The Oz makes the case for higher taxes

April 14th, 2016 13 comments

A couple of days ago, I was one of fifty signatories to a letter opposing the proposed cut in company tax rate and rejecting the general idea that Australia needs lower taxes. We got excellent coverage from the ABC, Fairfax papers and so on. But by far the most extensive was from The Australian. I counted at least four stories all with a prominent run on the website

* A straight new story, though of course replete with phrases like “the left wing establishment”
* The IPA attacking the signatories as the “fatuous fifty”
* Shorten also attacking the company tax cut as a recipe for “mayhem”
* A front page piece saying a tax increase is a lazy way of solving our problems

Not so long ago, the Oz would have ignored a statement like this (or stuck it in a short story on the inside pages) with the plausible justification that it’s just a bunch of lefties saying what lefties usually say. The fact that they felt the need to reply over and over is revealing, in two ways.

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The awkward squad

April 13th, 2016 65 comments

Looking back, the G20 meeting in Brisbane marked a historic turning point in global climate policy. Before G20, the big problem had been the unwillingness of any of the big emitters (US, China and India) to make the first move. The joint statement by Obama and Xi Jinping broke the logjam, with the result that India moved away from its longstanding position that poor countries should have the opportunity to repeat the mistakes of the past before dealing with the problems of the future. This shift was reflected in the successful outcome in Paris, and with the arrival of Peak Coal in both the US and China. India is still expanding its use of coal, but renewables are growing much faster, and imports are already declining.

With all the big players on board, the immediate problem in climate change policy is what might be called the awkward squad – a group of second- and third-rank countries that are, for one reason or another, trying to push ahead with fossil fuels. These include Poland, Saudi Arabia, Turkey, Vietnam and, of course, Australia. Until the recent election, the Harper government in Canada was part of the awkward squad and a comfortable ally for Abbott and the LNP denialists. But Harper’s defeat appears to have provoked a broader rethinking with even the Conservatives moving to a pro-planet position.

As the awkward squad shrinks (Vietnam is already showing signs of rethinking) the remaining members are going to find their position in the international community less and less comfortable. That is, of course, unless the Republicans win the US Presidential election. In that case, the whole world will have a lot to worry about.

Categories: Environment Tags:

A class war election

April 12th, 2016 44 comments

Until quite recently, any discussion of income inequality in Australia was met by howls of “class war” from the political right. Particularly under Abbott, the right wanted to fight on culture war issues, while treating economic policy as a matter of competent management, in which the conservative parties were assumed, by default, to be superior.

Suddenly, however, it appears we are going to have a class war election, largely because of the choices made by the Turnbull government.
Read more…

Categories: Oz Politics Tags:

A deliberative Parliament

April 11th, 2016 17 comments

With the ebbing of Turnbull triumphalism, it’s become evident that the forthcoming election may produce, as in 2010, a House of Represenatives in which neither Labor nor the LNP has an absolute majority. Such an outcome has been common at the state level for some time, and is the norm in upper house elections based on some form of proportional representation. It has proved entirely consistent with stable governments, productive legislation and full-term Parliaments.

Yet commentators persist in calling this a “hung Parliament”, at least when it appears in the lower house. By analogy with a “hung jury” we might suppose a “hung Parliament” is one that proves incapable of reaching a verdict on who should form a government or what legislation should be passed. We have plenty of experience to show that this is not the case.

If we take the jury analogy seriously, it’s worth extending it to the case where the Parliament contains a majority committed to obeying whatever order it receives from the Prime Minister of the day (or, perhaps, the Cabinet). We have plenty of terms for juries and courts that work in this way, none of them complimentary: ‘packed jury’, ‘kangaroo court’, ‘frame up’ and so on.

Those are unduly harsh metaphors when applied to majority governments. But the experience of Queensland, the only Australian jurisdiction without an (invariably ‘hung’) upper house, suggests to me that the cause of good government is greatly enhanced when Premiers cannot rely on a pliant majority to push through whatever laws they like. Admittedly, we’ve had some really good independents, most notably Peter Wellington. But even independents I would never want in government have proved useful as a check on the overweening power of the executives.

