Turnbull or The Liberal Party

My Commentary on Tuesday 27 June noted that, in an address to an IPA function that day, Tony Abbott postulated that “the next election won’t be won by drawing closer to Labor. The next election can only be won by drawing up new battlelines that give our people something to fight for; and the public something to hope for”. I said  that his main themes relate to Energy Policy (a freeze on the renewable target at the existing 15% and the construction of a “big” coal-fired power station); a referendum to change the Senate; a slow-down in Immigration; a repair of the Budget through getting spending under control; and tougher measures on terrorism, incl the banning of Hizb ut-Tahri. The text of the speech and a summary of his election agenda are in Abbott’s Plan for Next Election.

This agenda for the next election differs considerably from the policies currently followed by Turnbull and is naturally seen as a challenge to him. Coming on top of Minister Pyne’s secret speech on implementing marriage equality, it exacerbated the internal differences within the Liberal Party.

Unsurprisingly, the 7.30 Report’s Leigh Sales took the Turnbull side and claimed that “far from joining Mr Abbott, senior Liberals are publicly swinging behind Malcolm Turnbull and they’re even expressing support for moderate MP Christopher Pyne. He made some indelicate remarks on the weekend that triggered this latest round of instability. Not many people in the Liberal Party believe Tony Abbott is the answer to their poor standing in the opinion polls, but as political correspondent Andrew Probyn reports, they’re nonetheless deeply concerned about the damage he can inflict on the Turnbull Government”.

Turnbull himself did not attempt on 7.30 to rebut the agenda although he reminded watchers that the existing renewable energy target was set when Abbott was PM. Two Ministers generally regarded as conservatives, Freydenberg and Porter, told Sales that they supported Turnbull. Strangely, Opposition Leader Shorten was given only one opportunity to have his say right at the end: “thank you very much. See you later”! (see Turnbull &Others on 7.30).

Today’s media commentary tend to see the situation as one which, as leader, Turnbull has to deal with by making some changes in Cabinet and/or Policy. But so far Turnbull has given no indication of moving. My perspective is that any possible adjustments to Cabinet or Policy made by Turnbull are not going to save the Liberal/National Coalition. The only way to do that is to replace Turnbull himself. Indeed there is reason to think that the real threat to the Liberal and National Parties as they have been known hitherto, comes from Turnbull himself.

Energy Policy

Possibly the most important policy difference between Abbott and Turnbull relates to Energy (Climate) Policy. Abbott’s proposal to fix the renewable target and build a big coal-fired power station indicates he does not accept the report commissioned by Turnbull of Finkel and possibly even influenced by him. In Tuesday’s Commentary I drew attention to expert analyst Henry Ergas’s reaction that it is flawed “by cavalier conclusions and unacceptably poor modelling. Moreover, the errors in the reports are hardly random: they systematically overstate the advantages of renewable and understate the continuing importance of coal”.

My attention has also been drawn to an analysis by Dr Michael Crawford, who has been closely involved in assessing possible adverse health effects from wind turbines. But his knowledge of the influences on climate extend beyond that, as shown in an open letter he has sent to Finkel, with copies to all MPs. In that letter he argues there are many flaws in Finkel’s analysis and concludes that “Given the opportunity to do a great service for the people of Australia and clarify the bankruptcy of energy policy over the last two decades, you have chosen to advocate more of what is failing badly, to obfuscate with more government agencies outside the control of the citizens who are being forced to pay you for this, and to advocate more authoritarian control over them. In short, your report is a travesty of what you were asked to do”.

The basis of the analysis by Crawford is that, since the National Electricity Market was established about 20 years ago, the rules of supply established by the administrative authority (NEMO) have allowed the price of electricity produced by intermittent devices (IEDS) such a wind and solar to fully reflect subsidies paid to their producers while the producers of electricity who use coal have been allowed to supply only the balance needed to meet demand. As usage of IEDs has increased, this means that so too have electricity prices.Crawford’s analysis is that:

• ”During the four decades covered in which state governments were independently responsible for producing and distributing electricity in their states, real electricity prices fell by about 45%, providing a large benefit to consumers and industry.
• In the two decades since the inception of the National Electricity Market, which was supposed to further reduce prices, Australia has had a more than 90% increase in real electricity prices, so that they have wiped out all the gains made between the 1950s and 1990s, now exceed the real price in 1955, and appear headed “to the moon”.
• Most of the increase in real prices has occurred over the last decade or so and is strongly correlated with the increase in production from IEDs”.

Turnbull claims that he is concerned about rising electricity prices and his initial (political) response to the Pyne/Abbott incidents was to be televised at the Snowy River Scheme. The foregoing analysis suggests that one way of reducing prices, or at least stopping further increases,  would be to do what Abbott has proposed and freeze the use of renewable at their present level.