Institute for Private Enterprise » John Stone

More Ministers Quit; Treasury Officer’s Life

Des Moore — Sun, 03 Mar 2019 22:31:36 +0000

Can Morrison Cope with Two More Cabinet Departures

Last Friday’s Commentary suggested that the latest Coalition’s Newspoll of 47/53 for the third successive time indicated that the Morrison government was still in serious trouble. I suggested that the additional policy decisions announced by Morrison on climate policy would be unlikely to help close the gap.

These measures included acceptance of the Paris agreement and an expanded use of renewable through the establishment of the very uneconomic Snowy2.0 and the usage of “big batteries”. Energy Minister Taylor also claimed the new measures would cut energy bills while lowering emissions but this failed to take account of the additional costs from using the Snowy or from back-ups needed when other renewable are not available. I noted that it seemed unlikely that the Energy Minister would be able to reduce electricity prices except through the adoption of a regulatory system which legally limited the maximum price able to be charged by retailers.

While the Cabinet elevation of Senator Reynolds to Defence Minister (from Assistant Minister for Home Affairs) means the Morrison cabinet now has the greatest representation of women in the senior ministry of any government, Pyne will stay as head of that ministry until after the election, when he will not stand for return to Parliament. Mr Morrison said of Senator Reynolds: “When you can call up a brigadier, in the form of Linda Reynolds, to take on the role of defence minister, it shows we have a lot of talent on our bench to draw from. Linda will be the second female to serve in a cabinet-ranked defence portfolio. She will bring the number of female members in the cabinet to seven. “This is the highest number of any cabinet since federation.” More importantly, in the interviews she has conducted since her appointment, Reynolds has shown she should have become a cabinet minister some time ago.

The recent loss of several Coalition Ministers, including (until the election) of Pyne as a senior Minister and the immediate resignation of Defence Industry Minister Ciobo, has led some to question whether this might not allow Morrison greater freedom to run the “ship” and to have the Coalition become a genuine “conservative” party with a reduced influence from so-called moderates. Of particular importance in this regard is the end of Pyne, who is reported as once saying he could have stood for Labor, and ran as a Liberal only because he lived in a Liberal seat (see Norington’s Analysis of Pyne or Realities of Politics). With both Turnbull and Pyne departing, the potential for a move of the Coalition to conservatism in greatly enhanced.

In today’s Herald Sun, commentators Andrew Bolt and Rita Panahi both argue that this situation may help the electoral position of the Coalition. Bolt argues that

“Malcolm Turnbull gone, Julie Bishop and Kelly O’Dwyer going, and now Christopher Pyne, too. Know what some Liberals call that? A good start. The election will do the rest. Check Sportsbet’s seat-by-seat odds. They tip that from the ruins of this Morrison Government after the May election will crawl a Liberal party where conservatives will again have the numbers and most of the talent. The Liberal Left has destroyed not just the party but itself, and that’s why some of its leaders are now deserting — and slamming the door in fury” (see attached Coalition May Become Conservative).

Of course, there is a lot of water to pass under the bridge before the election and Bolt acknowledges that Morrison himself is “ideologically flighty”. But Morrison has a much improved outlook if he can present himself as a leader who believes in the Menzian “small” government approach and who will spend more time attacking the policies being canvassed by Shorten.

Responses to Assessment of Treasury Life

During the time I was in Treasury (for 27 years until 1987) I naturally had several acquaintances with David Morgan who joined in 1980 at age 33 and left in 1990 to join Westpac. He did not work for me during that time but I became familiar with his economic and political views, although unlike some others I was not invited to his marriage to a Labor minister. His decision to have a book written about his life, titled David Morgan: An Extraordinary Life by an Oliver Brown and published at age 72, reflected his somewhat aggressive approach to letting the world know of his views. On 2-3 March the AFR published an article by Brown who says that at Westpac “he was given a brutal assessment of his management skills”.

The Australian’s Business journalist Richard Gluyas has also written about Morgan’s experiences and his article of 2-3 March is attached (see Gluyas on Morgan). That article however does not appear to provide a completely accurate picture of the then Secretary to the Treasury, John Stone. This has resulted in letters published by each of Stone and myself below.

Ros Kelly warning ‘did not happen’

Letters Published in The Australian, John Stone, Des Moore, 12:00AM March 4, 2019

8 Comments

I refer to Richard Gluyas’s Business Review article (“How a banker’s life lessons were forged”, 2-3/3) regarding David Morgan’s biography. In the article Morgan is quoted from the book as saying: “Over drinks one Friday night in Canberra, before (Morgan) married (Ros) Kelly in 1983, the arch-conservative then-Treasury secretary John Stone scowled at Morgan: ‘If you marry that woman, you will never be secretary to the Treasury’.” That is untrue.