So, in the cause of linguistic improvement, I offer the term ‘deliberative Parliament’ for a legislature that actually considers legislation rather than casting votes as ordered by the leader of the day.

Categories: Oz Politics Tags:

Gaps and holes (crosspost from Crooked Timber)

April 8th, 2016 31 comments

Press coverage massive leak of papers from hitherto unheard of (by me, at any rate) Panama law firm Mossack Fonseca has, unsurprisingly, focused on the world leaders, celebrities and fixers whose financial affairs have been revealed in an unflattering light. As regards the financial system as a whole, the New York Times draws a fairly typical conclusion

Above all, the Panama Papers reveal an industry that flourishes in the gaps and holes of international finance.

Really? This description suggests that those involved are obscure minor players in the system, of the sort who might be expected to deal with dodgy law firms in tax havens. The real business of global finance is undertaking by upstanding financial institutions with transparent practices.

But writing this down is enough to see that it is silly. As usual in such cases, we find familiar names: HSBC, UBS, Credit Suisse,and RBS and so on. And of course this is just one firm in one tax haven. The absence of major American banks reflects, in large measure, the fact that they prefer tax havens other than Panama, where there is a high degree of US state countrol.

Again as usual, the line is that this is all in the past, and that the banks have cleaned up their act. But the criminal charges keep on coming. This is scarcely surprising when no major bank has been shut down, even for the most egregious wrongdoing, and where only a handful of bank employees have faced jail time over frauds that total well into the hundreds of billions.

As I’ve argued in the past, activities like tax avoidance/evasion and regulatory arbitrage aren’t peripheral flaws in a financial system primarily concerned with the efficient global allocation of capital. They are the core business, without which the profits of the global financial sector would be a tiny fraction of the $1 trillion or so now reaped annually. The burden of supporting this financial sector is a major factor in the secular stagnation now evident in most developed economies.[^1]

The financial globalization that began in the 1970s has not produced an efficient global financial market with a few gaps and holes. The gaps and holes are the market.

[^1]:Since it’s bound to be raised, the costs of financial globalisation to the developed world can’t be offset by considering rapid growth in China and India. These countries have, until recently, maintained tightly regulated financial systems, and have had plenty of criticism for it. Of course, that has resulted in plenty of corruption and misallocation of capital, but the sector simply hasn’t been enough to produce a large drag on growth. That’s clearly changed, in China at least, so it will be interesting to watch the consequences.

Categories: Economics - General Tags:

Proof by exhaustion that we need a higher top rate of income tax

April 4th, 2016 79 comments

Watching the flailing of the Abbott-Hockey-Turnbull-Morrison government on budget policy has been grimly amusing, for those who enjoy politics as theatre. But it has also provided a nice lesson in the policy process, related to an apocryphal[1] story about (IIRC) Thomas Edison. After a thousand or so failed attempts to design a workable filament and design for a lightbulb, Edison was supposedly reproached with discovering nothing, and answered “On the contrary, I’ve discovered 1000 ways that don’t work”.

The AHTM government came to power with the twin slogans “axe the tax” and “fix the debt”, along with a commitment not to cut any public spending that people cared about, and to spend even more on the military than before. That created an obvious problem: how can we bring the budget back into something like balance, given that we have taken on substantial expenditure commitments, and that we can’t rely on bracket creep. To give them credit, they’ve tried just about every answer but one

* First, they tried the standard LNP approach of setting up a Commission of Audit, discovering a budget emergency and breaking promises on spending. That produced the disastrous 2014 Budget, which ended the careers of Abbott and Hockey in due course. Thanks to the backloading of the big cuts, it’s now destroying Turnbull and Morrison. Turnbull has backed off a little way on health, and is still stalling on education. But his disastrous floating of the idea of completely endingFederal funding for state schools means he’ll be in a politically untenable position when he tries to sell smaller cuts, while claiming not to want to kill the sector.

