We shouldn’t be wasting time on (Issue I oppose)

Something I read a lot in political discussion is the claim “We shouldn’t be wasting time on Issue X”. Almost invariably, the writer clearly has strong views on Issue X, supports the status quo, and is aware that some change has majority support. So, their best hope is to avoid any decision at all. Of course, while statements like this logically imply that the speaker shouldn’t waste their own time on the issue, this inference is rarely drawn. The same people who tell us not to waste our time on some proposed change will spend lots of their own time fighting against it.

Feel free to point to examples or, for that matter, counterexamples.

The Coal Cartel ? Why Adani’s prospects haven’t improved

In my recent piece in The Guardian, mostly about Adani, I observed

The paradoxes of Adani are mirrored in the global coal market. Despite a small increase in 2017, global coal production is below its 2013 peak. Yet prices have recovered strongly, yielding big profits to existing miners and offering a seemingly tempting prospect for new mines.

It turns out that this isn’t quite right. The benchmark Newcastle price, for low-ash coal with a heat content of 6000kcal/kg has risen strongly, to the great benefit of companies like Yancoal, Glencore and Whitehaven. It turns out, however, that this increase isn’t representative of the broader market. Prices for lower quality coal with lower heat content and higher ash content haven’t moved at all, with the result that the premium between higher and lower grades has grown dramatically.

What’s going on here? One possible explanation is that Yancoal and Glencore, who produce the majority of Australia’s high-grade coal, have engaged in successful cartel behavior. Another is that the premium reflects shifts in demand (with China and India increasingly rejecting high ash coal, while Japan continues to demand high grade coal) and supply (few new mines are opening, and this has a bigger effect on the smaller market for high grade coal).

Whatever the explanation, most analysts agree that it is more likely to be resolved by a decline in the price of high-grade coal rather than an increase in the price of low-grade coal.

Where does Adani fit into all this. Most of the discussion I’ve found focuses on the premium between 6000kcal/kg and 5500 kcal/kg. Coal extracted from the Carmichael mine would be much lower quality, below 5000 kcal/kg.

The Business Council thinks the left has no plan? …

… That’s a bit rich

That’s the headline for my latest piece in The Guardian. Final paras

unlike the BCA, its opponents have been willing to specify the measures needed to pay for these desirable outcomes. Eschewing the small target strategy routinely recommended for opposition parties seeking office, Labor has announced a range of revenue measures that would finance a substantial expenditure program, combined with some tax relief for low and middle income households. These include scaling back negative gearing, crackdowns on tax evasion and avoidance, and a restoration of the 2% levy on top incomes.

The Business Council has long been a weak and ineffectual participant in Australian policy debate. If it is to be taken seriously, it needs more than astroturf front groups and websites. The Council needs to take on some of its members, both in relation to their corporate behavior and in their resistance to any tax reform that might cause them any pain. Until then, Jennifer Westacott should be more cautious in asserting that others lack a plan and believe in “fairies at the bottom of the garden

Read More »

The centre cannot hold

Lachlan Harris and Andrew Charlton have a piece in the Fairfax press decrying the collapse of centrism in Australia.

There are some problems with their data. As William Bowe has pointed out, the change in voter attitudes described by Harris and Charlton as “polarisation” looks more like a straighforward increase in support for the left, rising from 19.5 per cent to 31.4 per cent over the period 1996 to 2016. Measures of voter disaffection show no consistent trend over the period except for a sharp uptick in 2016.

Regardless of the data, there’s no reason to dispute the central claim that Australian politics is more polarised than at any time in the past twenty years.

The big problem with the piece, and the besetting sin of centrist analysis, is the near-complete absence of discussion of actual policy. The assumption is simply that whoever is in the middle must be right.
Read More »