Ten Year Plans

The Morrison government has just announced what it calls a climate policy, promising expenditure of $2 billion. I’ll have more to say about this later, but I want first to point out that the promised expenditure is to be allocated over ten years, at an average rate of $200 million a year. That’s only marginally more than the government spent on advertising in 2017-18, which is appropriate, I suppose, for what is basically a PR exercise.

The big problem here is the new practice of announcing expenditure amounts over 10 years. There was a time when promises of this kind were made in terms of annual expenditure. Sometime in the 80s or 90s, the norm shifted to four-year programs, on the basis that this was the period covered by Budget estimates. The fact that it made promises look bigger was a handy side benefit.

If four-year spending figures were problematic, announcing programs for ten years is simply ludicrous. The likelihood that anyone in the current ministry will still be holding office, or even in Parliament in ten years time is very small, as is the probability that any expenditure program will continue unchanged. If we can budget 10 years ahead, why not 100 or 1000?

What makes the joke even worse in this case is that the policy is obviously designed to last, not for ten years, but for three months, until the election in May. If Morrison ekes out an undeserved victory, the denialists on the backbench will almost certainly want to kill off this piece of gesture politics. If he loses, the LNP will certainly dump the policy and may even offer something serious.

In the meantime, it’s a mistake to treat this as a policy – it’s an announcement you make when you don’t have a policy.

11 thoughts on “Ten Year Plans

  1. Hi John,

    Not at all important, and not sure it is possible, but can you email me directly. It will be of trivial interest and a quick (one email) exchange.

    Cheers,
    Matt

  2. The level of Policy development in the recent past has been appalling.

    Almost half a billion to a small company to protect the Barrier Reef

    Similar amount to an equally small company to provide security at Christmas Island Detention centres.

    Not my idea of governing, simply to throw massive amounts or our money at an issue.

  3. Maybe, but 10 years ago Kevin Rudd was at the height of his powers, the GFC was in full roar and Malcolm Turnbull was leader of the opposition. In some ways, it seems like yesterday. And, pointedly, pretty much the same arguments were being had over climate change, except then the policy of choice was an emissions trading scheme. Who is to say more progress will be made over the next ten years than over the last ten, that is, bugger all?

  4. It wasn’t clear but it seems to be a rejigging of the ERF scheme with a new name. So you buy back carbon pollution reductions which, in theory, give greatest bang for your buck. Not a lot of buybacks with this amount of funding.

    The government’s rationale for this buyback is that it avoids an explicit tax (“a big new tax”) on carbon – the subsidy apart from the transfer an effectively equivalent policy imn terms of efficiency if there is not a lot of excess capacity in carbon generation. The ridiculous part of this reasoning is that the scheme needs to be funded by taxes.

    It is obviously a token effort and carries with it the conviction that their denialists are either right or need to be bought off.

    I notice that the sches suggested include funding for Warringah – Tony Abbot’s electorate. It is silly.

    https://www.smh.com.au/politics/federal/critics-decry-coalition-s-fig-leaf-climate-pledge-20190225-p51026.html?ref=rss&utm_medium=rss&utm_source=rss_feed

  5. I really can’t be bothered with even reading Morrison’s great new deal – he really is a dead man walking.

    Shorten is the problem, he seems to leads from the rear.

  6. A serious energy transition plan would be for at least ten years. Fraunhofer IWES show how it’s done with recent report on “The Business case for the Energiewende” (*****iee.fraunhofer.de/content/dam/iwes-neu/energiesystemtechnik/en/documents/Studies-Reports/2016_BUSINESS%20MODEL%20FOR%20THE%20ENERGIEWENDE%20_web.pdf).

    This shows nicely how both the following can be true:
    (a) the transition saves money overall, that is the investments have a positive rate of return over BAU in GDP cash terms, before accounting for health and climate benefits;
    (b) there is very substantial front-loading of investment before you start getting net cash benefits in 15 years.

    Their core scenario involves steady investment in clean energy of €40 bn a year, an initial fossil fuel bill of €83 bn a year declining over time, and a total front-loaded investment increase of €310 bn summed over the first 15 years. Adjust this to Australia’s population, and these numbers would be A$19 bn, A$40 bn, and A$147 bn respectively. That’s very rough indeed, but the orders of magnitude must be about right.

    Repeating the exercise professionally, you would run into the problem that Germany imports all its oil and gas and is shuttering its coal mines, so the investment in fossil energy supply can be ignored there. The investment is not available for reallocation, as it is in a fossil energy producer like Australia. The correction lowers the net front-loading quite a lot.

    Fraunhofer is a huge network, the NIH of civilian technology, and you have to specify the institute.

  7. This is not acknowledgement of the legitimacy of climate concerns, it is a rudely raised finger to those concerns. ERF policy is so pointedly mis-aimed (as well as underfunded) that it is an insult, not a concession. And I think it is an intentional provocation to the more extremist elements amongst those of us who take mainstream expert advice seriously.

    Make no mistake, this doesn’t challenge their denier base in any way – on the contrary this is actually fuel to fire of their paranoid fantasies of our nation being forced to kowtow to globalist/socialist/environmentalist UN ‘authoritarianism’. As long as it is not ever about doing our share of fixing the climate problem, but always about ‘honouring (bad) international agreements’ the delusions they have cultivated for decades about why people care about the issue are not challenged, they are reinforced. And I imagine handing emissions reductions money to the staunchest of rural and mining opponents of emissions reductions is a belly laugh inducing in-joke to the hard right membership. A bit like giving funding for indigenous land and sea rights to opponents of indigenous land rights – which, come to think of it, they have done as well.