* Second, having killed the carbon and mining taxes, thereby making the deficit even worse, Abbott realised that it would be impossible to claw back the compensating tax cuts given to low income earners.

* Next Abbott called for a tax debate, but ruled out just about everything in advance. Turnbull and Morrison went one better, putting everything on the table, and then killing off each possible option as it ran into trouble. That included the GST, superannuation concessions, the tangle of negative gearing and concessional capital gains taxes, changes to dividend imputation and so on.

* Finally, long after the “all options” discussion was over, Turnbull popped up with the idea of giving income tax back to the states, which lasted all of two days. He is now trying the ludicrous spin that, having rejected his half-baked idea, the states are on their own financially.

So, the government has succeeded in finding lots of approaches that don’t work. The only one left is higher income tax for those who can afford to pay it. The first step would be to maintain the Temporary Budget Repair Levy until the budget is actually repaired. But the real answer is to recognise that the big gainers from the changes in the economy over the past decade or more have been high income earners, and this is the group who need to pay more.

I’m planning to do some proper calculations on this, when I get a little free time.

fn1. Retailing apocryphal stories is anachronistic, now that they can be falsified (or occasionally verified) with a quick Google search. But it’s habitual for old academics, and I regard it as a kind of performance art, like doing a high wire act without a net. In any case, Google is getting less and less useful for anything except selling stuff, so we may have to rely on old skills like memory again.

Monday Message Board

April 4th, 2016 28 comments

Another Monday Message Board. Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please.

Categories: Regular Features Tags:

Adani mirage fading

April 4th, 2016 28 comments

Adani Mining has just received the final approval from the Queensland government for the Carmichael mine in the Galilee Basin. According to this report from February, citing a “top Adani Group executive”, operations should start in August 2016, which would be a disaster for the global environment.

But wait! Now it seems yet more “secondary approvals” are needed (it appears this refers to a bond for cleaning up the mess afterwards), and “we hope that construction would start any time in 2017”.

There’s more interesting stuff in the report.

He said the price of coal was not the main issue in determining the viability of the project, but rather the cost at which the coal could be mined as the company already had a price agreement with the Indian government.Adani Mining CEO Jeyakumar Janakaraj claims there’s no need to worry about the price of the coal they produce “We are an integrated player. We have sold electricity in India on a long-term price.

‘‘It is not about the price point of coal, it is about the cost point, at what cost can we produce coal so that we will always be able to make a profit with the electricity price that we have already sold,”

The reference to the Indian government is pretty cheeky, given the government policy of eliminating coal imports over the next few years, which looks to be on track to succeed. (it’s currently a little behind its targets for increased production, but that’s because of weak demand).

More importantly, Janakaraj’s claim that “We are an integrated player” suggests he does not know much about his own business. Adani was an integrated enterprise when the project began. But the restructuring of the Adani Group in 2015 separated Adani Power (the electricity producer with a diversified portfolio of coal-fired power and renewables) from Adani Mining, which holds the stranded assets like Carmichael. This analysis from IEEFA spells it all out. Adani Power would be breaching its fiduciary obligations to shareholders if it paid an above market price for coal from Adani Mining.

I found a response from Adani, which illustrates one of my favorite points. When you have no answer to a damning report, say that it is “flawed“. That’s true of just about anything, and saves you the trouble of an actual response.

Categories: Economics - General, Environment Tags:

Good and bad news on climate

April 1st, 2016 32 comments

Although China has been moving away from coal-fired power for some time, provincial governments didn’t get the memo. They’ve been approving new plants at a cracking pace, with as many as 250 on the books, through a combination of inertia and desire to keep construction going. Now the national government has started pulling them into line, banning new coal plants in 15 provinces.

As this report shows there’s a similar tendency in many developing countries, with a long-standing push for coal running into the reality that it’s economically and environmentally disastrous. The result is a potential trillion dollars in stranded assets.

