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Dead cats

October 22nd, 2007

The government got its bounce last week, but it looks to have been of the dead cat variety, with the latest Newspoll (taken before the debate) showing Labor ahead 58-42 on 2PP. Of course, the usual warnings about margin of error apply to both this poll and the previous one. There’s nothing to suggest, with any certainty, that there has been any movement away from the average of 56-44 that’s prevailed all year.

The big problem is the perception that the government has fired off all its big guns and achieved nothing. We’re already seeing backdowns on a bunch of issues (Turnbull on nuclear power for example), but they’ll need more than this, or another bounce, to stave off the view that disaster is inevitable. it might not be too late for Howard to pull back a few points by ratifying Kyoto, but he needs to do something quickly.

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  1. Jill Rush
    October 22nd, 2007 at 23:13 | #1

    The big problem is that nothing that the government does is seen as believable. The electorate don’t know what is core and what is non core and they just want John Howard gone. Workchoices Version 3 is likely to cut wages through the importation of cheap and docile foreign labour – something we have already seen signs of.

    The worm incident whilst trivial in itself will resonate for a long time because of the interference in the freedom of the press.

  2. John Bignucolo
    October 22nd, 2007 at 23:20 | #2

    Isn’t is too late for John Howard to ratify Kyoto, or promise to ratify it? I mean he could do it tomorrow, but it runs so strongly against the image he projects as a “conviction” politician that I can’t see him getting any benefit from the move.

    I recall another commenter stating that over the years John Howard and many of the senior members of his Cabinet (eg Ian MacFarlane, Nick Minchin and Alexander Downer) have all used unusually (for politicians) unequivocal language in their rejection of Kyoto, leaving them no rhetorical room in which to manoeuver. To suddenly invalidate years of quite strident opposition won’t do his credibility much good with supporters or detractors.

    Howard’s Heathers on climate change denial (Piers, Andrew, Miranda, The Australian’s senior editorial staff and columnists, the conservative thinktanker s, and half the Liberal backbench) will scream in righteous indignation at his apostasy; those in the community who want something done yesterday will view it as far too little, too late, and give him no credit; while the non-engaged voters, disturbed by the news reports and documentaries they’ve been seeing, but still being willing to believe that John Howard has been acting in the national (and their and their childrens’) interest will wonder what’s changed?

    He may (barely) get better traction with small-L liberals in the area of social policy with a move to remove the discrimation against gay couples. He could argue for it in classical liberal terms — he could even use the “I was a product of my upbringing” excuse again. After all, the Exclusive Bretheren will still support him no matter what, and the conservative Protestants and Catholics have nowhere else to go.

    However, I suspect he will target middle Australia and continue to play to his perceived strength in economic management. There will be a big announcement aimed at doing something to improve housing affordability. It may not be cheap, it may burn a big hole in the surplus, it may be economically unsound or self-defeating, but it will be extremely populist and will be viewed as helping “battlers” get into the housing market, or to keep the house whose mortgage they’re struggling to service.

  3. snuh
    October 23rd, 2007 at 00:04 | #3

    i did think for a bit that howard might try a change on kyoto to seize the momentum. it would massively shake things up (ie, it address the “he’s got to do something” problem) but it also would neutralise one of rudd’s key winning issues.

    but the more i thought about it, it just didn’t seem likely. and he hasn’t exactly been laying the groundwork for it. last week he said:

    “The reason I won’t ratify the Kyoto treaty is: the existing Kyoto treaty doesn’t cover countries like China, and we could be at a competitive disadvantage,” he told Southern Cross Broadcasting.

    “We’d be interested in ratifying a new international agreement that includes all of the major emitters because that would not put us at a competitive disadvantage.”

    considering howard’s only winning issue now seems to be the economy, i can’t see how he can possibly backflip on this stuff. not to mention how desperate it would make him look.

  4. observa
    October 23rd, 2007 at 01:39 | #4

    There is no doubt the change is on now and not even a world sharemarket crash and sub-prime fallout in the campaign can stop that now and that could well happen. Which leads to a discussion of where to for the new govt from here.

    Rudd Labor has moved substantially to embrace middle class welfare. It’s ed tax rebates for computers and broadband will clearly not go to struggletown. As well with the lifting of the childcare rebate from 30% to 50% it has abandoned one of its great shibboleths on supporting community based childcare centres. Labor is moving in rapidly on Coalition ground and adopted their tax cut plan without hesitation or murmur and even Julia Gillard was always a fiscal conservative now.

