy proposal was motivated by fears that the breakneck increase in supply of inherently intermittent and unreliable ....Read online

Kabul: the harbinger of western decline or the catalyst for Trump’s return

The Spectator, 20 August 2021

   Recently revealed from the fall of Afghanistan is that President Obama exchanged Kairullah Khaikhwa, the public face of the Taliban leadership, along with four other jihadists for Bowe Bergdahl, a United States soldier turned traitor.  One interpretation of this deal is that it stemmed from Obama’s political naivete, or even contempt for his own nation.   

An alternative view is that the deal was the action of an imperious grandee confident that a benevolent gesture to a conquered backward adversary would do no harm. The latter interpretation is consistent with that of a woke administration that trumpets its cultural sensitivity but flies the rainbow flag on the US Embassy in Kabul.  To the  ....Read online      ..... pdf

The IPCC buries two millennia of fluctuating temperatures

The Spectator, 13 August 2021

   Probably nobody in the world has read the 3,949 pages of the latest IPCC report.  But many people have studied the 41 page politically determined, Summary for Policymakers.   Aside from rhetorical conjecture about increased human induced emissions of carbon dioxide bringing more storms, fires and pestilence, the following killer dual chart is placed at the outset of the Summary.   

If this is accurate, it means human actions have changed the climate by at least the 1.1°C temperature increase estimated by the world’s most distinguished and celebrated atmospheric physicist Richard Lindzen.  Lindzen’s fastidious reliance on science, positions him as estimating that a (human-induced) doubling of atmospheric CO2 will mean a 1.1°C global temperature rise. On his estimates, almost all of   ....Read online  ..... pdf

Will big financial institutions destroy our resources sector before the Greens?

The Spectator, 2 August 2021

   Last month Paul Kelly wrote that Australia was being inescapably propelled to adopting a Net Zero CO2 emissions policy, not by green activists or government policies but by global investment funds, “now mobilised in the climate cause”. 

Traditionally, investment funds have been passive stakeholders, buying and selling shares based on prospective returns.  An active approach, based on environmental, social, and governance — ESG — criteria is replacing this. The cornerstone of ESG is net CO2 neutrality.   

The common view is that investment in firms with rich ESG pedigrees is “closely linked with business resilience, competiti  ....Read online  ..... pdf

Another Green Spruiker Takes AEMO’s Helm

Quadrant, 17 July 2021

   As well as subsidy-seekers, governments, international institutions, business leaders and investment managers all conspire to close down cheap energy. The confected notion of harmful climate change is the justification for the dethronement of market forces and their replacement by a new clerisy of politicians and bureaucrats controlling the world’s economies. Though market forces would normally bring the demise of higher-cost suppliers, political and administrative, impediments under the Paris Accord on climate change are designed to prevent this, as my recent piece in The Spectator  explains. 

Although Australia is not (yet) formally adopting “net zero” emissions, there are strong pressures to do so.  In any event, Australia is   ....Read online

Net zero emissions? That will be $3000 for each of you, each year

The Spectator, 15 July 2021

   In a widely accepted assessment, Energy consultant Wood Mackenzie Ltd. estimate the carbon price must rise to $160 per ton by 2030 to restrict emissions to the “net-zero” level that the IPCC claims is necessary to hold global warming to 1.5 degrees celsius.  

In crude terms, for Australia with CO2 equivalent emissions at an annual 500 million tonnes, net CO2 neutrality means a cost of $80 billion a year, or over $3,000 per head. The outcome would also entail closing much of the primary and secondary industry which define a modern economy.  

There is no shortage of interest groups seeking   ....Read online     .....pdf 

Forget the virus. We should be panicked by lost productivity

The Spectator, 30 June 2021

   The very definition of harmful advice is found in the Treasury’s five yearly Intergenerational Report, the latest edition of which was handed down on Monday.  In The Australian, Treasurer Josh Frydenberg acknowledged “there remains much work to be done”, but praised the report for its policy guidance.    

In his piece, Josh quoted one of Paul Krugman’s rare insights “Productivity isn’t everything, but in the long run it’s almost everything”.  

But that quote was probably Josh’s sole contribution to the piece.  You see, Josh has an economics degree and not all of it involved erroneous Keynesian macroeconomics, which advocates  ....Read online     .....pdf 

Also read about the Intergenerational Report on:   Catallaxy Files

Why don’t we hear about the $40,000 per household cost of decarbonisation?

The Spectator, 25 June 2021

   T he Irish Times reports that an IMF study of Ireland estimates that the nation will need to spend 20 billion euros a year – or five per cent of GDP – to meet its 2050 goal of net zero emissions of CO2 from the burning of coal, gas and oil.

In Australia, we are already edging towards the deplorable net zero target while not even formally embracing it. According to RBA estimates, we spend some $7 billion a year on large-scale renewables plus $3 billion a year on rooftop facilities.  

Wind and solar facilities cause so much damage ....Read online     .....pdf 

The western world’s elites conspire to outlaw cheap energy

The Spectator, 16 June 2021

   Aspirations of the “have nots” or “have too littles” have, through their elected representatives brought an inexorable growth in the size of government. Government in most western nations controls over half of GDP (it is 45 per cent in Australia) compared to under 25 per cent a century ago. Ironically, some notionally communist nations that ostensibly favour an enhanced government economic presence have relatively small government GDP shares – China (37 per cent) and Vietnam and Cambodia (23 per cent).   

Notwithstanding their diminishing non-government sectors, western economies have, to date, still retained scope for markets to bring about cost efficiencies and innovation — and hence rising living standards.    

But a corrosive undermining of economic         ....Read online   ..... pdf

The western world’s wealth-busting corporatist conspiracy against hydrocarbons

Catallaxy Files, 16 June 2021

   I have a piece in the Spectator this morning addressing how the world elites have conspired together ostensibly to combat a harmless gas (CO2), no conceivable accumulations of which could have more than a negligible affect on climate.  Politicians, national and international bureaucrats, financial institutions, leading business actors and the ‘intelligentsia’ have agreed to direct investment away from the hydrocarbon energy sources that have been essential to creating modern-day living standards.

As a backstop against capitalist competition finding chinks through the arrays of impediments to using the cheapest sources of energy, the western world is edging towards a complex system of carbon-content tariffs that will reinforce their wealth-busting iron grip.   ....Read more 

The G7, woke corporates and the end of capitalism

The Spectator, 9 June 2021

   The Bank of International Settlements, the G7 Finance Ministers and the Australian Securities and Investment Commission have amped up carbon emissions-based “climate risk” warnings to Australian firms. This represents a new triumphal procession of green activism through international business institutions.  

Environmental crusaders’ colonisation of business is most evident in that nadir of wokeism, the annual Davos meetings, attended (remotely this year) by business leaders who pay up to £480,000 to listen to nagging strictures of figures like Greta Thunberg and Prince Charles.  

The first Davos meeting in 1973 emphasised the    ....Read online   ..... pdf

ScoMo and Josh’s irrational exuberance

The Spectator, 1 June 2021

   Last week the Australian Bureau of Statistics released figures showing new private capital expenditure rose 6.3 per cent in the March quarter. 

Treasurer Josh Frydenberg told parliament, “Manufacturing investments had the biggest jump for 16 years. This is the product of our policies.”  

Well, yes.  There are lies, damned lies and statistics.  

If the increase in manufacturing investment was to be welcomed, it also has to be recognised as a cherry on a paper maché ice cream.  In aggregate terms, the value of new private investment in the March quarter 2021 was just one per cent above that of a year earlier.

 

And, though the December 2020 to March 2021    ....Read online   ..... pdf

Will we get mugged by the return of inflation?

The Spectator, 19 May 2021

   The recent lift in the United States annual inflation rate to 4.2 per cent, the highest in ten years, has caused fears that the massive injection of money into the economy (33 per cent in the latest month) might now be igniting a general lift in prices. Below is the Consumer Price Index (in red) and money growth (in black).                                         ....Read more   ..... pdf

cpi.PNG

Enjoy the sugar hit as we flirt with economic ruin

The Australian, 17 May 2021

   Economic growth requires political stability and secure property rights. Its drivers include low taxation, an educated, skilled workforce, and technological innovation. But the overwhelming influence for nations such as Australia is investment in business activities, roads and other infrastructure.