Still, progress in reducing carbon emissions has been much greater than seemed possible even five years ago. The problem is that the news from the scientists keeps getting worse. I haven’t had time to digest the discussion around the Hansen et al paper on sea level rise, but it’s certainly alarming. Closer to home and undoubted is the disastrous coral bleaching in the Great Barrier Reef.

And of course, while the world is moving to cut emissions, Australia is going backwards under the Abbott government (now notionally led by Malcolm Turnbull). The defeat of this government would be an important step towards saving the planet.

Categories: Environment Tags:

Weekend reflections

April 1st, 2016 12 comments

I’ve been on a very pleasant family holiday, so I haven’t posted for quite a while. I’ll take a little while to get back up to speed. In the meantime, I’m reviving an old regular. It’s time for another weekend reflections, which makes space for longer than usual comments on any topic. Side discussions to sandpits, please. Absolutely no personal criticism of other commenters.

Categories: Regular Features Tags:

Abbott is right

March 22nd, 2016 45 comments

The LNP, with Turnbull as frontman, will be campaigning on the Abbott government’s record and policies. Apart from a few symbolic and rhetorical shifts (the re-abolition of Knights and Dames, for example), Turnbull has neither deviated from, nor added to, Abbott’s policy program.

There’s a notion being pushed in the media that a big win for the LNP would constitute a mandate to “let Malcolm be Malcolm”. This is nonsense. A mandate isn’t a free pass. It is, literally, a command, to implement the policies on which you have campaigned [1]

Turnbull can’t campaign on Abbott’s policies, then say he has been commanded to implement his own (whatever they might be). So, unless he breaks with Abbott before the election, he might as hand back the job to someone who really believes in the program he is proposing.

Update 25/3 Turnbull has obviously been stung by Abbott’s attack, and is spinning some minor course adjustments (explicitly dumping some policies from which Abbott had already resiled) as a major break

fn1. The mandate idea is most powerful in a bicameral system with an unelected or highly unrepresentative upper house. In Australia, the unrepresentative aspects of the Senate (equal state representation and long terms) are matched by the spurious lower house majority produced by single-member constituencies. So, senators have just as much a mandate to block legislation they have campaigned against as the government has to push it forward. The Double Dissolution is, of course, the way we can resolve this.

Categories: Oz Politics Tags:

Sandpit

March 21st, 2016 11 comments

A new sandpit for long side discussions, idees fixes and so on. Discussions about climate policy and related issues can be posted here, along with the usual things.

Categories: Regular Features Tags:

Monday Message Board

March 21st, 2016 23 comments

Another Monday Message Board. Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please.

Categories: Regular Features Tags:

Double dissolution

March 21st, 2016 30 comments

Apparently, we are likely to have one, unless the Senate passes the legislation to reinstate the Australian Building and Construction Commission. I predicted a month ago that the Turnbull government will lose office, and I’m more confident now (though far from 100 per cent) than I was when I made the prediction. So, I’ll leave it at that, and open the topic up for discussion.

Categories: Oz Politics Tags:

Keeping Sea Lanes Open: A Benefit Cost Analysis

March 20th, 2016 21 comments

Whenever I raise the observation that navies are essentially obsolete, someone is bound to raise the cry “What about the sea lanes”. The claim that navies play a vital role in protecting trade routes is taken so much for granted that it might seem untestable. But it turns out that most of the information needed for a benefit cost analysis is available. Unsurprisingly (to me at least), the claimed benefit of keeping sea lanes open doesn’t stand up to scrutiny. I’ve spelt this out in my latest article in Inside Story, reprinted over the fold.

Read more…

Categories: Economics - General, Oz Politics Tags:

A better system of voting for the Senate

March 19th, 2016 30 comments

After a fractious debate, the LNP and Greens have combined to push through changes to the system of voting in the Senate. The primary change is to introduce something like optional preferential voting above the line, replacing the system where party apparatchiks got to allocate preferences. While not perfect, this is an improvement on the old system.