    Where does that leave the differences? Iraq and the good war bad war scenario cf Afghanistan. Getting out of Iraq will be easy for Rudd but he could well be left with Afghanistnam. As for Kyoto, that will be no problem signing up for this metoo govt. Nor will it be very demanding judging by results to date. We may as well fail to reach our targets along with the rest of the signatories and there is safety in numbers. As long as we are seen to be moral badge wearing in all the right circles, well and good.

    I expect their industry policy blatherings to be very short lived in our globalised economy, apart from a few handouts to industry, research grants and the like. The biggest handouts will be to big unionised carbon, a policy we will no doubt come to regret like Murray Darling water licences. That leaves the economy in general. For some time Treasury coffers have been full to overflowing with unanticipated surpluses, whilst supposedly families are doing it tough. Whether they really are is a moot point, but one thing’s for certain. Those surpluses are largely not the result of govt fiscal restraint. They are most likely the result of lax monetary policy, no doubt aided by the mining boom. A Labor Govt can spend them and boost inflation and inevitably interest rates. However they are not alone in being awash with funny money and perhaps the real world economy is about to hit the wall with that stark realisation right now. Probably our funny money should go into a fund to buy overseas real investments, particularly in resources, as insurance against a crash of confidence. Spending it domestically doesn’t seem wise. Perhaps Costello’s FF is not as silly as it sounds. More like an insurance fund i fear.

  5. wmmbb
    October 23rd, 2007 at 02:49 | #5

    The cover of the guide now reads: “PANIC”.

    What is to be done?:

    * Arrange more debates?
    * Influence the special mate to launch the holy war against Iran (hopefully not before first getting the ANZAC out of the Persian Gulf).
    * . . .

    It will be at least interesting to see what is decided and to infer the Crosby-Textor advice. We are about to see whether the greatest political genius of our time lives up to the billing.

    The writing would be on the wall for lesser mortals, but who knows what might be steaming our way just across the horizon?

  6. observa
    October 23rd, 2007 at 02:50 | #6

    For those of you wondering about funny money, Gerard Jackson describes the Austrian economists’ view of it here

    Then there’s a central banker scratching his head
    In particular-
    ‘”Central banks around the world have essentially lost control over the markets beyond three or four or five years out,” Greenspan said, noting that long-term interest rates did not rise as the federal funds rate was increased, starting in 2004.’
    and Rudd Labor is about to walk right into it

  7. melanie
    October 23rd, 2007 at 07:15 | #7

    If it is true that the polls consistently show that, given the choice of tax cuts or better services, people consistently prefer better services, it is unclear to me why our leaders plump for tax cuts. Howard’s position seems to be an ideological “small government” one, and I suppose Rudd is just defending his margin – though it seemed to me more like the ‘me tooism’ that finished Beazley off. I was happier about Labor’s prospects earlier this year when it wasn’t Howard setting the agenda in this way.

  8. chris
    October 23rd, 2007 at 07:33 | #8

    Howard cannot make a move without it being greeted with cynacism. He ran too hard, too early this year in an effort to knock Rudd off his footing. His problem though is that as Rudd was repositioning Labor in the middle ground, Howard was running the same old ‘left’ scare campaigns and they rang false. As a result Howard has given himself an atomic self wedgie. The ‘mean and tricky’ tag is firmly fastened to him now.

  9. Crispin Bennett
    October 23rd, 2007 at 07:47 | #9

    “the government has fired off all its big guns and achieved nothing”

    It has fired off its biggest legitimate guns, perhaps. But Howard’s most characteristic and powerful weapon has yet to be unsheathed: expect a race or security scare any day soon. It might even work, given how our carefully-trained electorate has generally shown itself msm-addled enough to fall for such things.

  10. Muskiemp
    October 23rd, 2007 at 08:17 | #10

    Rudd has to deal with todays problems, that child care is unaffordable today, so he has to form policy for todays problems to get elected.When in government a Rudd government can then look at infrastructure, such as a child care facility in every government school.