I would never have said such a thing about Ros Kelly, nor would I have thought of Morgan (then a relatively junior officer) as a possible future secretary to the Treasury. My subsequent invitation (which I accepted) to attend their wedding renders the allegation even more bizarre.

I have known Morgan for 47 years. His intellectual abilities have never been in doubt. It was for an entirely different reason, when he asked some time ago that the author of his then planned biography might speak to me, that I declined.

John Stone, Lane Cove, NSW

In his commentary on David Morgan’s book on his own life, Richard Gluyas writes that “after an early career at the International Monetary Fund”, Morgan switched over to Treasury where he formed a tight bond with fellow thinkers who allegedly “marginalised” Treasury secretary John Stone, who “then exited Treasury”.

I have not read this book but am puzzled by this assertion.

As a deputy secretary Treasury at the time Stone resigned in 1984, I was in close contact with him at that time and I do not recall him attributing his resignation to any pressure from within Treasury. To the contrary.

Regarding the exchange rate float in 1983, Paul Keating’s concerns later of the danger of us becoming a banana republic suggest Stone correctly advised implementing other regulatory and policy changes with the float.

Des Moore, South Yarra, Vic

CChange Conference; Judith Curry on Predictions of CChange

Des Moore — Sun, 16 Dec 2018 04:15:29 +0000

Climate Change Conference & Judith Curry’s Analysis of Sea Levels

It was great to discover at last Wednesday’s Christmas drinks at Treasury (in Canberra) a number of “oldies” who said they were enjoying my Commentary and in particular the scepticism about the dangerous warming nonsense. While I resigned from Treasury in 1987 I later hoped that, with the danger thesis becoming more widely reflected in government policy both here and overseas, Treasury would publish analyses as John Stone and others had done on various controversial economic subjects during my time there. In fact, I edited a couple including one on the New International Economic Order(NIEO), which had an aim similar to one adopted by believers in the dangerous warming theme viz “save” developing countries by providing squillions of aid which would allow them to substitute costly fuel sources for cheaper fossil fuels.

But such a published Treasury analysis post 1987 was apparently regarded as too “difficult” politically, particularly in circumstances where, after his defeat of Tony Abbott, Turnbull as PM regarded climate change action as one of his main policy objectives. Now that Turnbull has been defeated his successor Scott Morrison has not made it clear what his policy is, although he appears to retain Turnbull’s Paris agreement of reducing emissions by 26-28% by 2030 even though this agreement is non-binding. By stark contrast Opposition Leader Shorten endorses a target of 50% emissions reduction by the same date.

Our main hope for change has been that some prominent world leaders and/or scientists would pour cold water on the danger theme and that this would lead to a reduction in emissions targets. A start has been made with the presidents of Czechoslovakia (Vaclav Havel) and the USA (Trump) rejecting the thesis and an increasing number of scientists exposing the flaws. Trump has indicated the US will formally withdraw from the Paris Agreement made in 2015.

Reports of the climate change conference being held in Poland (due to have finished but still going last night as the 24^th COP) suggest the US attitude has reduced support for action. This reduced support is reflected in

A reduction in world leaders attending. In fact, media reports on the conference do not quote any world leader. With Turnbull gone, the Australian rep is newly appointed Environment Minister Melissa Price and few other countries seem to have sent their leaders. Most noticeable is the absence of French President Macron who boasted of France as a leader of climate change action by imposing a fuel tax and has now had to withdraw it because of yellow-vest protests across France. While these protests are not only being made in support of sceptics of the warming thesis, they send a message to leaders that it would be unwise to adopt the Macron approach of initiating specific policies to reduce usage of fossil fuels. It appears that big producers of fossil fuels, mainly Russia and Saudi Arabia, have supported the US during the conference;
A pro-fossil fuel event was held at the conference by the Trump administration and, according to ABC news, the only non-American panellist at the event was Australia’s Ambassador for the Environment, Patrick Suckling. “Fossil fuels are projected to be a source of energy for a significant time to come,” Mr Suckling said (see ABC on CChange Conference);
The refusal of some countries to include in the communiqué a “welcome” to the last special (sic) IPCC report and instead to make that simply a “note” of the report. However, one report says the communiqué will not include any reference to that report (see BBC on CChange Conference 15/12);
UN chief Antonio Guterres warning that a failure to reach a satisfactory conclusion would be “suicidal,” a point reportedly echoed by small island states fearing for their existence as rising sea levels render their homes uninhabitable.