It points the way to a much simpler system. I suggest scrapping the below/above distinction, and moving to a standard optional preferential system, except that we would vote for named party lists. Independents could pick a party name describing their objectives, or just run under their own names.

The main objection to this system is that it rules out the option of voting for (say) Labor candidates in an order different to that of the party ticket, which is currently possible below the line. But, as far as I know, in nearly 100 years with the current system, no candidate has ever been elected ahead of someone higher up their own party list.

Against that, it would be simple, familiar and easy to count, with a greatly reduced risk of accidental informal votes.

Categories: Oz Politics Tags:

Political Bourbonism

March 16th, 2016 23 comments

Laura Tingle had an interesting piece on political memory. in Quarterly Essay recently, and my response (over the fold) was published in the latest issue (paywalled)>. Tingle is the most insightful observer of Australian politics writing in the mass media, but she has always taken the inevitability and desirability of market liberal reform for a granted. I detect a bit of a shift in the latest piece, but that may be wishful thinking on my part.

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Categories: Oz Politics Tags:

Sandpit

March 12th, 2016 84 comments

A new sandpit for long side discussions, idees fixes and so on. Discussions about climate policy and related issues can be posted here, along with the usual things.

Categories: Regular Features Tags:

Repeal Taft-Hartley (crosspost from Crooked Timber)

March 11th, 2016 29 comments

Assuming that the US Presidential election is between Trump and Clinton (or, for that matter, Sanders) the voting bloc that’s most obviously up for grabs is that of working-class whites[^1]. Relative to expectations, working class whites have done worse under neoliberalism/market liberalism than almost any other group in the population. So, they ought to be more solid than ever against the right. But it’s easy for tribalists like Trump to blame migrants and minorities for the losses that working class whites have suffered.

What’s needed to turn this around, I think, is something, in Trump’s words “yuge”. My suggestion is repeal of the Taft-Hartley Act. Way back in 1948, Taft-Hartley prefigured anti-union laws that were passed throughout the English-speaking world[^2] from the 1970s and have spread even further since then. Its repeal would, at a minimum, be a huge symbolic step.
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Categories: World Events Tags:

Parallel universes

March 7th, 2016 186 comments

Of the 20 years or so that I’ve been observing climate change policy, global developments over the past year have been the most hopeful I can remember, particularly as regards electricity generation

* The Paris Conference was a big success, at least relative to expectations
* Coal-fired power stations are shutting down around the world
* China has reduced its coal use for two years in a row
* India has increased its coal tax, and greatly expanded use of renewables

Whether emissions reductions will be big enough and fast enough remains to be seen, but at least we are going in the right direction.

As far as climate science is concerned, the string of temperature records broken recently has killed any idea that we are in a ‘pause’ or ‘hiatus’. Even the favorite source of deniers, the satellite data from UAH, is now showing a new record. The only remaining issue is the second-order debate over whether there was a pause or perhaps slowdown at some point in the first decade of the 2000s.

At the same time, following the US election, I’ve been paying more attention than usual to rightwing blogs, most of which run climate denialist pieces fairly regularly. Given that nearly all the major US coal companies are now bankrupt, and that coal-fired electricity is declining rapidly, I’d have expected a lot of “wrecking ball” pieces on the supposed damage to the economy (in reality, the effects are small and mostly offset by the expansion of renewables) now that mitigation policies of various kinds are taking effect.

But I don’t see anything like that. Rather, most of the articles I’m reading are claims of victory in the debate over both science and policy. Here’s a fairly typical example, with the title “Is the Climate Crusade Stalling?

We really do live in parallel universes.

Categories: Environment Tags:

The three party system (crosspost from Crooked Timber)

March 3rd, 2016 40 comments

Warning: Amateur political analysis ahead. I posted this on Crooked Timber a few days ago. It isn’t as applicable to Australia. In part, I think, this is because Rudd (along with Henry and Swan) saved us from the GFC with Keynesian policies, but then failed to defend them, leaving the advocates of market liberal reform largely unchallenged.