  11. observa
    October 23rd, 2007 at 08:27 | #11

    Stop worrying about Howard. We’re tired of him and the middle classes have our new mob to look out for now that the tax cuts, 50% child care rebate and tax deductibility for laptops and broadband are in place. You know, L.A.W Ruddy and don’t you forget boyoh. Deductibility for private school fees would be nice, but there’s interest rates, our second homes and super investments to think of first. I’ve been thinking about what to do with all that funny money before it all goes pear shaped. Buy gold ready for the shift back to the gold standard again. We need to get in first before the price goes through the roof and establish a fairly large insurance fund now.

  12. Kymbos
    October 23rd, 2007 at 09:00 | #12

    This Government has turned doing nothing into a policy platform, and made an artform of it. They don’t sign Kyoto, but what do they do? Nothing. Some mutterings about nuclear and clean coal, but no action, no plan.

    For the Government to suddenly act on Kyoto now appears completely disingenuous, given their stated ‘policy’ of complete inaction. What more evidence do you need?

  13. Kymbos
    October 23rd, 2007 at 09:16 | #13

    John, could you comment on this rather vitriolic piece arguing that Reserve Bank monetary expansion is the single cause of inflation in Australia?


  14. October 23rd, 2007 at 09:23 | #14

    John Quiggin’s punch line was, “We’re already seeing backdowns on a bunch of issues (Turnbull on nuclear power for example), but they’ll need more than this, or another bounce, to stave off the view that disaster is inevitable. it might not be too late for Howard to pull back a few points by ratifying Kyoto, but he needs to do something quickly”.

    This seems to have gone over everyone’s heads. Just run this past me again …

    John Howard said that nuclear power is essential if we want to save Australia from global warming. Lots of people know that he is wrong. He doesn’t have another solution. But the important thing is that John Howard actually believes his own political survival is more important than nuclear power or global warming. John Howard would tear up his major policies and abandon his friends “to stave off the view that disaster is inevitable� – there it is!

    Ziggy Switkowski may be seeing his charmed life on a stratospheric salary suddenly evaporating over his cornflakes. First there were 25 nuclear power generators and then there were none. What about all those speculators who threw money at start-up uranium prospecting companies? Nothing is more important to John Howard than staying in power.

    When voters decide which government to elect the “experienced� team look increasingly like the “desperate� team who keep falling back on things they previously said were important. They can’t be trusted. Anyone want to buy a plan for a pulp mill in the Tamar Valley?

    Willy Bach
    Greens candidate for Griffith

  15. melanie
    October 23rd, 2007 at 09:48 | #15

    Willy B, are you giving your preferences to Kevin?

  16. Francis
    October 23rd, 2007 at 10:37 | #16

    Chris (#9), i think ‘atomic self wedgie’ may be the best explanation for this whole election yet

  17. Rod
    October 23rd, 2007 at 11:43 | #17

    John writes: “We’re already seeing backdowns on a bunch of issues (Turnbull on nuclear power for example), but they’ll need more than this, or another bounce, to stave off the view that disaster is inevitable. it might not be too late for Howard to pull back a few points by ratifying Kyoto, but he needs to do something quickly.”

    The problem for Howard with this sort of approach arises from his second big “perception” problem. People simply don’t believe him when he starts changing on this sort of stuff. After the stunts in previous elections any “about face” during the election period simply gets treated with extreme cynicism.

    The “weaponry” that the Opposition could bring to bear, in the form of past quotations, video clips of Howard and his ministers in earlier days, etc both about the Coalition policy in earlier days and the general election period shenanigans that they have been involved in during previous campaigns, would be devastating at a time when the electorate are already extremely sceptical about Howard et al.

  18. BilB
    October 23rd, 2007 at 12:25 | #18

    Can somebody please do a cartoon of a bouncing dead cat with Howard’s face on it. I would like that for my office wall. A good talking point.

  19. Hal9000
    October 23rd, 2007 at 13:34 | #19

    Never in the realm of human political economy has so little been achieved by so much for so few.

  20. October 23rd, 2007 at 14:06 | #20

    It isn’t over, until it’s over. There’s still a month to go.

  21. Hal9000
    October 23rd, 2007 at 15:50 | #21

    “It isn’t over, until it’s over. There’s still a month to go.”

    Isn’t this thread about the post-tax policy polls? And they’re over, done, dusted. No gain for Howard. Does Howard have another $34 billion in the kitty?

  22. October 23rd, 2007 at 16:07 | #22

    Of course now that he’s in charge of a ‘Caretaker’ government, he can’t rattify Kyoto.

    He could always claim that he will, but at this point, that’s probably worse because (a) no one will believe him and (b) he opens himself up to the ‘why didn’t you at any point in the last 11.5 years??


  23. October 23rd, 2007 at 17:46 | #23

    I don’t even think that a national security scare would help Howard now either. Another Tampa would be too late as well. Even Bush attacking Iran would only turn people away from Howard now.

  24. October 23rd, 2007 at 22:38 | #24

    Dear Melanie

    You asked me, “Willy B, are you giving your preferences to Kevin?”

    Melanie, I always remind people of two things.

    Firstly, your vote and your preferences are yours. So, if I told you what to do with your preferences you could tell me where to go and do what you had originally intended.

    I think most people already know, Kevin Rudd’s government will be only marginally better than John Howard’s. I regret to say this because we all need hope. With the Howard government there is no hope – except to get rid of them. It would be really nice to lift this dark cloud from our shoulders. Just on the question of global warming Labor is struggling to move up from Grade 3 while Liberals are between Grade 1 and Grade 2. Neither of the almost identical twins is fit for the job.

    If I could vote without giving either major party a preference I would do that. There are some candidates that I would have jostling for last place. I also think there are some progressives who may be second or third. You have to work it out for yourself. We all do.

    The second thing I have to say is that the national negotiations are not over, so none of the party preference deals have been announced. They will all become official at the same time, as determined by the AEC. So, please don’t ask me to spring the Greens preferences for Griffith on a hungry media (who all read this blog) weeks before these are due to be announced. Just remember too, this is not a marginal seat, so interest will be very limited.

    I only hope that none of our friends will do a preference deal with that party that claims concern for relations, but fails to show concern for any Iraqi mothers and fathers.

    Willy Bach
    Greens candidate for Griffith

  25. observa
    October 23rd, 2007 at 23:34 | #25

    Willy, Howard is just stating the bleeding obvious about nuclear power if we are to be serious about Kyoto targets. Personally I don’t think we are, but we’ll see how wall to wall Labor goes on serious emission reductions over the next Federal term.
    Of course the NIMBYS are everywhere over nukes. Just like they are for windmills in their backyards too. Driven into Canberra lately and seen the ‘This is a windmill free zone’ signs dotting the paddocks? (they prefer organic Hunter Valley apparently) Renewables can only supply a fraction of our needs, because the sun doesn’t shine at night and the windmills don’t go when the wind don’t blow. As for hydro at present well umm.. Tidal and coal sequestration are still in the engineers and accountants imaginations. As for ethanol, well there there could be some good news on the obesity front long term there
    And all the while this is what you’re up against
    60% reductions by 2050 without nukes eh Willy? Now that I gotta see and I’ll be looking for all that ripe, low hanging fruit being plucked over the Rudd Govt’s next term.

    If you want to know where the first nuke power plant could go, ask Joy Baluch, the mayor of Port Augusta in the Saudi Arabia of uranium (no we don’t inhale) She might like to replace that Leigh Creek burnable dirt Al Gore’s so worried about mate.

  26. BilB
    October 24th, 2007 at 09:42 | #26


    Howard is playing the game with most of the cards missing. He is completely fixated on coal and nuclear power. It is moraly unsupportable for one generation to pass onto thousands of future generations a toxic waste management responsibility that those future generations derive no benefit for. That is the Nuclear falacy, full stop.

    And you, in saying that renewables cannot support our needs, are citing from a book with most of the pages missing. True the sun does not shine at night. Equally we all use most of our electricity when the sun does shine. Solar thermal storage is now achieving 10 hours capacity daily which pretty well takes it around the clock. Your argument is dead.

    US corn ethanol thing is a total political farce that will not survive long past Bush. The Americans, with their corn ethanol initiative, are getting one 16/th of the ethanol fuel yield per hectare at a much higher cost than we are achieving here in Australia with cane ethanol.

    Australia has the capacity to produce up to 24 billions litres of ethanol from just 1.2 million hectares of cane fields, and is moving steadily in that direction. And despite some horrendously incorrect information circulating amoungst those who are too lazy to do any real research, this production is hugely carbon reduction positive.

  27. Tom Davies
    October 24th, 2007 at 10:33 | #27


    A cost is going to be passed on to future generations. It will be some combination of:

    a) The cost of mitigating global warming
    b) The cost of storing nuclear waste
    c) The lower standard of living due to more expensive energy resulting in years of lower growth.

    Now I don’t know what these costs are, but it doesn’t make sense to rule out nuclear power on the basis that it imposes costs on future generations. The trick is to figure out what these costs are and choose a good combination — perhaps it’s the case that 2 degC warming, 10% nuclear power and wind but no solar is the optimum, for example.

  28. 2 tanners
    October 24th, 2007 at 11:21 | #28


    It is also worth looking at the CSIRO information on the use of ethanol as fuel in terms of the volatiles released and their potential greenhouse impact. I’m no scientist, but I looked carefully at this issue when the prospect was raised about 3 years ago to ‘rescue’ the local sugar industry.

    The short of it is that in some circumstances, including ethanol in the mix is worse, not better.

    The cane fields themselves are also not models of ecologically sustainable management.

    Moving back to the major topic, I reckon that a latter day conversion to Kyoto will simply be seen as confirmation of the ‘sly and tricky image’. CrosbyTextor must be on overtime right now.

  29. BilB
    October 24th, 2007 at 12:25 | #29

    2 T,

    I am wilfully under informed on the products of combustion issue for ethanol fuel mixes. It is my understanding that there are catalytic solutions to these problems. Be careful to not confuse “products of combustion” (Pollutants) with CO2 emmissions. CO2 is of course the largest part of these but this a closed cycle with the cane CO2 absorption. The cane fields thing is a dynamic. There are very promising tests I heard about whwere the cane is planted with nitrogen fixing plants at the same time. The agressively growing cane quickly overgrows the supplimentary crop but not before it has done the job of fertilizing the soil.

    Tom D,

    Just for starters. The Chernobyl plant is at present getting a new steel containment building. This building will last for 100 years and costs a small 1.5 billion dollars. This process only has to be repeated another 2,000 before the nuclear mess there is benign. Add to that the stock piles around the world of waste that have similar life times and I have no doubt that future generations will pour scorn on ours.

    The Hunter valley open cut kine now has an area of 600 square kilometres. That same area covered in concetrating solar collectors is sufficient to power most of Australia today. And would cost as little as 70 billion dollars to develop. This would be a permanent solution with a running life far in excess of all nuclear and coal proposals.
    Of coarse it would not be in the Hunter Valley, it would be situated in northern inland NSW, Queensland, and Western Australia. This, coupled with geothermal and wind provides a complete all year round 24 hour baseload solution which will have minimal environmental impact.

    Howard ratifying Kyoto now would be perceived as a “scorched earth” action, and would drive the Coalition’s ratings lower.

  30. observa
    October 24th, 2007 at 15:16 | #30

    I forgot geothermal imaginings BilB. Sweet Jesus, wait till the nimbys and doomsayers work out they want to crack the earths crust to pour water down there!

    Personally I think those who sign on to Kyoto will be judged sly and tricky in the broader sweep of the history of GW.

  31. BilB
    October 24th, 2007 at 15:35 | #31


    It has taken me a while to appreciate your sense of humour, but I realise now that you are just poking fun.

  32. observa
    October 24th, 2007 at 17:05 | #32

    Is there any allowance/adjustment in Kyoto for the effect of net immigration? I ask because of this sort of problem for countries like Oz- http://www.news.com.au/story/0,23599,22624582-2,00.html
    Or do we simply shut up shop to facilitate meeting our target?

  33. 2 tanners
    October 25th, 2007 at 08:06 | #33


    The worst volatiles release is in the production of ethanol in the first place, followed by the transfer from pump to tank. The exhaust runs a distinct third. The ecological damage is from chemical runoff and that’s a generational change/educational issue. Heaven knows it took the cotton farmers long enough to catch on that fewer chemicals cost less!

  34. observa
    October 25th, 2007 at 08:57 | #34

    Now JQ says-
    “it might not be too late for Howard to pull back a few points by ratifying Kyoto, but he needs to do something quickly.”
    which got me to thinking about Howard’s position. Now like me he’s a bit of a skeptic on this cap and trade, communard control freak stuff and if events take their course, Mr Metoo and his ‘We were always fiscal conservatives!’ are going to cruise into Treasury sporting their Kyoto moral badges of little real substance. Now remember this is the bloke that sold and hunkered down the GST against these weak kneed naysayers and doomsdayers, so it’s time to put them to the test again with the bold new plan. Off the campaign trail with Cabinet and back to Canberra to get Treasury, Finance and Resources to burn the midnight oil (and boy aint we gunna baldy)on the Carbon Plan. Scrap the metoo tax cuts, they’re on the table for the Plan and you’ve got a week to crunch the new numbers or start polishing your resumes’.