The budget papers note that Australia has weathered the COVID crisis better than other nations. Treasury maintains, “new business investment has picked up alongside Australia’s broader economic recovery, supported by government policy incentives implemented in response to the pandemic”. In fact, Australia actually shows a disturbing trend in the business investment component of GDP.                    .....Read more   ..... pdf

Budget week is looming - as are electric shocks over power prices and reliability

The Spectator, 5 May 2021

   Last month energy minister Angus Taylor cited analysis by the Australian Energy Market Operator showing falls in wholesale electricity to nine-year lows as “an outstanding result [that] demonstrates how effective the Government’s actions have been”.  For example, he said, “In New South Wales, prices fell to $38/MWh, down from $86/MWh in the corresponding quarter in 2020”.  

Self-serving distortion is unremarkable among politicians and the true situation is far less rosy.  For a start, added to the wholesale price are other elements, one of which, environmental charges, has shown a rapid increase in recent years as a result of the subsidies that have fed wind and solar into the system. In NSW the environmental   .....Read more   ..... pdf

scott-morrison-angus-taylor-energy.jpg

Higher prices, lower competitiveness as Daniel Andrews goes it alone on emissions

The Spectator, 3 May 2021

   Victoria has announced its intent to go much further than the federal government in requiring the substitution of renewable energy for the much cheaper and more secure energy that is provided from its endless supplies of high-quality brown coal.  Compared with the national policy of reducing emissions by 26 to 28% by 2030, Victoria is opting for a 45 to 50% reduction. Not only does this introduce another variation on what should be a national energy policy but it consigns Victoria to further losses of industrial competitiveness and households to higher energy costs.  

Victoria’s intervention in the energy markets is long-standing. The state’s brown coal reserves have formed the basis for its electricity generation for 60 years. Gradually that generation became to be seen as a means of providing jobs and the union-controlled power    .....Read more   ..... pdf

Climate follies: more than half a billion new spending to keep Joe Biden off our backs

The Spectator, 22 April 2021

   The Government is desperate to appear to be doing more in the run-up to Joe Biden’s Climate Summit for Thursday US time. While professing support for decarbonisation, the Prime Minister is looking to spend money in ways that do as little damage as possible to the economy. 

Commendably, Scott Morrison has said Australia would not, “look to reduce our own emissions by shutting down our existing export industries like agriculture, aluminium, coal and gas”. 

Per capita, Australia is already the world’s biggest spender on wind and solar, two expensive electricity sources that have negative value because, supported by subsidies, they drive out lower-cost coal and gas. Our subsidy-supported national spending on wind and solar is twice that of Japan and the US, three times that of Germany and .....Read more   ..... pdf

Joe Biden’s bid to enforce climate club

The Australian, 22 April 2021

   The urgency of the Biden administration in pursuing green policies signifies the prominence of the issue in terms of world diplomacy and domestic policies in the US, Australia and elsewhere.

Even though the long-planned UN Climate Change Conference will take place later this year in Glasgow, the Biden administration determined that it would call a two-day online conference, scheduled to begin on Thursday US time, addressing the issue of energy, climate change and the actions it deems necessary.

The US administration now proposes to spend $US2.9 trillion ($3.76 trillion) on infrastructure, most of which is climate-.....Read more   ..... pdf

Big government is watching you

The Spectator, 16 April 2021

   Sexual issues have come to dominate the news cycle. This week’s headlines have been dominated by Christine Holgate. Last week sexual harassment formally become a ground for dismissal in Australian workplaces, with both parliamentarians and judges subject to the Sex Discrimination Act, in measures unveiled by Scott Morrison and Attorney-General Michaelia Cash in response to Sexual Discrimination Commissioner, Kate Jenkins’ Respect@Work report on workplace sexual harassment.

Like walruses being driven off a Siberian cliff by a handful of polar bears, ministers in the Morrison government are scrambling to avoid femocratic attacks on real or imagined male bad behaviour.

In doing so, they may be changing our politics  .....Read more   ..... pdf

Let us give thanks to politicians for correcting our failings

Catallaxy Files, 9 April 2021

   Discovering and exterminating the hidden code in words is yet another reason why we lesser people need the wisdom and perspicuity of those we elect to Parliament.  Politicians’ extraordinary intellects see the Big Picture and are able to garnish our incomes to correct our misconceptions.

Most of us will have seen ads like the one where a father watching his son competing in a team sport urges him to “stop playing like a girl!”.  Some old geezer, castigates him by asking “what is wrong with playing like a girl”?  While the father might simply have been urging his son to be more competitive, perhaps misunderstanding that girls on average are just as strong, run just as fast, and jump just a high as boys, he was .....Read more

EU strongarming Australia on CO2

Online Opinion, 1 April 2021

   The EU has long sought to impose its carbon dioxide abatement policies on the rest of the world. A major setback to this was the Copenhagen climate summit in 2009 where Kevin Rudd sought to play a major role. Clearly operating under the EU Commission's strategy, the European Ambassador in Canberra Australia, Michael Pulch, has been making increasingly aggressive threats to Australian market access.

He now says we will face tariffs unless we further lift the penalties we place on the use of the low cost, high CO2 emitting coal that accounts for two-thirds of our electricity generation. In recent developments, the EU Parliament has lifted the bloc's emission reduction ambitions to 55 per cent below the 2005 level (Australia's remain at 26-28 percent ...Read more

Why we must beware American senescence

The Spectator, 1 April 2021

   Sometime in the next five years, the Chinese economy will overtake that the United States.  China’s workforce may already have peaked but still has surplus labour in the 25 per cent of people working in agriculture, a share that is likely to fall to under 5 per cent.  Savings, the engine of growth, as a share of China’s GDP remain well in excess of 40 per cent – twice that of the US (and Australia). 

By 2030, the Chinese economy, even if its growth rate falls to 5.5 per cent, will be 15 per cent greater than the US.  The US will see its growth rate stagnate to below 1.5 per cent under a Democratic Administration seeking income redistribution, diversion of capital to unproductive venues like renewable energy, allocating vast sums to raise  .....Read online   ..... pdf

Biden spectator 1 April.jpg

An Extended Romp Down the Green Garden Path

Quadrant, 24 March 2021

   If you have ever wondered how green absurdities become articles of faith and public policy, look no further than the mainstream and specialist media, which has long ignored the maxim that if something seems too good to be true then it probably is. Case in point: the rise of Sanjeev Gupta and, just at the moment, the state of the “green steel” titan’s empire as it wobbles on the brink. For those who haven’t been following the story, the BBC has a very good primer on the Indian tycoon’s woes, albeit focusing almost exclusively on his UK operations.

Closer to home,  those who look askance at the way woke world fantasies of cheap renewable energy are endorsed with taxpayer cash will know of Gupta from his much-lauded arrival in Whyalla, the            .....Read online

Saving the Portland smelter: one problem solved, others created

Catallaxy Files, 20 March 2021

     With its rescue package of a low-cost electricity supply for Victoria’s Portland aluminium smelter, the Commonwealth and Victorian governments have reprieved the smelter from a hangman’s scaffold that they themselves built.

The Portland aluminium smelter, along with Tomago (NSW), Boyne Island (Queensland) and Bell Bay (Tas), is among the nation’s highest value-adding manufacturing facilities.  Aluminium smelting accounts for about 12 per cent of total electricity usage.

These facilities located to Australia during the 1980s in response to our dependable, coal-based electricity supply, which became  .....Read online

Green Eurocrats threaten our industries

The Spectator, 17 March 2021

     The EU has long sought to impose its carbon dioxide abatement policies on the rest of the world. A major setback to this was the Copenhagen climate summit in 2009 where Kevin Rudd sought to play a major role.

Clearly operating under the EU Commission’s strategy, the European Ambassador in Canberra Australia, Michael Pulch, has been making increasingly aggressive threats to Australian market access. He now says we will face tariffs unless we further lift the penalties we place on the use of the low cost, high CO2 emitting coal that accounts for two-thirds of our electricity generation.