Looking at the way politics has evolved over the past 25 years or so, in the English-speaking world and beyond, I have developed an analysis which is certainly not original, but which I haven’t seen set down in exactly the way I would like. Here’s the shorter version:

There are three major political forces in contemporary politics in developed countries: tribalism, neoliberalism and leftism (defined in more detail below). Until recently, the party system involved competition between different versions of neoliberalism. Since the Global Financial Crisis, neoliberals have remained in power almost everywhere, but can no longer command the electoral support needed to marginalise both tribalists and leftists at the same time. So, we are seeing the emergence of a three-party system, which is inherently unstable because of the Condorcet problem and for other reasons.

Read more…

Categories: Politics (general) Tags:

Monday Message Board

February 29th, 2016 33 comments

Another Monday Message Board. Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please.

Categories: Regular Features Tags:

Sandpit

February 29th, 2016 10 comments

A new sandpit for long side discussions, idees fixes and so on. Discussions about climate policy and related issues can be posted here, along with the usual things.

Categories: Regular Features Tags:

Refighting World War II

February 26th, 2016 64 comments

In keeping with his commitment to do exactly what Tony Abbott would have done, but with more style, Malcolm Turnbull has just announced that we are to spend a trillion dollars on fighter plans and submarines. Apparently, there are lots of problems with the hugely expensive F-35 Joint Strike Fighter, which Australia has on order. Rather than look at the details, it’s worth asking we are, yet again, arming ourselves to refight World War II.

World War II was fought on land, sea and air. Submarines and fighter planes played a crucial role. But since 1945, things have changed. The 70 years since 1945 have been marked by near-continuous land warfare in various parts of the world [1]. On the other hand, there has been essentially no naval warfare, in the sense of battles between ships or carrier based aircraft, with the exception of the absurd and unnecessary Falklands conflict. Air combat between fighter planes lasted a bit longer after 1945, playing a big role in the Korean War, but has been pretty much non-existent since the 1980s. All warplanes, these days, are effectively bombers, usually hitting targets that have previously been rendered defenceless by missile attack. Yet the problems of the F-35 stem, in large measure, from its capacity to engage in hypothetical dogfights.

Fighter planes and their pilots still attract most of the attention, and nearly all the glory, in air warfare. But the real work is increasingly done by drone operators, commuting from the suburbs to undertake their task of destruction in air conditioned offices: since they see exactly what they have done, the job is apparently much more stressful than that of a fighter pilot. So far, only the US is using military drones on a large scale, but it’s obvious that this is the way of future wars. The specific problems of the F-35 are irrelevant in this context: it will in any case be obsolete by the time it’s delivered.

As for submarines, Wikipedia gives a list of submarine actions since 1945. There have been six of them, three involving the sinking of surface ships, and three involving the firing of cruise missiles, something that can be done from craft as small as corvettes.

Submarines have been much more notable for sinking themselves. Wikipedia lists four US submarines sunk at sea since 1945, two with all hands. The Russians have done far worse, losing 18 subs, most notably the Kursk, lost with all hands in 2000.

Submarines aren’t obsolete in all their possible uses. If the world ends in a nuclear holocaust, the final missiles will probably be fired from nuclear-armed submarines. But the revival of old-style submarine warfare, using our subs to sink (say) Chinese naval vessels seems remote: the increasing power and range land based anti-ship missiles will soon make naval power obsolete. Even more remote (thankfully) is the use of submarines to attack merchant ships without warning, as was done in both World Wars.

Of course, no one can be certain that seemingly obsolete modes of warfare won’t be revived: For example, there was a cavalry charge during the Afghan war. But spending a trillion dollars on weapons systems that haven’t been used anywhere in the world for decades does not seem like a sensible use of public money.