    Essentially beginning fin year 2008/9 the govt will be issuing carbon emission licences, say with an annual licence fee of say $25/tonne of CO2 and each tonne certificate(coupon) will reduce in allowance by 1.5% p.a. until it represents 0.4 tonne in 2048, 2 years before the 60% cuts by 2050 target date. Welcome to known certainty all. We’ll leave it to the market to sort out how best to do it and the players can freely trade the licences on the ASX, to their heart’s content. However, unlike our opponents with their Kyoto handouts to Big Biz that haven’t worked and our forbear’s mistakes with Murray Darling Basin water rights, the people will always own the licences to pollute and the ability to charge for them as any future generations see fit. Then the resulting tax cuts with the initial licence revenue, plus the metoo tax cuts are rolled out with the new tax free threshold and lower marginal tax rate thresholds swamping Labor’s copycat old plan. Then it’s back on the hustings for the last 3 weeks or so hammering the line-’Who do you trust not to sell your children’s future down the river to Big Biz and the Unions like water rights?’ Why the party that reformed the WST, when labor wasn’t and gave your children jobs. Notice too, it allows us to have any level of carbon tax we decide in future, rather than pondering how the hell we’re going to afford to buy back water rights from the Cubby stations now.

  35. observa
    October 25th, 2007 at 09:00 | #35

    Oops- Why the party that was bold enough to reform the WST, when Labor wasn’t..

  36. observa
    October 25th, 2007 at 09:07 | #36

    And the beauty is, Howard can do it now because he wasn’t some moral badge wearing fool wanting to rush into Kyoto, when wiser heads should have always prevailed.

  37. observa
    October 25th, 2007 at 09:42 | #37

    There are a number of benefits with such a planned, reducing coupon emission licence, with annual licence fee. Firstly we can start a market in carbon trading, without the players having to wear the curly conundrum of what an upfront licence is worth today. They can dip their toe in the water and gradually immerse themselves. The govt(we) also have the ability to index the licence fee, or raise or lower it depending on circumstances, thereby gradually capturing the economic rent over time. That’s impossible with an upfront sale. As well it’s administratively simple. We wouldn’t need to send out renewal notices each year for the coupons. One month late with the annual licence fee and it lapses to be re-issued at market rates on the ASX exchange, plus licence fee. Also it doesn’t matter whether Chinese or Kiwis ultimately buy them, they have to pay us the annual licence fee or same deal. Trade them away to your hearts content in the globalised marketplace folks, just pay us our annual licence fee.

  38. BilB
    October 25th, 2007 at 10:40 | #38

    2 T 34,

    I think that you are talking rubbish. Details please.

    Observa 37,

    Howard failed to appreciate that it is the overwhelming opinion of Australians that the Kyoto agreement should be signed. He elevated “Howard’s will” over that of the Australian Public will. That is why he now has the appeal of something left on the footpath by a passing animal. Howard was able to hold the public will in suspension by his overiding self confidence and manipulation of the Coalition party. The public gave Howard the benefit of the doubt, until his very loud claim to be able to keep interest rates low was proven to be false, and the public will has been progressively proven to be correct by scientific opinion. It only takes one small weakness to set off a landslide, and that is what has happened. Howard, in the last 3 years, energised by his total control of the parliament, has been heaping tonnes of dubious policy material on top of the Kyoto fault line, and the interest rate failure has setoff the unstoppable movement of opinion. It is a done deal. The is way too much overburden to put the mess back in shape before the election.

  39. observa
    October 25th, 2007 at 13:03 | #39

    Not saying he can save his bacon now BilB but at least get the metoo party on the right track as far as cap and trade goes and minimise the electoral damage at the same time. If Mr Metoo can safely pinch the Coalition’s tax policy, with some slightly different emphasis, I’m quite sure Howard can return the favour on GW, with some real differences. The punters don’t mind flexibility, if it’s in their interests.

  40. observa
    October 25th, 2007 at 13:10 | #40

    Personally BilB, I don’t care if Mr Metoo runs with my plan. What do you think of it, or have you got any better suggestions on cap and trade?

  41. observa
    October 25th, 2007 at 13:11 | #41


  42. observa
    October 25th, 2007 at 14:38 | #42

    Here’s a discussion of the problem of compensation that cap and trade has over carbon taxing http://gregmankiw.blogspot.com/2007/10/mccain-on-climate-change.html
    You can try and overcome that by auctioning the permits but that runs into the need for perfect knowledge by the participants, a Herculean task. That’s why cap and traders virtually give the permits away and want to hide behind subsequent business price hikes. Sneaky and gutless in my view. My plan overcomes those problems and what’s more, if policing the caps becomes a nightmare (which critics of cap and trade suspect) then it’s simple to unwind to facilitate true carbon taxing. The certainty of cap and trade reductions, with compensation and insurance against administrative failure. What more could a reluctant Johnny ask for eh?

  43. BilB
    October 25th, 2007 at 15:12 | #43


    I cannot say that your evaluation will not work. My preference is for a carbon tax structure for a number of reasons. The trade option plays into the hands of monied interests and applies an unnecessary level of profit taking. In the medium term most fuels and energy sources will switch to renewables. Beyond that, use of fossil fuels can be handled by concession, because to use fossil fuels may be necessary in some extreme circumstances. A tax structure gives the flexibility of matching the rate of change from fossil to renewable with availability while providing the optimum funding rate for generation of the renewable alternatives. Cap and trade is a clumsey economists attempt at satisfying perceived (not necessarily real) commercial interests.

    If global warming is to be addressed then a structured strategic approach has to engaged. Setting up commercial contract stuctures that have to be unravelled at a later (sooner) date would be highly counterproductive. A tax can be changed and converted if experience suggests that this is appropriate. Starting with a commercial stucture could well jeopardise the whole outcome.

  44. observa
    October 25th, 2007 at 22:21 | #44

    BilB, Let me state categorically I’m in favour of the carbon taxing approach too. However that is not a realistic option, if those polls stand up on the 24th Nov. That said, how should a cap and trade system be designed to be flexible, not sell us down the river like MD water licences, allow income tax compensation for those most affected by rising carbon prices and facilitate a carbon taxing regime fairly easily if required in future. I submit this is the best, second best solution I can think of, but welcome any better solutions or input.

  45. BilB
    October 26th, 2007 at 07:43 | #45


    Please explain.
    “However that is not a realistic option, if those polls stand up on the 24th Nov”.

    I don’t see any connection between the election and the means of carbon control. The public are saying do something and do it fast. The real emphasis should be on all measures that provide a…….replacement……..for carbon consumption. This is first and foremost. The economy has shown great resilience at coping with increases in carbon prices. Oil is over 4 times the price it was ten years ago and that has had minimal impact on the way things work. You could quadruple the price of coal and the economy would bump along over that one as well.

    Talking about capping, trading, or even taxing is pointless if there is no clear vision on what form the alternatives will take. The only good thing that I will say about Howard is that he did put the horse before the cart. Albeit with his stupid selection of solutions, relabled coal and toxic nuclear.

    Get the future framed. Then, and only then, can the method of getting to it be properly formulated.

  46. observa
    October 26th, 2007 at 13:54 | #46

    “Please explain….”
    Basically it’s quite clear now, that after a Rudd win we’re going to get some form of cap and trade, irrespespective of what you or I think about it. Even Howard has converted to this way of thinking.

    “Talking about capping, trading, or even taxing is pointless if there is no clear vision on what form the alternatives will take”

    The idea of capping and trading or taxing is to leave it to the market to determine what the alternatives will be, as distinct to you or I scratching our heads as to what they should or shouldn’t be. You mightn’t have faith in that but most do. My plan certainly sets the hares running on that in a measured and inexorable way. No company or business could ignore the inexorable implications of it and they wouldn’t. Trust me I’ve been in business and I know. All we ever want is surety and a level playing field and we’ll do the rest. Remember Columbus had reliable navigation aids and a sound theory, not a fully mapped globe to guide him, while others around him worried about the end of the earth.

