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Academic scribblers

October 28th, 2007

Having been active in Australian policy debate for around fifteen years, its sobering to realise that I can only identify one issue where I’m confident I’ve had a significant impact on the ultimate outcome. That topic was the subject of my first column in the Financial Review, called Fightback without the Food Tax (for those who weren’t around at the time, Fightback! was John Hewson’s manifesto for the 1993 election, centred on a GST). Not only did Hewson eventually incorporate an exemption for food in his GST proposal (too late to turn around the perception that he was a dogmatic ideologue) but the Democrats accepted the view and imposed it on Howard. This was something of a Pyhrric victory as far as I was concerned, though. While I thought, and still think, a GST with an exemption for food made good public policy, the New Tax System package as a whole was not a good deal and should have been rejected.

At a much more marginal level, I think one of my columns might have had an impact on the campaign this weekend. In this piece in mid-September, I argued that the Howard government had plenty to gain, and nothing to lose, from ratifying Kyoto. Now it turns out that, at about the same time, Malcolm Turnbull was making the same case in Cabinet, unsuccessfully of course. The leak of this revelation has given Howard another day or two of bad headlines. Of course, the argument is obvious, and Turnbull is quite sharp enough to work it out for himself. Still, it does make the effort of turning out a column every fortnight seem a little bit more worthwhile.

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  1. observa
    October 28th, 2007 at 09:27 | #1

    “While I thought, and still think, a GST with an exemption for food made good public policy, the New Tax System package as a whole was not a good deal and should have been rejected.”

    Yes, ratifying Kyoto is a bit like standing on a platform to reform the WST, without actually telling the electorate exactly how you’re going to do that and then whacking them with a tax on food when you’re in. The devil’s in the detail and just as John might have been skeptical about the New Tax System overall, he could see the good sense in asking for a food exemption, if the answer was to be a GST. Oh that he could see the same good sense in cap and trade skeptics asking Rudd Labor fans to put their cap and trade proposal on the table, so we can see if they’re really going to pour our children’s and grandchildren’s heritage down the river, like Murray/Darling water rights.

  2. rog
    October 28th, 2007 at 09:40 | #2

    Notwithtanding that Turnbull is in a very marginal seat his suggestion was the most correct; it makes no sense politically to not sign Kyoto when JH has already said that we had achieved the desired emission targets, obviously without too much economic pain.

  3. October 28th, 2007 at 10:03 | #3

    On the contrary Rog, it makes no sense to sign Kyoto.

    The darned thing is about to expire naturally.

  4. Persse
    October 28th, 2007 at 10:15 | #4

    Your efforts are very worthwhile. None of us thinks in a vacuum. Articulating what many are thinking or issues the times throw up, ideas and issues crystallise in the public narrative.
    Turnbull is both smart enough to read the writing on the wall, and have genuine concerns about climate change, and as you say, it is coincidental at the least.
    What has surprised me is the depth and width of concern amongst people I talk with about AGW. Even amongst normally apolitical, and conservative inclined people. And this is in Albury.
    The issue would resonate far more in an electorate like Wentworth.

  5. al loomis
    October 28th, 2007 at 11:36 | #5

    i am reminded of a scene from a movie: bear cub growls, cougar backs away, cub preens. camera backs away revealing about 400 kg of mama grizzly on her haunches and looking nasty.

    what you mean to say is, you can only remember once when your wishes coincided with mama politician’s actions. you are conflating co-incidence with causation. that’s the curse of the chattering classes in an oligarchy, it’s so hard to convince even yourself you are relevant.

  6. observa
    October 28th, 2007 at 14:48 | #6

    By the way, here’s Labor’s current status on an effective emissions trading scheme as outlined by Kevin07 at the Annual Fraser Lecture at the Belconnen club, Canberra 30th May 2007 and proudly displayed on the ALP website-

    “Labor’s Five Tests for an Effective Emissions Trading Scheme

    Labor supports the establishment of an emissions trading scheme and identifies five tests for an effective scheme.

    First, an effective emissions trading scheme must be a cap and trade scheme to be internationally consistent.
    A cap and trade approach is the most widely used scheme design, in which total emissions are ‘capped’, permits allocated up to the cap, and trading allowed to let the market find the cheapest way to meet any necessary emission reductions. The Kyoto Protocol and the European Union emissions trading scheme are both based on this approach.

    But this is not just a European approach. Arnold Schwarzenegger’s scheme in California is cap and trade and so is the trading scheme of nine North East US states which enjoys bipartisan support and was initiated by former Republican Governor Pataki of New York.