Having posted this, I’m fully prepared to get a hammering from military buffs who will point out that I have got this or that detail of air and naval warfare wrong. But the idea that detailed knowledge of tech specs or the minor points of military history constitutes expertise is, in this context, quite wrong. In the absence of any significant air or naval warfare within living memory, supposed expertise is about as useful as Scott Morrison’s knowledge of unicorns. The only important thing to know is that, like nearly all military expenditure and nearly all wars, these proposed purchases haven’t been subject to a cost-benefit test and would fail it if they were.

fn1. There’s a case that land warfare has become less frequent, or at least less bloody over time. But it’s hard to tell.

Peak paper (updated)

February 22nd, 2016 55 comments

I’ve recently published a piece in Aeon, looking at the peak in global paper use, which occurred a couple of years ago, and arguing that this is an indication of a less resource-intensive future. Over the fold, a longer draft, with some links.
Read more…

Categories: Environment Tags:

Turnbull opposes affordable housing

February 21st, 2016 46 comments

Responding to Labor’s proposals on negative gearing and capital gains tax, Malcolm Turnbull has warned that property values will fall as a result. He is surely correct. To put the same point in different words, Turnbull agrees that Labor policy will make housing more affordable and thinks that this is a bad thing.

There are some obvious electoral advantages in Turnbull’s scare campaign. As I observed when this topic came up during Abbott’s Prime Ministership, most voters own houses and therefore benefit from making housing less affordable. For this reason, Australian public policy has long been to make housing as unaffordable as possible.

The difficulty for Turnbull arises from precisely this point. He has more or less promised to do something about the tax treatment of property. But, from our current starting point, almost any change must make existing owners worse off. So, when and if he does anything, he will be hoist on his own petard.

Labor’s response to Turnbull has been interesting and, I suspect, effective. The line has been to accuse him of a dishonest scare campaign, without explicitly denying that property values will decline with the removal of unjustified tax concessions.

While this is an example of a non-denial denial, it is I think, defensible. Turnbull is mounting a scare campaign, and doing so dishonestly, attacking policies he might otherwise embrace. This is a much fairer use of the term than when it was used to apply to Labor’s reiteration of its longstanding opposition to expansion of the GST at a time when the government was clearly floating the idea. Pointing out that it was never formal government policy is a silly evasion – it wasn’t as though Labor was inventing the idea.

Categories: Oz Politics Tags:

Another fearless prediction

February 20th, 2016 60 comments

As longterm readers know, my record on political and other predictions is mixed, not as bad as some have made out, but by no means uniformly accurate. Still, I’m going to venture my most fearless prediction in some time.

Bill Shorten will be Prime Minister after the next election.

Like most Australian voters, I have no great enthusiasm for Shorten. But, I’ve come to the view that Turnbull is, as the Fin remarked recently, “all hat and no cattle”, and the same can be said of most of his ministry. In particular, Scott Morrison is the most striking instance of the Peter Principle I’ve seen in some time. Brutally effective as Immigration Minister, he handled the Social Services portfolio quite deftly, but has floundered as Treasurer.

Turning from personality to policy, Labor certainly deserves a win. They have stuck to their guns on issues like carbon pricing, and advanced serious and credible policies on tax and public expenditure, something that hasn’t been attempted since John Hewson’s Fightback! disaster in 1993.

By contrast, the Turnbull government is an enigma. Will it go to the election with the policies Turnbull inherited from Abbott? Or will be asked to “let Malcolm be Malcolm”? Or will we see a continuation of the studied ambiguity of the last five months? No one seems to know.

For the moment, Turnbull’s popularity looks like the trump card. The experience of his last stint as leader suggests that this is a fairly weak reed.

The best hope for the government is that the post-Turnbull surge was not so much driven by support for Turnbull as by an underlying LNP majority, submerged by Abbott’s absurdities.