In recent developments, the EU Parliament has lifted.....Read online  .....pdf

Why did Cormann get the top job at the OECD? His track record shows he won’t upset woke globalists

The Spectator, 15 March 2021

     Having gone to considerable lengths in lobbying for one of our very own, former finance minister Mathias Cormann, to become Secretary-General of the Paris based OECD, the Government — at least the international set – would be very pleased with itself.    

Unfortunately, the OECD has long outlived its former fervour for economic rationalism: balanced budgets, low tariffs, and small government that leaves competitive free markets to be the essential supply force (with agriculture always an exception given the protectionism of its key European membership).   

In more recent times it has focussed on decarbonis .....Read online   .....pdf

The Cormann factor

Catallaxy Files, 14 March 2021

     The OECD in times gone by was the spearhead of economic reform promoting smaller government, free trade, dismantling of industry support (with agriculture always an exception given the protectionism of Europe and Japan).

In more recent times it has focussed on decarbonisation, gender issues (there is a “gender portal” and many lectures about how progress-on-gender-equality-is-too-slow).  The OECD is also – probably always was – a proponent of Keynesian stimulus. The present Secretary General is the Mexican socialist José Ángel Gurría.

When Matthias Cormann threw his hat into the ring for the .....Read online

No upside for electricity customers in the early closure of coal generators

The Spectator, 10 March 2021

     The announcement that EnergyAustralia’s Yallourn power station in Victoria is to close in 2028, two to four years earlier than had been expected, is an inevitable outcome of the subsidies that governments provide to wind and solar. Yallourn supplies one-fifth of Victoria’s electricity and about eight per cent of that in the National Electricity Market.  

The rapid expansion of wind and solar – all of which is subsidised – has seen their market share lift from virtually nothing 20 years ago, to over 20 per cent.  Because it is subsidised and receives payment even when (as is increasingly the case) wholesale prices are negative .....Read online   .....pdf

If Craig Kelly wants to strike while the iron’s hot…

The Spectator, 28 February 2021

     When he resigned from the Liberal Party last week, Craig Kelly signalled that he would be seeking to highlight the catastrophic consequences of failed energy dogmas. Indeed, he flagged that energy policy was the one area where he could well vote against the government.

Kelly will have his work cut out in assessing what to target among the $7 billion a year multitudinous subsidy schemes for renewables overseen by ministers more intent on placating green activism than restoring a low cost, reliable electricity supply and green activists actually controlling state government policy.

An immediate issue concerns the Clean Energy Finance Corporation (CEFC), just one government institution in the energy   .....Read online     .....pdf

A warning on windpower from deep in the heart of Texas

The Spectator, 17 February 2021

     Were the South Australian blackouts in 2016 precursors to those that have occurred in Texas during the past few days?   

In both cases, an electricity system that has been force-fed with subsidised wind and solar suddenly failed.  The total blackout that was seen in South Australia was more severe than the Texas failure but in both cases wind and solar played a prominent role.  Those renewables normally account for 23 per cent of the electricity in Texas.  This is somewhat less than in South Australia where wind/solar is half of supply but the inherent intermittency of wind in South Australia is cushioned by links to Victorian coal.    

Texas, without similar such links, saw 98 per cent .....Read online     .....pdf 

No, the climate wars aren’t over

The Spectator, 11 February 2021

     For over a dozen years, shills in the media and among the subsidy-seekers have been declaring the ‘climate wars’ to be dead.  Yet the disputes over policy involving reducing carbon dioxide emissions, having previously dethroned prime ministers Rudd, Gillard and Turnbull, continue to be central to Australian politics. Anthony Albanese has indicated, notwithstanding Jennie George warning about the ALP losing its worker constituency by getting too cosy with the greens, that he will embrace legislation for “net zero” emissions.

Australia has incurred more costs per capita in suppressing greenhouse gases than other countries.  Major programs for .....Read online     .....pdf 

Pressure is on as developed world champions net zero

The Australian, 4  February 2021

     Energy and greenhouse gas emissions are once again central to political turmoil in Australia.

The opposition has moved Mark Butler, its most active promoter of the “green revolution”, from climate change and energy policy control but offered no indication that its policy will change. Indeed, Butler’s replacement, Chris Bowen, has warned jobs will be decimated if the nation does not move away from carbon-intensive industries.

In expressing faith in renewable energy, such views portray a remarkable incuriosity about why all the world’s rapidly growing economies, including China, India and Vietnam, are using coal, not     .....Read online     .....pdf 

Energy prices: the new fault line in politics

The Spectator, 28 January 2021

     Energy has emerged as the clear new faultline in Australian politics. We see today Anthony Albanese is removing his fellow Left faction member Mark Butler from the environment portfolio in a bid to boost not just Labor’s electability, but his chances of survival. Yet the issue is not just a matter for the ALP.

The Nationals are saying they want to see 800,000 new manufacturing jobs in the next 15 years.  This is less ambitious than at first sight but it would mean over a fifth of new jobs being created in the sector that has seen its share of jobs shrink from 15 to 7 per cent over the past 30 years. 

The idea is to leverage the jobs from our intrin   .....Read online     .....pdf 

ScoMo runs up the white flag on carbon

The Spectator, 25 January 2021

     It was only at midday Friday The Spectator Australia asked Will Australia face carbon tariffs under the Biden regime? By that evening, the Prime Minister had pre-empted any trade war with an immediate surrender or, as his spin on the front page of The Weekend Australian put it, declaring that the Politics of carbon has ended.

The Biden Administration’s flurry of energy and carbon emission-related measures during its first day have had an immediate effect on Australian policy, with Scott Morrison declaring that political debate about reaching a carbon-neutral future is over.  

Overturning Trump’s policies, Biden has recommitted the United States to the Paris Climate Accord, rescinded approvals for  .....Read online     .....pdf 

Will Australia face carbon tariffs under the Biden regime?

The Spectator, 22 January 2021

     Day 1 of the Biden Presidency saw the reversal of several of the Trump administration’s environmental policies, including tighter vehicle emissions standards, a moratorium on oil and natural gas leases in the Arctic National Wildlife Refuge and revoking the permit for expanding and re-routing the Keystone oil pipeline from Canada to the Gulf of Mexico. Biden also announced that the United States will re-join the Paris Climate Accord and has previously raised the possibility of a carbon tax.   

These and other measures are likely to undermine the conditions that have given low electricity costs to many parts of the US and made the US an oil and gas net exporter for the first time in 60 years.   

But as is the case around the world, business in  .....Read online     .....pdf 

Why is so much big business leaning left – and what will it mean for jobs and growth?

The Sepctator, 18 January 2021

     One of the truly remarkable developments over the past half-century is the reversal and the relative flows of electoral funding going to parties of the right and parties of the left.  

Fifty years ago, parties of the right had a colossal advantage tempered only by support of the left by unions.  In the recent United States election, the Democrats outraised and outspent the Republicans almost to two to one.  Open Secrets adds, “Even when excluding the money spent by billionaire presidential candidates Michael Bloomberg and Tom Steyer, Democratic candidates and groups have spent $5.5 billion compared to Republicans’ $3.8 billion.”  But that is also remarkable in so far as two billionaire candidates were seeking to represent the Democ .....Read more     .....pdf 

Yes, the energy system is broken – but because of ministers, bureaucrats and regulators rush to renewables

The Spectator, 7 January 2021

     Kerry Schott, head of the Energy Security Board, the most senior of the dozen or so Australian regulatory bodies, is scolding state ministers for trying to “speed up” what she sees as an inevitable transition to renewable energy.   

Schott’s focus on state interventions is a response to the new assertiveness of state government in providing renewable subsidies through power purchasing agreements with renewable suppliers and forcing vast increases in expenditure on transmission and on-grid management.    

But for 2018/19, as shown below, state government subsidies to wind and solar were dwarfed by those from the Commonwe .....Read more       .....Pdf

Doug Anthony, not the Hayseed of Popular Memory

Quadrant Online, 23 December 2020

     For a period of nearly six months in 1979, as the Trade Department’s chief economist, I was seconded to become Deputy PM Doug Anthony’s Acting Principal Private Secretary. Nowadays the position is called Chief of Staff but in those far-off times ministerial staff were only one quarter as numerous as today.  The job meant speech writing and providing briefings on other departments’ Cabinet submissions.