    Morrison’s ironic, insincere bow to ‘political correctness’ embodied in funding the ERF, to meet our (deliberately anti-ambitious) international obligations will not be misinterpreted by their hard core science denying base – although the ability to turn funding of a program to reduce emissions into a climate science denialist dog-whistle is a truly extraordinary skill!

  8. I agree with both J.Q. and James Wimberley. J.Q. is talking about Morrison’s Spending Plan and J.W. is talking about an Energy Transition Plan. There’s a huge difference of course. A spending plan must be proceeded by real plan. To be very literal, a real plan involves the marshaling of real resources to build a real structure or a real system. Of course, “real” here means physically real. A spending plan is a notional plan with notional quantities (of money) used as a calculation, accounting and administrative technique for assigning real quantities (of materials and energies) to a planned task.

    So, J.W. is right. A real energy plan for an energy transition does need to be a ten year plan (at least). The extensive and deeply embedded energy systems which power our entire civilization are not quick and easy to change. The change requires planned stages, extensive coordination and high expenditures.

    Also, J.Q. is right. He is saying the coalition have offered a spending plan without having a real plan. A spending plan without a real plan is not serious, especially when the amounts allocated are manifestly inadequate for a full transition. The coalition does not have a complete energy transition plan. Where do they spell out the stages of how we will get to 100% renewable energy use and concomitantly to 0% fossil fuel use? The answer quite simply is “nowhere” . The coalition’s “plan” is a stage of a non-existent plan. A stage is not a plan. Still less is a stage of a non-existent plan, a plan. A comprehensive energy transition plan or intent to develop such a plan does not exist anywhere in the coalition’s ideology or policy documents.

  9. The government’s plan is a joke.
    It is an attempt to appease both deniers and realists.
    If emissions are leading to a hooter temperature then a party who believes in the market simply puts a price on carbon so the negative externalities are are fully costed.The market then sorts it out.
    They are advocating again the government simply subsidising what companies are already doing

  10. Gee, its not even good politics. It’ll upset the Lib’s own neanderthal wing but is too blatantly a token gesture to get a single extra vote from the “doctor’s wives” (ie wealthy but realistic and socially aware Libs). From my work (he was my Min for a while) I always thought ScoMo a man devoted to looking after number one and able to ignore any awkward facts that might compromise that devotion – but I never thought he was dumb.

    His best bet politically would have been to stay a loyal member of the coal fraternity until the election. His second best would have been to become an overnight convert to renewables, spending a motza on boondoggles in marginal electorates. As it is he’s fallen between two stools – the package is too small to get any political benefit, but it is a (relatively) efficient mechanism that is not very conducive to pork barrelling.

    Not that it makes much difference – this government is a dead one walking.

  11. That’s a knife? JQ; “the policy is obviously designed to last, not for ten years, but for three months”. “Warren Buffett writes that his favorite holding period for a subsidiary company is “forever,”. Egalitarian and long term seems to be the real “good” for all.

    THIS is a 50 /5,000 year knife… and it is working! Has to be seen as video ro be appreciated.

    “A 5000-year project.
    “Writing and print transformed humanity. Computing will have as great an effect. What will be the shape of this transformation?

    Will it lift all people, or widen the gap? Give people agency, or give them products to consume? Bring people together, or isolate them? Deepen people’s connection to their bodies, their hands, and the real world we all depend on? Or abstract human beings into pixels and database entries?
    The time to decide is now.”
    … – 50 yr plan to have…
    “No screens, no devices. Just ordinary physical materials —
    paper and clay, tokens and toy cars — brought to life by
    technology in the ceiling.

    “Every scrap of paper has the capabilities of a full computer,
    while remaining a fully-functional scrap of paper.

    “A humane dynamic medium embraces the countless
    ways in which human beings use their minds and bodies,
    instead of cramming people into a tiny box of pixels.
    “One guest, after spending time at Dynamicland, held up
    his smartphone and shouted, “This thing is a prison!”
    I urge yo all to see the future NOW..
    dynamicland.org

    Conceived by Brett Victor I think:
    http://worrydream.com/

    And Matsushita – you are using a Panasonic procuct now… And powerwall, tesla – panasonic.

    ‘Here’s The Story Of Tesla’s Partnership With Panasonic “Matsushita was viewed as egalitarian. During the Great Depression, he said, “The mission of a manufacturer is to create material abundance by providing goods as plentiful and inexpensive as tap water.” And he planned far into the future as a “long-term visionary… [Matsushita] proposed a 250-year plan for the company, divided into 10 25-year periods that would be further divided into a 10-year construction phase, a 10-year active phase, and a five-year fulfillment phase.”
    “https://insideevs.com/story-tesla-partnership-panasonic/

    And a ringing 100 yr plan.
    “Meanwhile, thanks to a number of factors (not the least of which has been the overreach of government into the private sector), big companies are being bailed outand the rules of the game — who’s entitled to what, and why — are entirely unclear. “…
    “The point of an ultra-long-term plan isn’t to create a fixed, perfect roadmap for the next hundred years. Instead, the point is to pull management and ownership out of a fixation on quarterly results and into a view that asks what really ensures the company’s purpose and existence as a going concern. When Warren Buffett writes that his favorite holding period for a subsidiary company is “forever,” he’s expressing the same thing. “http://www.gongol.com/research/economics/100yearplans/

    Seeing is believing:
    “Visualizing data over coffee.” How can the dynamic medium make exploring data sets more *conversational*? This is a set of dynamic data cards and graphing tools based on Gapminder and the presentations of Hans Rosling.”

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