    Given that climate change is a global challenge requiring, ultimately, a global solution that includes all major emitters, a cap and trade scheme is the only logical choice for a domestic scheme.

    Second, an effective emissions trading scheme must effectively reduce emissions.
    Such a scheme must stop further growth in Australia’s emissions and set Australia on a path to reduce emissions by 60 per cent by 2050 – the minimum required to avoid dangerous levels of climate change.

    Third, an effective emissions trading scheme must be economically responsible.
    Such a scheme must provide the right incentives to drive investment in low emission technologies and renewable energy while keeping the total cost as low as possible.

    In taking the lead before an effective international agreement is in place, it is also vitally important that a domestic scheme does not undermine Australia’s competitiveness and provides mechanisms to ensure that Australian operations of energy-intensive trade-exposed firms are not disadvantaged.

    A scheme will also need to be complemented by measures like a Mandatory Renewable Energy Target to encourage the domestic development and use of new technologies.

    Fourth, an effective emissions trading scheme must be fair.
    An effective scheme must allow both the costs and the benefits to be shared across the community. This means additional complementary policies to make homes more efficient and comfortable while saving money on energy bills.

    Fifth, an effective emissions trading scheme must recognise the need to act now.
    A scheme needs to commence as soon as possible to minimise the costs of inaction because economic modelling clearly shows that early action is far less costly than delayed action.

    Work should progress on developing a national emissions trading scheme starting no later than 2010 with the detailed design finalised by the end of 2008. Meeting each of these tests will provide for an effective emissions trading scheme.”

    In particular note-
    “A cap and trade approach is the most widely used scheme design, in which total emissions are ‘capped’, permits allocated up to the cap, and trading allowed to let the market find the cheapest way to meet any necessary emission reductions.”
    Can we all now presume that “permits will be allocated up to the cap” means they are given away to big unionised carbon, just as the have been elsewhere in the world Mr Rudd? Just like Murray Darling water rights before them and look where we’re at now. Why on earth our MSM are not asking the hard questions of Rudd and Howard over this sort of outrageous intergenerational scam policy, is anyone’s guess. Perhaps we can ultimately rely on some intelligent free thinkers among the Greens to do likewise what Meg Lees did for the GST, presumably at JQ’s behest? Are you free Willy?

  7. observa
    October 28th, 2007 at 14:53 | #7

    “An effective scheme must allow both the costs and the benefits to be shared across the community”
    All look forward to your beneficial cap allocation coming real soon folks.

  8. observa
    October 28th, 2007 at 15:04 | #8

    Or perhaps a Kyoto fridge magnet and badge to hand down to the kiddies will suffice?

  9. Jim Birch
    October 28th, 2007 at 16:23 | #9

    “that’s the curse of the chattering classes in an oligarchy, it’s so hard to convince even yourself you are relevant.”

    So, does your presence here indicate a claim to membership of the chattering-class-responders class or junior membership of the chattering class?

  10. Jill Rush
    October 28th, 2007 at 17:58 | #10

    Prof Q,
    Whilst it is perhaps hard to nominate particular items that have influenced the wider sphere there is every chance that your ideas that have changed elements of bigger decisions many times but noone will tell you as they have taken the credit themselves.

    In addition the Liberal coalition government “knows” everything that is important which is why it has made so many decisions without reference to anyone who may have a different point of view and especially if they have knowledge. Al Loomis’ post exemplifies this kind of approach which has become distressingly common under Mr Howard but isn’t limited to his mates.

  11. observa
    October 28th, 2007 at 23:44 | #11

    “In this piece in mid-September, I argued that the Howard government had plenty to gain, and nothing to lose, from ratifying Kyoto. Now it turns out that, at about the same time, Malcolm Tunrbull was making the same case in Cabinet, unsuccessfully of course. The leak of this revelation has given Howard another day or two of bad headlines. Of course, the argument is obvious, and Turnbull is quite sharp enough to work it out for himself. Still, it does make the effort of turning out a column every fortnight seem a little bit more worthwhile.”

    Quiggin, Rudd and now Turnbull all singing together whilst some new chums begin to hum along with Howard
    http://www.canada.com/nationalpost/story.html?id=189a61d6-19a7-46e1-92a7-5fe1ea5c5b87

  12. observa
    October 28th, 2007 at 23:54 | #12

    And Bush of course.

  13. October 29th, 2007 at 06:10 | #13

    At a domestic level a carbon tax makes more sense than cap and trade. And so long as a carbon tax is delivered with reductions in other taxes (eg payroll tax and income tax) then it might even be a good thing.