Anthony himself, though affecting the air of a hayseed, was well read and open to different ideas.  He was appalled at the Whitlam Government’s policy excesses — though the extremism of some of those have been since surpassed by Coalition governments!  Naturally, he shared none of the Whitlam government’s hostility to the mining industry which led it to micro-managing price negotiations, but it was not until the  .....Read more

The state have hijacked power policy – and activists are coming for the sceptic’s seats

The Spectator, 17 December 2020

     State governments have now taken control of electricity policy from the Commonwealth. Although state control potentially allows alternative approaches to be tested and compared, all states currently have similar policies. They are signing purchasing agreements with renewable suppliers and requiring customers to fund the associated transmission, batteries and pumped hydro, which is needed to shore up the intrinsically erratic supply that wind and solar generation entails. Energy Ministers Matt Kean in New South Wales and Lily D’Ambrosio in Victoria are now doubling down on the renewable energy-oriented policies pioneered by South Australia, policies that delivered crippling outcomes in terms of price and reliability.   

The Commonwealth has become little more than a paymaster supporting state measures, with a fire-fighting role to avert or .....Read more       .....Pdf

Adding to our climate change woes, Garnauteconomics is back

Catallaxy Files, 11 December 2020

     Now that they have assured themselves of a Biden victory, the forces profiting from Australian deindustrialisation – the woke and subsidy seekers – are rampant.  The AFR has long benefitted from its renewable energy clients.  Today it featured Garnauteconomics in urging we impose further burdens on the economy by intensifying the assault on modern energy.

Net zero emissions is the modern clarion call.  Oblivious to this requiring a carbon tax of $190 per MWh tax according to the IEA estimated or $650 per MWh estimated in an NZ government analysis, Garnaut urges us to push ahead with new impositions, saying the

big risk to Australia is that it will be left isolated from its        .....Read more  

Subsidies drain power from the electricity market

The Australian, 2 December 2020

     Last week’s virtual Climate and Energy Summit screened politicians, industry leaders and bur­eaucrats, many of whom have been responsible for destroying the world’s most competitive electricity industry. The sledgehammer has been subsidies through regulations and government spending, which are running at $7bn a year.

Speakers included US Democratic Party activist Audrey Zibelman, who came to Australia as a refugee from the 2016 Trump victory and is returning as a Google executive to help refill the Washington swamp. Zibelman heads the Australian Energy Market Operator, which she transformed into a policymaking body fostering increased renewable energy supplies by spending $17.4bn on new .....Read more      .....pdf

Will a Biden win put pressure on our power prices – and more – with climate demands?

The Spectator, 18 November 2020

     Australia will face much-increased pressure to increase its greenhouse gas emissions abatement if Joe Biden is inaugurated as president on 20 January next year; pressures that may even encourage us to redefine our economic and political relationships.   

Biden’s Climate 21 policies” is his blueprint to reorientate the economy towards the climate-change programs that are central to his political manifesto.  Climate 21 would establish a National Climate Council to move the U.S. and global economy to a low-carbon trajectory. A Biden Administration will rejoin and revitalise the Paris Agreement and will publish a four-year Climate Ambition Agenda containing action plans for “greenhouse gas mitigation”.....Read more      .....pdf

Joel Fitzgibbon’s departure shows the new fault line in Australian politics

The Spectator, 11 November 2020

     Joel Fitzgibbon’s resignation as shadow minister for resources and agriculture and his departure to the Labor backbench is symptomatic of the new fault-line in politics.

 

Belief in catastrophic climate change activates policies for agriculture, energy, manufacturing, product standards, recycling and water – all the way to zoology. Irrespective of the absence of human-induced climate change and climate emergencies – bushfires, hurricanes, coral loss, heat waves etc – alarmists’ control over government institutions, the education establishment and the media has led many people to unquestioningly accept the imminence of harmful human-induced climate change.     ..... Read more    .....pdf

Joe Biden’s Green New Deal is a setback for jobs and income

The Australian, 11 November 2020

     Last week’s was America’s most important election, but it also has profound implications for Australia. The Green New Deal is what most distinguishes the Democrats’ program from that of President Donald Trump.

As Jennifer Oriel has noted, Kamala Harris and ­Alexandra Ocasio-Cortez plan to use energy policy not only to fundamentally reshape the American economy but as a means of redistributing wealth and income to “low-income communities, indigenous peoples, and communities of colour”.

With the Green New Deal, the Democrats’ policy target is ­focused on zero net emissions of CO2. This means eliminating coal and gas and sharply winding back oil consumption. Nuclear power as an alternative has no place. .....Read more  ..... Pdf

Has climate change replaced socialism as the dominant political divide?

Catallaxy Files, 11 November 2020

     With the US Presidential election still undeclared and the ALP joining the Liberals in tearing itself apart on climate policies and support for renewables, I had two pieces published today.

The first in the Australian (ungated version here) observed how a Biden victory “will bring increased pressure on us to introduce more regulations, subsidies and other measures to reduce domestic emissions. One upshot, aside from higher household electricity bills, will be closure or contraction of Australian industries previously benefiting from low cost energy. A corollary is lower living standards.”

The second article in The Spectator concluded, “Donald Trump, in renouncing the carbon agenda, was poised to undermine it .....Read more 

Subsidies Blowing in the Wind

Quadrant Online, 29 October 2020

     Victoria Bitter, Bunnings and miner South32 have joined the banks in being the latest to proclaim their carbon free emissions, signalling a certainty, at least from firms’ PR departments, that the future belongs to renewables.  Nations around the world – the latest being South Korea – are committing to carbon neutrality thirty years hence. The triumph of renewables was seemingly underlined by South Australia going from zero to hero. On Sunday 11 October, solar alone powered the whole state for an hour, apparently wiping away the dudgeon renewables incurred by causing a statewide blackout in September 2016.

With all the creativity involved in finding ways to avoid reporting Hunter Biden’s laptop contents, the righteous within the media ..... Read more  

Read the report on the cost of climate policies and renewables:

Reflections on the cost to thesidies to

How Daniel Andrews added another $400 million to the power bill

The Spectator, 16 October 2020

     The Andrews Government is not telling us but it looks like they’ve lost the taxpayer some $400 million in long term power purchasing
contracts. Only a year ago they claimed they’d made a $285 million
profit on those same contracts.


Last November, Victoria’s Auditor–General’s Office waved through 15-
year contracts signed by the state’s Department of
Environment, Land, Water and Planning for renewable energy. The contracts were on a “contract-for difference” basis, under which a price is agreed and the supplier pays the difference to the government if the spot price is higher, while the government pays the difference to the supplier if it is lower. ..... Read more     ..... pdf

National Water Week reveals a policy drought

The Spectator, 23 October 2020

     This is National Water Week.  Its theme is “Reimagining our Water Future”. Proclaiming water to be one of the seven priority areas for agriculture Minister David Littleproud says “In agriculture it’s a case of just add water”.  In fact, water and infrastructure is the seventh priority behind “stewardship”, a euphemism for climate change.  Stewardship “reforms will empower farmers to diversify their income and earn credits under the $2 billion Climate Solution Fund”. In other words, it offers farmers a chance to earn income by avoiding farming.  

In an apparent consensus, both the actual and shadow minister for agriculture have endorsed a National Farmers Federation “Roadmap” to almost double agricultural output by 2030. 

..... Read more     ..... pdf

Budget 2020: Government keeps feeding poison to the power system

The Spectator, 10 October 2020

     The budget allocated $8.7 million to assist the Vales Point generator in New South Wales in a $100 million upgrade that is now virtually complete.  The funding is so conditional that it is unlikely to be used, yet the decision has sparked outrage from the wind and solar lobby — a lobby lubricated by $7 billion a year in subsidies, one thousand times that conditionally offered to Vales Point. 

The subsidies to wind and solar come directly from the taxpayer and, indirectly, from regulations that force consumers unwittingly to accept growing proportions of high-cost wind and solar within their electricity supplies.   

Even excluding direct taxpayer funding,   ..... Read more     ..... pdf

New wind and solar generation being built in spite of low prices

Catallaxy Files, 5 October 2020

     Why, in spite of a glut, are new renewables still being built?