  47. BilB
    October 26th, 2007 at 14:32 | #47

    Point taken on Rudd. I am voting Greens>Labour principally to defeat the Nuclear Fantasy and get Kyoto signed. I am under no illusions that the real battle then begins. This is the battle of achieving a real, that was…..REAL….. understanding of what has to be achieved in the near, that was……NEAR…….future, to secure our environmental safety. This is the territory of swarming crowds of campaigners. The difference between Howard and Rudd, though, is the probability of having an effect. Howard is an ideologue who, by his own admission, is unable to adapt to a changing world. Rudd is more of an intellectual, a leader of a diverse team of thinking people, all of whom have a voice.

    On the market leading? My point was that the market is not capable of abandoning directions in a timely manner. Markets cling to a direction until extreme force is applied. That force is usually expressed as calamatous failure. It is only in the soup of indecision and uncertainty that a market can be fluid enough to explore a range of new directions. The market will cling to oil right up to US$210 per barrel before it wavers and drops the product substantially. A smart country would be expanding its production capability for alternatives as rapidly as possible in profiting from the early dropouts as the price climbs.

    My point is made by the fact that in the face of oil today selling at US$90 per barrel Australia has no substantial policy for renewable alternative energy sources, plastics, road building materials, etc. The Howard governemnt approach has been to engage in a disasterous war to capture oil resource access. And that is the truly scary thing. “All we ever want is surety and a level playing field” this is the “don’t rock the boat” approach that helps markets cling to a direction far longer than is prudent in a situation of imminent danger. It is also the phenomenon that keeps victims pacified right up to the point that the bullet goes through their brain.

  48. BilB
    October 26th, 2007 at 14:36 | #48

    Dead Cats.

  49. 2 tanners
    October 30th, 2007 at 08:06 | #49

    BilB 39

    I’m sorry, I can’t find the original source which was an ABARE report. It is cited in submissions by the Australian Feed Lot Association to anyone who will listen, but the basic reason for that is that they are scared that ethanol subsidisation will drive up grain prices. As it’s a secondary source used in a vested interest document, I would, in your position, find that unconvincing.

    There is also work published by Elsevier, talking about the problems, but I understand that many of the forum find their editorial rigour on AGW problematic.

    If I do run across the document, I’ll let you know. The essence of it was that compared to oil as a means of fuelling cars, the release of greenhouse gases was higher in the manufacture of ethanol. The second problem was that the water solubility of ethanol made it much more likely to leach into and pollute groundwater from spills. Finally, e10 mixes gave off higher levels of exhaust volatiles, although I am not sure this applies to e85+ mixtures.

  50. October 30th, 2007 at 10:32 | #50

    The latest polls show the 2PP margin has narrowed to 54/46.

    As I keep writing this election should be a foregone conclusion, however the insidious effect of corporate newsmedia should not be underestimated.

    Murdoch’s Auatralian and the Courier Mail are masterfully coming up with every possible spin in order to make the prospect of Howard’s re-election less unpalatable. The article of last Friday “Howard to face nation of workers” is yet another example.

    This story restated yet again one of the supposed major selling points of the Howard Government, that is that Australia has historically low unemployment (without regard to the fact that an ‘employed’ person need only work 1 hour per week). Implictly this has all been caused by Howard alone and we are therefore all beholden to return Howard to office.

    No thinking, compassionate person should remain complacent about the threat that this blatent manipulation by our newsmedia poses to what real substance is left in our democracy.

  51. October 30th, 2007 at 13:07 | #51

    I have just added a page to my web site candobetter.org/PropagandaWatch in order to keep track of dishonest pro-government propaganda such as the article referred to above. The actual current content is to be found in http://candobetter.org/node/233 whichis linked to by the above page.

  52. BilB
    October 30th, 2007 at 16:45 | #52

    2 T 50

    Definitely grain for ethanol is unsupportable even in the short term. I fully expect that the companies in the southern states who set up specifically take advantage of the grain harvests will in due course pull up stakes and move north to cane country. There is a current BBC article where a UN official has strongly condemned ethanol production, but this to me has all of the flavour of comment for cash judging by the tone and the arguments.

    The argument about CO2 released in the manufacture of ethanol originated from DOE figures based on corn ethanol which yields one sixteenth of the fuel for the same farming effort compared to cane ethanol. The argument is fully discredited. Ethanol is a naturally occuring substance and nature is fully prepared for its presence (most rotting fruit produces ethanol). Ethanol also readily evaporates leaving no residue other than its companion petrol. There is much strw grasping in web articles written on the use of ethanol.

    Again I am unclear on the pollutant products of combustion. Robert Merkel has done more research on this matter if I recall correctly.

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