    Exempting food from the GST kind of assumes that the burden of GST is fully passed on to the consumer. If this is true in general then why not argue that farmers should have lower income tax. Or doctors for that matter. I think the argument for exempting food is ultimately pretty weak. Although the slipper slope argument against exemptions also ultimately proved to be pretty weak.

  14. observa
    October 29th, 2007 at 07:49 | #14

    Well Terje, if people like JQ were concerned enough about a 10% tax on Australian’s food, they certainly need to sit up and take notice of the United Nations Special Rapporteur on the Right to Food, Jean Ziegler, who is calling one of the results of Kyoto a ‘crime against humanity’.

    “Now these ideas[abandoning Kyoto] are appearing in an unlikely place: the pages of Nature, perhaps the world’s most prestigious journal of general science news and studies.

    In the new Oct. 25 issue, Gwyn Prins of the London School of Economics and Oxford interdisciplinary social scientist Steve Rayner argue that it is — to quote the headline — “Time to ditch Kyoto.” Despite its symbolic role in international affairs, the Kyoto Protocol has not only done nothing to cut emissions of greenhouse gases, the authors point out, but it hasn’t even influenced future projections of greenhouse output.”[see National Post link above]

    Now we have to wonder whether Kyoto is the solution to GW, just like ATSIC and the Dreamtime was for indigenous Australian’s problems. Are people like Quiggin, Rudd and now Turnbull, really just the ‘new antipodeans’, adopting the ways and mores of Europe, just as they are about to ditch their latest fad? It follows a litany of such yo-yos and hula hoop fads like open plan schools, whole reading, ditching tech schools for comprehensive education, not to mention post modern history lessons. The ‘New Antipodeans’ have thus become a fertile market to dump Europe’s yo-yos, when they’ve moved on to hula hoops in the big school playground.

  15. observa
  16. observa
    October 29th, 2007 at 08:33 | #16

    Or for those who want to really ‘feel’ the urgency in his voice
    http://www.un.org/radio/news/html/14891.html

  17. jquiggin
    October 29th, 2007 at 09:05 | #17

    Observa, that’s a lot of weight to put on a couple of guys who were, I think it’s fair to say, reasonably obscure before this.

    As regards biofuels, I think Ziegler has a pretty good point, though the situation is complicated. Biofuels are only going to be of much benefit if they can be derived from non-food crops like switchgrass, growing in areas unsuitable for grain production.

  18. October 29th, 2007 at 09:20 | #18

    Howard’s rejection of Kyoto has always been symbolic not practical. A tough no nonsense approach, inline with our mate Geroge W. It worked for a while but the tide has turned and now the government has dropped its standard or being hoisted on its own petard. Malcolm Turnbull cannot enjoy being the standard bearer. (Love mixing metaphors. It’s fitting that petard comes the word for “fart”).

  19. derrida derider
    October 29th, 2007 at 10:48 | #19

    But but but …. ratifying Kyoto would imply John Howard made a mistake in not doing it earlier. Unthinkable!

  20. observa
    October 29th, 2007 at 10:56 | #20

    “Observa, that’s a lot of weight to put on a couple of guys who were, I think it’s fair to say, reasonably obscure before this.”
    It may well be John and only time will tell.
    It may also be the case that with peak oil, or at least the increasing scarcity of nature’s stored energy, we need to plan a new constitutional marketplace for the future. My own preference is for resource taxation, but if it is to be cap and trade then I think it’s an imperative that the licence to emit and periodically charge for that right remains in community control. Would you agree on that imperative? It’s with that in mind I proposed the plan I did, but there could be equal or better about on that score. I’m not aware of them though.

  21. October 29th, 2007 at 10:57 | #21

    The voters can flip flop all they like but not the politicians. It seems to just be the way it is.

  22. gordon
    October 29th, 2007 at 13:50 | #22

    The National Post article to which Observa linked includes the remark: ‘…Messrs. Prins and Rayner also dare to introduce the taboo concept of adapting to climate change as an alternative strategy to be pursued alongside the struggle against it. “For the best part of a decade,” they state, “discussion of adaptation was regarded by most participants in climate policymaking as tantamount to betrayal ? The policy community suppressed discussion of adaptation out of fear that it would blunt the arguments for greenhouse gas mitigation”‘.

    The most frightening aspect of adaptation is migration. There are potentially millions of people who would “adapt” by moving elsewhere. No wonder nobody wants to talk about it.

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