13
Aug
2017

Unproductive Week in Canberra Leaves Energy Policy Adrift

An Unproductive Week for Turnbull Government

My Commentary on 7 August suggested that the Newspoll on that day (a Coalition’s TPP of 47/53) mainly reflected the policies adopted by Turnbull since he became leader of the Coalition and that, unless there is a change in policies, there could be a further deterioration in its polling. I attached an article by Chris Kenny explaining why most of Turnbull’s policies were inconsistent with supposed Coalition objectives.

The past week has focussed mainly on same-sex marriage and has left uncertainty about whether it is legal to obtain in three month’s time the electorate’s view through an ABS survey and, if so, whether the voluntary voting will produce a sufficient proportion of voters to be able to say that the outcome is meaningful. Prominent public policy expert, Barry Maley, has argued in The Australian that the testing of public opinion on issues which have constitutional significance should be through a referendum, as has been used in regard to the republic issue. The apparent confusion on SS about how best to test the electorate’s view has left many asking why so much time had to be spent on that issue and a significant proportion may decide to not even complete the survey.

An article by The Australian’s Political Editor, Dennis Shanahan, concludes that  “There are still pitfalls ahead for the government and Turnbull on same-sex marriage — the High Court for starters — but for the first time in a year of meandering and divisions, there is a path forward, no matter what the result of the plebiscite, and another chance, perhaps a last chance, for the ­Coalition to draw back disaffected supporters and get back to the winners’ circle” (see Coalition Sits at the Last Chance Saloon). Some readers will recall the US cowboy movies which one watched in earlier times and whose outcome depended on who had the quickest draw. I do not think of Turnbull having a quick (let alone accurate) draw! His declaration on SS that “I’m a strong leader” carried no bullets.

Nor has that been the case with airline security. It is a puzzle as the why counter-terrorist action had not been tightened some time ago and had left much too open the opportunity for Islamist activity. While police caught the men involved in attempting to develop a “simple” mechanism to blow up a plane, reports indicate that baggage handlers (for example) were subject to only limited security. They also indicated that our security on domestic terminals is slacker than that applied in the US.  This potential threat must be remedied asap.

The week also saw a meeting on 9 August by Turnbull and Frydenberg with big electricity retailers and an indication by Turnbull that retailers would be required to tell customers when their rates are about to change. Just why such a meeting took place is a puzzle given that we already have an Australian Competition & Consumer Commission that should check whether there is adequate competition amongst retailers.  Ironically,  soon after the meeting we learnt that big electricity retailer AGL had been able to use the government controlled pricing sector to achieve a 14 per cent increase in profit. How come that as a customer of AGL I was advised a day before it announced its profit surge that I had been “mistakenly” receiving additional discounts on my bill and that these would be “corrected” on 17 August?  I sent a letter to The Australian about this and matters related to energy policy (see Reducing Costs of Living) but it was not published.

Energy Policies

In its editorial of 9 August The Australian said that energy policy is pre-eminent among the important policy challenges facing the Turnbull  government. It also suggested an important change to climate policy by giving lower priorities to emissions reduction imperatives and by giving public recognition to the very minor role Australia plays in determining total world emissions of CO2.  The Australian has also drawn attention on its front page to inadequacies recently acknowledged by the Bureau of Meteorology in past temperature records and confirmed by expert independent meteorologists, Jennifer Mahorasy and Lance Pidgeon.  An analysis published in the IPA’s recent Climate Change: The Facts 2017 by physicist Dr Tom Quirk also indicates that the rate of increase in Australia’s temperature over the last century (about 0.3 per cent) has been much less than the official figures, indeed so much so that continuation of the Turnbull government’s emissions reduction policy could not be justified.

The Weekend Australian carries further articles by reputable authors which reinforce such a conclusion (see above last three articles):

  • Judith Sloan says “Let’s face it: energy policy is a farce in this country. It makes other countries look like paragons of common sense. The US is swimming in cheap shale gas and has reduced its emissions without any intrusive government dictates, aside from some loony and ineffective measures by some of the states. Germany is building a large brown-coal-fired electricity power plant and has deferred the withdrawal of brown coal to a later date. Denmark has gone cold on wind power, having recently cancelled a large offshore project. Britain is building a new nuclear power plant. By contrast, Australia seems hellbent on sending all our energy-intensive industry broke as well as imposing ever higher energy bills on households. There has to be a better way”;
  • Chris Kenny draws attention to the disastrous results in Ontario Province Canada since the adoption there of a policy “to drive out coal in favour of renewable” … “the doubling of Ontario’s electricity prices in a decade is attributed to many factors, including upgrading of nuclear plants and transmission networks, but the main factor has been renewable subsidies and shutting down coal” … “the impact of rising prices is being felt not just by domestic consumers but by manufacturing industries … where manufacturing jobs have fallen 20 per cent in Toronto across the decade”. Kenny compares the climate policies adopted in Ontario with those adopted in South Australia “We are determined to make Adelaide a showcase city for low-carbon and clean technologies, to attract investment, drive innovation and create new jobs,” Premier Weatherill said two years ago. “Yet manufacturing jobs have declined in both places and SA’s jobless rate tops the nation”. Kenny argues that “The Prime Minister needs to take national energy policy on a radically different track that prioritises affordability and security over green gestures. The alternative would be that ‘things are going to slide, slide in all directions’”.

Today’s Australian reports that “Mr Turnbull today addressed the South Australian Liberal Party ahead of a state election in March, where energy will be a hot-button issue. He told the annual meeting that the plan was based on ideology and idiocy. “You really have in South Australia, of course, been subjected to an experiment by (Premier) Jay Weatherill. People really should conduct these experiments, as dangerous as that, privately somewhere in expert company rather than inflicting it on an entire state,” the prime minister said. Mr Turnbull said Labor’s approach to energy was a combination of ideology and politics, compared to the Liberal focus on economic and engineering. ‘But on reflection, I think I’ve been too kind to them. It’s actually ideology and idiocy in equal measures,’ he added”.

That Turnbull has stepped up his commentary on climate policy is of interest. The problem is that he has basically similar policies. The main difference is the extent of emissions reductions and increased usage of renewable. Until he reduces those targets he will be subject to a similar critique.

  • Henry Ergas mainly discusses the poor analysis used in construction of the National Broadband Network but also points out that “now that renewable generators have pocketed $15bn in subsidies, let them stand on their own two feet. And while we’re at it, let’s ensure those generators pay the full costs they impose on the network, including in terms of backup generation, rather than hoisting them on to consumers. Moreover, that requirement should not just apply to new ­sources of renewable generation, as the Finkel report argues, but to existing ones, too: if they can’t afford those costs, we are better off if they shut down”. Also, “we need to abandon the illusion that constraints can be ignored and happiness purchased with wishes. Until we do, the destruction wreaked on energy and telecommunications will be merely a teaser for the disasters that lie ahead”

The recent upsurge in critiques of existing energy/environmental policies suggests that the current review of climate change policy, presumably being undertaken in the Environment Department, should now be brought forward and should include the views of recognised independent experts. It should recommend options for reducing targets.

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