2020, like 2019, will see $9 billion spent on new (large scale) wind and solar generators. That is over 6 GW in each year (Hazelwood was 1.6 GW but could run for 90 per cent of the time, whereas wind runs at 33 per cent and solar less).

An apparent anomaly is that, though the Commonwealth’s Large-Scale Generation Certificate (LGC) subsidy for wind and grid-supplied solar continues to be paid to existing supplies, it is not abvailable for new supplies.  It is capped at 33,000 GWh, a level which will be surpassed by supply reaching 40,000 GWh in 2021. New supplies can only get a Commonwealth subsidy by buying out existing facilities.

Even so, the Clean Energy Regulator expects new supplies  ..... Read more

A Fool’s Bargain Trades Gold for Green

Quadrant Online, 28 September 2020

     Australia’s green-ink profligacy is evident in great abundance in Energy Minister Angus Taylor’s First Low Emissions Technology Statement – 2020, grandly proclaiming “global leadership in low emissions technologies”. Masquerading as a technology fix to all our problems in ‘decarbonating’ the economy, it contained hand-outs from the Australian taxpayer for worthless returns.  It:

  • offered funding for researchers into the ever-elusive modern Philosophers’ Stone, energy (and not the nuclear version) from hydrogen.

  • promised even more subsidies to capture and bury carbon dioxide from burning coal and gas.

  • said how essential it is to provide more funding for   ..... Read more

Ms Zibelman Pulls the Plug

Quadrant Online, 3 October 2020

Audrey Zibelman, the American head of the Australian Energy Market Operator (AEMO), one of the electricity industry’s four national regulators, is to leave before her contract expires to join a Google startup.  The other national agencies regulating the industry are the Australian Energy Regulator (AER), the Australian Electricity Market Commission (AEMC) and the Energy Security Board (ESB).

Zibelman’s announced departure was not accompanied by universal praise.  One significant electricity industry player, Danny Price, the head of Frontier Economics, has long been dismissive of her understanding of how markets work best.  Though not hostile to her stance in support of renewables, Price said, “I think it is time that we have a respected, competent Australian engineer running AEMO, not  ..... Read more

Inside the federal by-election you may not have heard about

The Spectator, 25 September 2020

     Due to the impending Queensland state election, there has been little discussion about the federal seat of Groom, which is now vacant following the resignation of John McVeigh.  Centred on Toowoomba, Groom is a seat which the Coalition had a 70-30 two-party preference at the last election. 

Matt Canavan is said to be mulling over the switch from the Senate and relocating his family 600 kilometres down the A3 from his home in Rockhampton.  Though the candidate would be ‘Liberal National’, if he did contest the seat, he would be pressured to sit in the Liberal rather than the National Party room, though he could insist on a Nat filling his Senate vacancy.  

Canavan is said to be unwilling to switch to the Liberals but doing so would suit his purposes if he is to make a future run at the prime ministership.   

 

In this respect, Henri de Bourbon comes to mind. A Protestant, he was offered the French throne in 1593 conditional on him becoming a Catholic. “Paris is well worth a mass”, he allegedly said. Crowned King Henri IV a year later, ruling with “weapon in hand and arse in the saddle”, he oversaw a ..... Read more     ..... pdf

Bludgeoning the electricity industry corpse: the government’s technology policy

Catallaxy Files, 23 September 2020

     Compounding the further retreat from a rational energy policy that the government announced last week, this week the government announced the curiously titled ‘First Low Emissions Technology Statement’.

The statement flags further interventions in energy supply and elsewhere to reduce greenhouse gas emissions.

I have a critique of the policy proposals in the Spectator, The low emissions technology statement: a (hydrogen) bomb.  Essentially, the Statement involves an $18 billion ten-year program of support for:

• R&D and energy funding, the highlight of which is funding hydrogen R&D, the “stretch” goal of which is get hydrogen at $2 per kilogram in order to displace fossil fuels; even if achievable this would price hydrogen at over $16 per gigajoule, three times the cost of the natural gas it is supposed to supplant!
• Measures, costing at least $15 billion, to ameliorate the adverse effects of high cost and unstable wind and solar, now comprising 15 per cent   ,,,,, Read more 

The low emissions technology statement: a (hydrogen) bomb

The Spectator, 23 September 2020

     Matt Canavan’s lucid insights published in the Australian this week show how little understanding politicians and officials have of the electricity industry where supply must exactly equal demand and into which they have “force-fed” intrinsically unreliable, high cost renewables.  This created a Frankenstein made more monstrous by every additional piece of tinkering.    

Yesterday’s Low Emissions Technology statement and announcements last week show the government pursuing a further iteration of its tragic energy policy.  It is sinking the industry deeper into a morass of central planning and control conditioned by carbon dioxide mitigation.  

Angus Taylor now defines policy as resting on five pillars: clean hydrogen; energy storage; green steel and aluminium; Carbon Capture and Storage; and soil carbon projects.  It is supported by $1.9 billion in new expenditure commitments.   

All of these pillars can only exacerbate the migration of the electricity industry from the low-cost competitive energy which created present living standards.  The new agenda maintains the ascendency of raucous climate activists and venal renewable energy subsidy seekers in replacing cheap .... Read more     ..... pdf

This week’s big energy announcements? Just another nail in the coffin of low-cost power

The Spectator, 17 September 2020

    The government’s energy policy announced this week is another milestone in the demise of what was once the world’s lowest-cost energy market. The slow fuse priming the bomb was lit in 2001, when Prime Minister John Howard Mandatory Renewable Energy Target (MRET) requiring electricity retailers to include two per cent of exotic renewables (wind and solar) into their electricity supply.  This gave a 50 per cent subsidy – paid for by customers — to these renewables.    

At that time renewables were confidently forecast to be fully competitive within a few years.  Twenty years later wind and solar still require assistance to compete with fossil fuels and their further shortcomings of variable power supply have become more evident.  

But policy augmentations from John Howard’s modest interventions mean wind and solar are now are responsible for over a fifth of demand.  And the MRET subsidies remain in place, compounded by additional support in the form of assistance for transmission, grants and soft loans –- in all, the equivalent to $13 billion a year.  Aside from this cost, these measures bring about highly volatile prices –- especially in the current COVID-abnormal era.  

Moreover, by forcing coal generators to operate uneconomically with stop-start operations both increasing overhead expenses and adding to wear and tear, government interventions have raised costs for those generators, which remain the dominant sources of supply.  This is making them  ..... Read more     ....pdf

Can democracy survive an increasingly biased media?

The Spectator, 16 September 2020

     The ACCC is seeking to force Google and Facebook to pay for the media content they redistribute which has led to their capturing the advertising revenue that previously went to newspapers.  The issue is ostensibly one of bargaining imbalance but behind it is the notion that social media is undermining a vigorous free press.  

 

The struggle for freedom of expression was not one of “the people” but one of what we would today call the liberal elites seeking to promote their political preferences.  It developed in England and in 1640 the press became free, allowing the Puritans to campaign against the Crown.  Having executed the king, the Puritans quickly reimposed censorship in 1643.  This lapsed 50 years later and in what would become the United States, de facto press freedom was formally established in a 1734 trial fronted by Alexander Hamilton; it was enshrined in the First Amendment in 1791.  Many other nations have adopted this, mostly without practicing it.  

Most people, especially the press itself, see unbiased freedom of reporting as a buttress against tyranny.  Objectivity in newspapers, however, only emerged during the middle of the nineteenth century due to advertisers coming to dominate the media’s finances and generally seeking that  ..... Read more     ..... pdf

Governments have made this recession worse. They can’t now impede recovery

The Spectator, 2 September 2020

     A 7 per cent fall in GDP during the June quarter is pretty much to have been expected. Led by spending falls on transport (down over 80 per cent) and in cafes (down 56 per cent), household spending was down 12 per cent.   

But there is no shortage of demand – the household saving rate has shot up from 6 per cent to nearly 20 per cent. Though precautionary saving is doubtless a factor, people have limited opportunities to spend their money rather than being short of funds.