Categories: Oz Politics Tags:

Something doesn’t add up here

February 20th, 2016 28 comments

The papers are abuzz with speculation about an early election. This is one of the favorite games of the political punditariat, and it usually comes to nothing, but the story this time seems to make even less sense than usual. Part of the problem is that there are three different ways an early election could be held, and the proponents seem to be assuming a “unicorn” or “Pixie horse” (to use Scott Morrison’s evocative terminology) that combines the best of all three from the government’s position.

First, we could have an immediate dissolution of the House of Representatives. This would have a chance of achieving the biggest selling point of the early election idea, cashing in on Malcolm Turnbull’s popularity while it lasts. But such obviously cynical moves have failed in the past, as Campbell Newman could tell you. Also, it would (as I understand it) necessitate a separate half-Senate election in the second half of the year. The political class, with the exception of minority and micro-parties, really hates this idea.

Second, we could have a double dissolution, based on the Senate’s failure to pass anti-union laws, and held under the existing rules. Apparently, the election would have to be called the day after Budget Day (11 May), and couldn’t be held until July. So, it would only be a few months early, invalidating the whole idea. And, of course, it would guarantee a Senate with lots of micro and minor party members.

The third idea, is the second, plus a deal with the Greens to reform the Senate voting rules to allow preferential above the line voting. This would kill off the “preference whisperer” deals that have allowed the election of candidates with almost no votes. The reform makes sense, but why on earth would the Greens rush it through to make life easy for the government? All they have to do is hold off until the Budget session and they can get the reform with no possibility of a double dissolution.

Also, the idea that the reform will kill micro parties seems to be oversold. Automatic preference exchange might be gone, but there will still be “how to vote” cards. With a DD quota of about 7.5 per cent, a candidate with a 4 per cent primary vote, or even less, could easily get in on preferences.

However, no one seems to be making any of these points. Have I misunderstood the arcana of our system, or just got the strategy wrong? Over to you.

Update In comments, Lt Fred makes a convincing case that the Greens want and would benefit from a Double Dissolution. They did much better in 2010 than in 2013, so a DD would be good for them.

Categories: Oz Politics Tags:

Peak paper

February 18th, 2016 37 comments

I’ve recently published a piece in Aeon, looking at the peak in global paper use, which occurred a couple of years ago, and arguing that this is an indication of a less resource-intensive future. Over the fold, a longer draft – I’ll add hyperlinks back in if I get a free moment.
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Categories: Economics - General Tags:

No nuclear reactor for South Australia

February 15th, 2016 33 comments

That, for me at any rate, is the crucial element of the Tentative Findings of the South Australian Royal Commission into the Nuclear Fuel Cycle (here. The media releasee summarises

aking account of future demand and anticipated costs of nuclear power under the existing electricity market structure, it would not be commercially viable to generate electricity from a nuclear power plant in South Australia in the foreseeable future.

However, Australia’s electricity system will require low-carbon generation sources to meet future global emissions reduction targets. Nuclear power may be necessary, along with other low carbon generation technologies. It would be wise to plan now to ensure that nuclear power would be available should it be required.

The detailed findings are sensible (that is to say, largely in line with my submission and evidence. A crucial para:

If nuclear power were to be developed in South Australia, a proven design should be used that has been constructed elsewhere, preferably on multiple occasions, and should incorporate the most advanced active and passive safety features. This is likely to include consideration of small modular reactor (SMR) designs, but exclude for the foreseeable future fast reactors

Given that Barry Brook, a leading enthusiast for fast reactors was part of the Commission’s Expert Advisory Panel, this finding should make it clear that fast reactors are an option for the distant (beyond foreseeable) future.

The finding is striking because South Australia is, or ought to be a test case for those arguing that a carbon-free electricity system must rely on “baseload” nuclear. South Australia has high and increasing reliance on renewables, is close to phasing out coal, and has limited interconnection capacity. It’s exactly the modle that anti-renewable sites like Brave New Climate have “proved” time after time can’t possibly work without nuclear power. Yet, it seems, even a sympathetic inquiry finds nuclear power to be an option for the distant future, if that.

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Categories: Environment Tags: