What is the NEG Policy Now?
The editorial in today’s Australian contains an important follow-up to yesterday’s Newspoll showing that only 24% opt for the Turnbull policy of obtaining a 26-28 % reduction in carbon emissions by 2030 rather than keeping energy prices down and that 48% now favour Australia pulling out of Paris, which is up 3 percentage points (see OZ Favours Coal Instead of NEG). It also draws attention to the report by the Australian Energy Market Operator (AEMO) and its call ”for Australia’s fleet of coal-fired power plants to be operated for as long as possible to prevent a future price shock in the transition to renewables, claiming the ageing plants will still deliver the cheapest electricity for the next 20 years”.
Frydenberg Gets Help with NEG O’Seas
Today’s AFR reports it had an exclusive interview with the executive director of the International Energy Agency, Faith Birol, about the Turnbull/Frydenberg NEG policy (I have highlighted the major points made). This appears to follow Frydenberg’s private meeting with Birol purporting to explain NEG and a speech to diplomats and energy policy makers at IEA’s Paris HQ. He also claims to have briefed “key” Trump officials and chairs of US energy committees in Washington.
ACCC Report on Electricity Prices
The ACCC report on electricity prices, and the associated address by Turnbull at the Queensland Press Club, were not available on either’s webites at the time of writing this at 9.00pm and after. However copies of the report were available to the media, which also had an oral version of Turnbull’s 15 minute to the Press Club. These articles from The Australian include references to what appear to be the main points or the main emissions made orally by both Turnbull and Sims. It appears that the prices issue will again be a major item tomorrow in The Australian.
Polling and Electricity Prices
Today we have been “flooded” by opinion polls which, while not showing any overall deterioration in the Turnbull Coalition’s polling, confirm its continued inability to effect any significant improvement in that polling. The state by state Newspoll for the February-March quarter also suggests there is a continued problem in Queensland, where the One Nation vote is much higher than in other states and has increased significantly since the 2016 election result (from 5.5 to 13 percent in the February- March quarter).
More Questioning of Turnbull Energy Policy
The public address on 3 July by Tony Abbott advocating withdrawal from the Paris agreement has produced favourable reactions from several quarters but a response from Turnbull and some of his ministers which is largely dismissive and an attempt by much of the media to suggest Abbott’s analysis is outdated and should be ignored. That is what might be expected from people who have locked themselves into a fixed position that we face dangerous warming unless carbon emissions are reduced. My commentary below concentrates on those who have challenged that position.
Newspoll & Next Six Weeks
The Turnbull government has succeeded in obtaining personal income tax cuts and Shorten has had to back-flip on his promise to repeal any tax cut for 20,000 businesses. What more did Turnbull need to put the Coalition ahead in Newspoll after 35 negative results and to improve its chances in the July 28 by-elections?
Electricity Policy
As Parliament left for the six week winter break, major divisions remained within the Coalition on electricity policy, the outcome on which basically depends on what view is taken on climate change. If the view is taken that Australia must significantly reduce emissions of CO2, we will continue to reduce the use of coal to power electricity and instead use the more expensive sources of power which have already caused major increases in electricity prices even though they involve lower or nil emissions. It would also mean an acceptance of a much bigger role of government in the economy, which many see as the real objective.
Tax Cuts & Rises in Electricity Prices
The Turnbull government has succeeded in obtaining a welcome reduction in personal income taxes. But the estimated reduction in total tax levels is less than might be imagined from the media exchanges. This is important because, as stated in Budget Paper No.1 for 2018-19, “it is important that the personal income tax system does not act as a disincentive for those taking on additional work or seeking advancement”. Also that the “cap on the overall tax burden… “is consistent with the long term average of 23.9 per cent of GDP” which the government has set.
Turnbull’s Questionable Energy Policy
The debate on energy policy between the Coalition and Labor has seen both up to now adopting the same policy of reducing emissions of CO2 but with Labor supporting a much larger reduction. But we now we see an open split within the Coalition, with Abbott warning that a number may cross the floor and vote against the National Energy Guarantee (NEG). In Abbott on NEG he argues that the Turnbull government has conducted a “fundamental failure of process” that has been “stifling the proper debate that we should be able to have inside our party room”. He argues that the government has spent an “enormous amount of time” negotiating with the crossbench, but warned the backbench was being ignored. “I reckon the government needs to spend a bit more time talking to the backbench. “Yes, the crossbench in the Senate is important. Don’t forget the backbench, because you are only in government because you’ve got a backbench that’s prepared to support your legislation”.
Interpreting the Summit
As might be expected with a meeting which lacked definitive agreements, the media (and other commentarists) containmuch speculation today about what has happened and what might now happen. The general reaction seems to be that, while NK has agreed in principle to denuke, that is no different to what his father and grandfather did and it is unlikely that much will be achieved on that side. On the Trump side there are expressions of concern that too much has been conceded unnecessarily.