The consumption foregone in the recent quarter is lost – and further losses will be recorded during the current quarter. And there will be lasting changes in demand, including a permanent dip in demand for office facilities, which will require building modifications and adaptations.  Nonetheless, the crisis has not impacted the fundamental production base of the economy — its facilities and skills. Left to itself output will mend and do so quite rapidly – the high pent-up savings, low interest rates will help considerably in this respect. ..... Read more     ..... pdf

Biden’s handlers track away from lunacy in energy policy

Catallaxy Files, 1 September 2020

     Joe Biden’s new claim to be in favour of law and order is not the only area where the Democrats are tracking away from the radical left.  Among the crazy policies that the Democrats have been promoting (with disastrous consequences in California) are a conversion of the US electricity system to wind/solar even faster than Australia’s.

I touched on Biden’s energy policy in the September edition of Climate News.

In May, Biden announced a Dream Team of climate advisers co-chaired by Alexandria Ocasio-Cortez, “the avatar of the Green New Deal”, and John Kerry, architect of the Paris climate accord.  One former adviser not included is Hillary Clinton’s presumptive Energy Secretary, Audrey Zibelman who, since Turnbull fingered her to head the Australian Energy Market Operator, has been mustering new regulatory accretions for electricity in the Australian National Market.

The Dream  Team, which also included Rep. Kathy Castor, the chair of Nancy Pelosi’s Select Committee on the Climate Crisis, seemed to presage  .....Read more

We can still have a V-shaped corona recovery. Here’s how

The Spectator, 11 August 2020

     The shutdown in Victoria is devastating the state economy retarding the national recovery.

The data on which to assess the actual downturn and longer-term national costs is confusing.

Measured GDP has seen a reduction of only 2.75 per cent.  But this is largely a consumption-based measure and has been underpinned by JobKeeper/JobSeeker payments that represent borrowing from the future.  Such payments unsupported by production cannot continue for long in spite of the hopes of Modern Monetary Theory supporters and the illusions of leftists who think the economy produces irrespective of government measures.

A better measure of reduced output is the number of hours worked, which are down 9.4 per cent.  This is imperfect because, on the one hand, largely unproductive public sector employees have been unaffected and, on the other hand, so also have the most productive jobs in mining, agriculture, processing industries, telecommunications and finance.

In terms of costs that have been imposed, government supporting actions will have increased debt by some $330 billion.  The average Australian ..... Read more

How a Premier should shoulder the burden of office

The Spectator, 3 August 2020

brooding%20premier_edited.jpg

We can but wish…

“It’s only fair”, Victorian Premier Dan Andrews said as he announced that he and his Cabinet would work for no payment over the course of the Phase 4 Shutdown he’d just introduced.

“Backbench MPs and their staff, who like a million other Victorians are unable to go to work, will surrender their salaries and accept the same JobSeeker payment as other workers no longer able to earn a living.  We are seeking to introduce the same conditions for all state public servants other than those in ‘front-line’ positions performing services that are even more critical in these troubling times.”

The Premier continued, “As a government, we believe in equally sharing the pain that we, as decision makers, have visited upon the state as a whole.  And the measures will assist in alleviating some of the costs to the economy stemming from these actions.”     ..... Read more     ..... pdf version

Confucian wisdom

The Spectator, 28 July 2020

     The International Energy Agency is just another international agency that Australia finances in order to receive advice that, if taken, would cripple the economy. At the latest Clean Energy summit, IEA’s agitator-in-chief Fatih Birol continued to push for a COVID 19 recovery with its central theme involving substituting high cost renewable energy for coal.

In its coverage of the summit, RenewEconomy, one of many Australian wind/solar energy propaganda publications, applauded Birol’s call for an expedited closure of all Australian coal plants.   

Birol does not stop at exhorting his flock to stop building new coal fired power stations but urges a decarbonisation program for the existing ones as well as for steel plant, cement factories and other emission-intensive facilities. Mentioning carbon capture and storage and hydrogen, he described finding the technologies to do this as “big homework”. Big homework it is! For coal, the massive Australian government spending on CCS – including bankrolling the highly secretive Carbon Capture and Storage Institute – would deliver electricity at three times the cost of existing High Efficiency  ..... Read more      .....pdf version       

Sorry Alan, but Modern Monetary Theory is a load of cobblers

The Spectator, 20 July 2020

     Alan Kohler considers the current crisis provides the ideal laboratory for applying the catchily titled Modern Monetary Theory — MMT.  He sees this as a paradigm change whereby the government just keeps spending money with little concern for debt in order to maintain employment.  He considers this to be a modern version of the stimulus to counteract a downturn, one that goes much further than policies favoured by Keynesian economics.   

Keynesian economics is a prescription for ironing out the peaks and troughs in an economic cycle.  It would never have achieved its current popularity had it been seen as the permanent stimulus that Kohler advocates.  Even in its pure form it had become discredited in bringing about “stagflation” in the 1970s rather than its intendedeconomic recovery.  And in the Global Financial Crisis in 2007, Australia recovered not from the wasteful Kevin Rudd/Ken Henry stimulus policy of “Go hard, go early, go households” but from a genuine increase in demand brought about by the booming Chinese economy. 

Keynesian policy prescriptions as advocated by Keynes himself, at least in his later years, contra Rudd/Ken Henry, involved investment spending to provide a platform of higher future incomes.  The problem with this is that government is likely to be wasteful its allocations and such ..... Read more     .....pdf version

On the Road to Ruin for no Good Reason

Quadrant Online, 12 July 2020

     This week’s announced closure of New Zealand’s only aluminium smelter presents the shape of things to come for Australia. Aluminium producers gravitated to these shores, attracted by some of the lowest electricity prices in the world. Those prices appeared to be sustainable, founded as they were on extensive low-cost and well-situated coal resources.

A wake-up call might have been the closure six years ago of the Port Henry smelter near Geelong. Although an old facility, no suggestion of it being replaced was entertained.  Already, with carbon taxes and governments determined to reject coal in favour of subsidising high-cost and unreliable wind, the bounty of new, world-class new aluminium smelters had become a history lesson.  

Things have only grown worse. 

Australia’s energy politics, in the form of subsidies and other favours to renewables — constantly punted as being on the cusp of being competitive with coal or gas — have left our own remaining smelters requiring government assistance to stave off bankruptcy. Hence, we have government subsidies in place to counteract the damage done by other subsidies!

Australia’s energy interventions come in three flavours:

1 Direct Commonwealth and state payments to renewables and vaunted new sources, with hydrogen ..... Read more

Do we want to follow St Jacinda and price our industry out of existence?

The Spectator, 10 July 2020

     Rio Tinto’s announced closure of its aluminium smelter in New Zealand due to uncompetitive power prices this week is a reminder of the vulnerability of Australia’s four remaining smelters, all of which face sharply higher prices courtesy of government energy policies.  With energy costs comprising about a third of their total costs, smelters are industry’s bellwethers of future energy competitivenessand all four of Australia’s are on national suicide watch.  

As a result of subsidies to wind and solar, these expensive and unreliable energy sources have caused high customer costs, both directly and indirectly, while also diverting the nation’s investment resources into avenues that actually damage the economy.   

Commonwealth and state subsidies to wind and solar energy are running at just under $7 billion a year.  $4 billion of these are as a result of requirements imposed on consumers by the Commonwealth’s Renewable Energy Target and its similar provisions for roof-top installations and measures taken by state governments.  Some $2 billion of assistance to renewables comes from direct subsidies.    

The effect of these subsidies is compounded by their forcing out of production lower-cost coal generators.  As a result, prices ar ..... Read more     .....pdf version

Albo’s Claytons climate policy switch

The Spectator, 24 June 2020

     In the media today, we see two contrasting ALP position papers, by Kevin Rudd in the AFR, and by Anthony Albanese in a Press Club address pre-released to some media outlets.  

Kevin Rudd, in ranting against “the faceless men of the factions” claims among the ALP successes that, “We ratified the Kyoto Protocol, (in 2007) legislated a Mandatory Renewable Energy Target now delivering 20 per cent clean energy, and legislated twice for a carbon price only to be defeated by the Liberal-Green coalition”. 

Rudd’s measures accelerated the trend to subsidised wind and solar, the upshot of which became clear in 2016. At that time, the increased market share of difficult-to-control intermittent generation finally forced the departure from the market of two very significant coal generators, the Northern in South Australia and Hazelwood in Victoria. The upshot was first, the collapse of the South Australian electricity supply system, demonstrated the vulnerability of a system that is dependent on renewables, and secondly the doubling of the wholesale costs of electricity.     ..... Read more     ..... pdf version

A Democracy if We Can Keep It

Quadrant Online, 18 June 2020

     In an AFR column, former Liberal leader Alexander Downer has reprised a conversation with the late Lord Carrington in which Britain’s one-time Home Secretary suggested democracy would struggle to survive. It was a view Downer rejected at the time but of which he is not now so sure.  I have visited this theme in the past – for example herehere and here — and in these times of madness, when popular movements demand the sacking of entire police forces and an incident in Minneapolis sees statues of Captain Cook vandalised in Australia, I return to the theme with a marked degree of pessimism.

The reverence for democracy arose only over the last a century or so. Prior to then, rule by consent – especially with regard to taxation – had been common, as affirmed in 1215 by Magna Carta. But that did not mean rule by the people.  The great Greek philosophers were acutely aware of the deficiencies of mob rule in Athens, and American revolutionaries of the eighteenth century were similarly concerned that the gentle tyranny of King George could be replaced with something much, much worse.  Their belief was in life, liberty and property.  John Adams wrote:

Property is surely a right of mankind as really as liberty … The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.

Like it or not, Australia needs Donald Trump

The Spectator, 18 June 2020

     It is difficult to imagine a more critical juncture in Australian history: 

  • We confront a world downturn, accompanied by a new kind of cold war between the United States and China,  

  • Our international protector, the US is going through a crisis of confidence, if not a populist revolution, that is engulfing the rule of law while within the Democratic Party, younger progressives and socialists are displacing moderates.  

  • Australia’s helicopter money, response to COVID-19 has further damaged an economy weakened by decades of punitive energy and environmental regulatory measures undermining its comparative advantage in manufacturing, agriculture and mining. At the same time, these productive sectors have been carrying an increasing burden of social services. All this is compounded by the military folly of selecting politically correct soldiers and hardware.  
     

President Trump right now is trailing by 13 points in the polls.  The constellation of forces creating this are the virulently hostile Democrat establishment, pushed further by the rising influence of its younger green left, supported by anti-capitalist organisations like Sunrise and Antifa.  They also include the Never Trumpers who preferred the corrupt Clintons and now acquiesce in a Democrat candidate under radical  ..... Read more     ..... pdf version

Coronavirus: We can’t spend our way to wealth

The Australian, 11 June 2020

     In addressing the effects of the pandemic lockdown, the Morris­on government has injected $84bn under the JobKeeper and JobSeeker programs and another $688m for home renovations. The Reserve Bank of Australia has, in addition, engineered cheap loans of at least $90bn, and possibly much more.

Though sometimes referring to these measures as a stimulus, the government would deny it is going down the same path as Kevin Rudd, who spent $200bn attempting, ineffectually, to combat­ the global financial crisis.

A justification for this generous support is that shutdown polic­ies causing workers to be evicted from their jobs were taken in the national interest. But now we face an economic slump.

While the federal bureaucracy, and Treasury in particular, is full of credentialed economists, they are, for the most part, Keynesian — and therefore to counter a fall in output they prescribe demand stimuli through government spending, or tax cuts unmatched by spending cuts.

 

A minority would have been schooled in Friedman’s monetar­ism and would favour creating phantom savings, which depress ..... Read more          ..... pdf version

An Endlessly Renewable Source of Green Agitprop

Quadrant Online, 9 June 2020

     Stoking the fires of renewable energy’s purported advantages is the International Renewable Energy Agency (IRENA), an intergovernmental outfit whose chief purpose is to serve as a spigot for endless propaganda. Its official message is that fossil fuel is an archaic source of electricity now being battered by upstart competitors wind and solar. Bear in mind that world electricity supply pans out at 38 per cent for coal, 23 per cent gas and 26 per cent hydro/nuclear. Wind/solar supply 10 per cent.

IRENA tirelessly advocates for renewables, saying they “could form a key component of economic stimulus packages in the wake of the COVID-19 pandemic.” And in the purple prose so common with these green-spruiking agencies it claims, “Scaling up renewables can boost struggling economies. It can save money for consumers, pique the appetites of investors and create numerous high-quality new jobs.” Investment in renewables is amplified by other benefits, the story goes, as it is alleged to bring “health, sustainability and inclusive prosperity.” When it comes to renewables, no snake-oil salesman of old could hold a carbon-neutral candle to the likes of their modern green-lipped urgers.

IRENA would have us see renewable power installations as a key component of economic stimulus packages in the wake of the COVID-19 ..... Read more

Is a COVID based slump causing an energy policy re-think?

Catallaxy Files, 2 June 2020

     I have a piece in the Spectator this morning that builds upon the challenging commentaries by Senator Canavan and Craig Kelly calling for termination of subsidies to renewables and leaving the Paris Agreement under which Australia agreed to reduce its greenhouse gas emissions.  These measures, and those earlier under the Kyoto Accord, drive up energy costs and are destroying manufacturing which would be flourishing under the low energy costs we could have.

Some in the ALP, especially Joel Fitzgibbon representing a coal mining seat, also agree.

Australian electricity supply has, in the course of 20 years, moved from just about the cheapest in the world to one of the most expensive.  The present relative position is indicated by this graph. ..... Read more

If we want to rebuild manufacturing post coronavirus, we need to cut the cost of energy

The Spectator, 2 June 2020

     In one of the most challenging commentaries by a senior politician, former resources minister Matt Canavan, advocates leaving the Paris Agreement under which Australia has agreed to take actions that will reduce its greenhouse gas emissions.  He argues that Australia cannot afford to meet the treaty obligations which require replacing electricity generated from coal by expensive wind and solar. The subsidies this requires drive up the cost of energy and, with our high wage economy, prevents us having a vibrant manufacturing sector.  

Steep electricity price increases have undermined the nation's ..... Read more 

 ..... pdf version

Snip20200601_36.jpeg

Energy policy disaster continues; more intervention, less market

Catallaxy Files, 21 May 2020

     The Commonwealth keeps pressing policy issues that, on the one hand, dilute the spending egregiously allocated to renewables but then divert it to the failed carbon capture and storage (CSS) adventure and to the highly speculative unleashing of cheap energy from hydrogen.  It released a report of an activist-stacked and serviced committee chaired by Grant King that promoted this, as well as inching the nation closer to a cap-and-trade emission reduction program.  I wrote this piece for The Spectator yesterday.

In a new initiative, the government has again appointed another committee of people who are wedded to the green energy revolution to advise on new gee-wizz tech issues.  It will get the answers it expects to get and embark on another spending spree.

The government has also provided yet another “road map” compiled by the environment department for a grateful minister. This favours gas (which it says is cheaper than coal – an absurd statement regarding Australia) and the colossally expensive pumped storage option.  Like all previous reports it predicts the dawn of an era when renewables will be the cheapest form of energy but does say they need to be “firmed” by attendant supplies of controllable energy (hence gas and pumped storage).      ..... Read more

Why is the Morrison Government leaving the back door open to a carbon tax?

The Spectator, 20 May 2020

     As part of the ABC’s climate conspiracy agenda, Four Corners this week highlighted the “anger” at the government from the senior mandarins from its failure to deliver their goal of a carbon tax.  Their preferred approach was notwithstanding the tax rate would today have to be $US100 per tonne, a staggering $80 billion a year impost.

Also unmentioned was government action on the chimaera of climate change that presently costs over $4 billion a year in regulatory and direct funding. Included in this are regulatory requirements to support wind and large-scale solar (at a cost this year of $1.1 billion) and rooftop solar which this year is costing $1.7 billion.   

There are two components of the Commonwealth’s Climate Solutions Package of direct spending budget on emission reductions.  The first is a “$2 billion Climate Solutions Fund to support Australian farmers, businesses and communities to adopt new technologies that reduce ..... Read more          ..... pdf version

Gassed-Up and Light-Headed for Hydrogen

Quadrant Online, 11 May 2020

     There can be no doubting the reversion of businesses’ political advice to self-interested advocacy, in contrast to the glory days of 40 years ago.  At that time there was a strong push for deregulation, but industry leaders have since backslid into promoting their particular interests, seeking subsidies (especially for energy) and, not unrelatedly, virtue-selling to deflect NGO criticism and its associated damage to share prices. I have a piece in The Spectator that addresses this.

The advice from businesses and their representatives is now best politely ignored.  Firms willvirtue-signal but in acting on the advice they proffer – usually focussing on calls for some form of carbon tax – they face the test of the marketplace.  As I note, business success is dominated by iron laws of profit. Those leaders who implement measures that veer too close to the quicksands of virtue-signalling will be swallowed by it.

In today’s AFR, the superb Joe Aston illustrates this by focussing on Rio Tinto which, having sold its coal interests, has recently assumed the pole position among the climate alarmists. Rio is, with Shell and BHP, dominant among the international Energy Transitions Commission (ETC) which this month has     ..... Read more

Whatever happened to economic leadership from business?

The Spectator, 11 May 2020

     Having reached the pinnacles of their profession, business leaders have earned the right to speak with authority and have become accustomed to having that authority recognised. Their success stems from mastering the intricacies of their own firm: what to buy and sell, how to make savings, what product innovations to adopt and so on. But these skills rarely metamorphose into political leadership – indeed Donald Trump might be unique in this respect among world statesmen.     

A key reason for this is that business leaders have one overriding goal, maximising the wealth of their shareholders, whereas political success measures are diffuse.  

Not having time to master wider political issues, business leaders tend to relate national interests to those of their firm, immortalised as “What’s good for General Motors is good for America”, in the (misquoted) words of a former GM president.  Beyond this, business leaders    ..... Read more          ..... pdf version

The COVID lockdown and spendathon – was it worth it and what is to be done?

Catallaxy Files, 7 May 2020

     I have a piece in Quadrant where I estimate the person-years lives saved in Australia at 80,000. Each person-year is worth, on the government’s data, $219,000, hence saving is quantified at $17 billion.

The cost in outlays and lost production I estimate at $235 billion, fourteen fold the benefits in lives saved.

If however the initial health experts estimates of likely deaths without a lockdown had proved accurate the value of the lives saved would have been $526 billion, ostensibly far in excess of the costs incurred.

But we have to be wary of applying these high values per life saved in the context of very large numbers since costs per person become increasingly unaffordable as the numbers to be saved increase. More importantly, we have to have a better fix on health projections than one that, in this cas ..... Read more

The Lockdown Strategy Called to Account

Quadrant Online, 7 May 2020

     Writing in The Australian, Janet Albrechtsen has pointed out that the statistical value of life used in regulatory assessment is $4.9 million for someone expected to live another 40 years — $213,000 per year  Such measures are income-dependent; in the US the value was put at $9 million and a 2012 study for Turkey put it at five and a half years per capita income or $59,000. Such measurements offend self-righteous claims that “every life is priceless” but such notions, if followed, would impose costs that would bring about other and additional loss of lives.​

banjo-mask.png

While Albrechtsen’s column is written in the context of coronavirus expenditure, she does not extend it to examining the worthiness of..... Read more

Revealed: the true cost of our stimulus spending

The Spectator, 7 May 2020

     Relative to GDP Australian government spending to address COVID-19 has been among the highest in the world.

The Morrison government seems pleased to have been a world leader in mortgaging the future to combat the crisis.  Its package, totalling $320 billion, comprises five elements: 

  • The PM’s initially announced health spending $2.4 billion 

  • JobKeeper and JobSeeker business support $168.78 billion 

  • Credit support$125 billion 

  • Access to superannuation$0.876 billion 

  • Income support$23.839 billion 

..... Read more                    ..... pdf version

Total cost stimulus graph.png

A COVID-19 economic recovery program

Catallaxy Files, 23 April 2020

     While the green left will use the crisis to march us to lower living standards and greater losses of liberty, the Commonwealth Government is making the right noises about reducing the tax and regulatory measures that have held us back.  But do they know where to start?

The tax reforms are easy: pare back company taxes and other imposts on production.

I offered some advice in regulatory refom in an article published in the Spectator.  These regulatory sins comprise areas where real economic dividends can be made, collectively greater than the losses by the Commonwealth’s generosity with our savings and future incomes.  These are

  • Strip Back the Fair Work Commission’s functions to become similar to those in other jurisdictions: oversighting issues of unfair dismissal and human rights abuses etc.

  • Align land regulations for new housing development with those in Germany and US States like Texas, the Carolinas and Ohio, thereby reducing the cost of a new home by $200,000.

  • Curtail the creation of new national parks and address other land use measures that prevent farming, mining and logging in vast tracts of  ...... Read more

Scott, Josh and Mathias: here’s how you get us out of this mess

The Spectator, 22 April 2020

     The Morrison government has flagged tax cuts and aggressive deregulation as part of a pro-business road to economic recovery. A focus on stimulating rapid growth on the other side of the coronavirus pandemic is expected to guide October’s federal budget. — AAP report, April 20.

Future government action must focus strongly upon savings as a result of the 15 per cent of GDP ($340 billion) that has been spent on combating coronavirus.   

Fifty years ago, the Commonwealth budget accounted for 18.3% of GDP. In the years since then, even before the current spending spree, the share had grown to 24.6%. Right now, with an extra $340 billion budgeted, the share of GDP will have become 35 %.   

The nation’s phenomenal intrinsic wealth allowed Australia to prosper in spite of the growing claim on income by a largely     .....Read more     .....pdf file

Green Snouts Sniff a COVID Windfall

Quandrant Online, 16 April 2020

pollution pie chart.png

     The Pope, deprived of the counsel of Cardinal Pell, the Church’s most astute voice, foolishly called coronavirus “nature’s response” for failures to act on climate change. It was, therefore, hardly surprising that coronavirus would be recruited to push for additional renewable energy subsidies to reinforce those that have already created today’s high cost, low quality electricity.

Coal Wire, an anti-fossil fuel publication, was quick to swoop on a Harvard study that said the pollutant PM2.5 exacerbated coronavirus and that coal power stations were an important source of the pollutant.  Actually less than 5 per cent of PM2.5 particulate emissions come from energy production.

Also fast out of the blocks was the anti-fossil fuel head of the Paris based International Energy  .....Read more

Does the Morrison government have the skills to lead us out of the recession it has created?

The Spectator, 16 April 2020

     The $320 billion in costs the Australian government has incurred to sustain and stimulate the economy in light of the COVID-19 crisis is money spent for consumption without it attracting any corresponding production. It is a permanent loss that can only be retrieved by increased production. Two areas where reform could compensate for this loss of revenue are the cessation of wasteful spending and regulations in water and energy, where total savings of $50 billion are available.

But in addition to these direct savings, removal of these regulatory and taxpayer costs would unleash even larger productivity benefits in the two sectors.

For water, in Australia’s most important irrigation area, the Murray Darling Basin, the government’s actions in buying up 20 per cent of irrigators’ water for spurious environmental purposes has brought a tenfold increase in the water price, and hence its cost to farmers. At least $7 billion could be saved by the government reselling the water it holds to irrigators and recalling the funds yet to be spent.

In addition, the economy would make other gains. Water is an essential input to agriculture and the increased output restoring ..... read more      .....pdf version

ScoMo’s gone as crazy as Kev, but we can still save the economy

The Spectator, 2 April 2020

     When the Prime Minister and Treasurer appointed Stephen Kennedy as the Treasury Secretary, they opted for a bureaucrat who had been the architect of Turnbull’s potentially disastrous carbon tax. They would also have known him to have been a senior adviser on Kevin Rudd’s exorbitant spendathon following the 2008 global financial crisis.

 

Unsurprisingly, the Secretary of the Treasury recommended that the government implement a “Full Rudd” coronavirus program, suggesting the British approach was insufficiently stimulatory.  Ministers need little encouragement to embark on spending sprees but in times past Treasury used to be a brake on their ambitions. 

 

Australia&rsqu