While Guterres will doubtless attempt to wind up the conference with a communiqué saying that a “consensus” was reached on the need to reduce emissions, any such consensus is unlikely to have the post-conference political support its predecessors felt they had. Also, it will be less difficult politically to justify changes in policies which involve less aggressive action to reduce emissions and provide a longer time frame for continued use of fossil fuels, as Australia’s Ambassador for the Environment implies .

Such possible changes in Australian policy are supported by The Australian’s decision to publish an article on sea levels by US climate scientist Judith Sloan. She assesses estimates of “the maximum possible global sea level rise by the end of the 21st century range from 1.6m to 3m, and even higher, ” as “extreme values of sea level rise … regarded as extremely unlikely or even impossible. Nevertheless, they are driving policies and local adaptation plans”. She also argues that

“climate model predictions consider only human-caused warming and neglect changes in natural climate processes, such as variations in the sun’s output, volcanic eruptions and long-term changes to ocean circulations. These natural processes are expected to have a cooling effect in the 21st century” (see Judith Curry: Alarmist Sea Level Predictions Not Likely to Occur).

Curry’s analyses are of particular importance because she has changed sides. As pointed out in my letter published by The Australian, “after careful research, she became a sceptic and her analysis has been recognised as suitable for publication after peer review” (see CChange Letters 13/12). Other letters published also support Curry and her implicit support for an energy policy which is not based on predictions “regarded as extremely unlikely or even impossible”.

The conclusion in my letter is that “If the Morrison government were to recognise this it could justify lowering Australia’s target for reducing emissions and adopt a policy based on reducing electricity prices”. That would be a potential winner for next year’s election.

US Wins at G20; Morrison Meets Trump; Germany Fails To Successfully Employ Renewables; Stone on Immigration

Des Moore — Sun, 02 Dec 2018 06:05:20 +0000

US Wins at G20 and Morrison Performs Well

Although there has been a “final statement” by leaders attending the meeting of the G20 in Argentina, the text does not seem available on the web and nor does the communique. However, some media are reporting on what was agreed. The outcome on trade was expected to reveal something on the what has been described as a dispute between the US and China (but which has implications for all trading nations). It appears that the US did succeed at G20 in obtaining agreement that the present arrangements need to be changed. The words reported as being used in the communiqué are as follows

“International trade and investment are important engines of growth, productivity, innovation, job creation and development,” the communique says. “We recognise the contribution that the multilateral trading system has made to that end. The system is currently falling short of its objectives and there is room for improvement.”(see G20 Meeting According to the Guardian)

The US also appears to have successfully downplayed the notion that globalised agreements on policy issues are the way to go.According to the Guardian report, in particular “speaking off the record, a senior US official told reporters the US “specifically preserved and explained our position for why we’re withdrawing from the job-killing Paris agreement”. The official claimed to have seen signs of “the coalition fraying” among some signatories to the Paris deal, “like Turkey, like Saudi Arabia, like Russia”. Separately, it is reported that all except the US agreed on retaining Paris, although some only agreed reluctantly (the next IPCC meeting starts in Poland tomorrow). Note also the downplaying of the role of the IMF.

Historically, international meetings such as the G20 (which started with meetings every six months but these are now only yearly) have in practice had little effect on policy decisions made by individual countries, particularly by the US. Under Trump’s Presidency the US will be even more “nationalist” in its influence (particularly through his White House adviser, John Bolton) and, even with the establishment of China as a more influential nation internationally, there is no sign of “globalisation” of policies.

However, the meetings do provide an opportunity for smaller countries such as Australia to meet with the larger countries and let their leaders know of any bilateral support or opposition. Morrison took advantage of this in his 25 minute meeting with Trump, which occurred because Trump cancelled his sideline meeting with Putin because of Russia’s attack on the Ukraine navy. While it appears that Morrison failed to use the opportunity to explain why Turnbull ceased to be PM, he seems to have indicated support for the US on trade and on its policy on Iran and terrorism generally. According to Weekend Australian, “the Trump administration views Mr Morrison as a hardliner on border protection and has looked favourably on the Prime Minister’s pushback against Iran and his review considering shifting Australia’s embassy from Tel Aviv to Jerusalem”.

Trump certainly gave Morrison a big tick (see Morrison’s Meeting with Trump) and he should now use that to his advantage in Parliament and in enunciating Liberal policies. But as The Australian’s political editor points out, he can’t do it all himself. Rather, “Morrison needs to broaden that argument into a strategy based on policies that have been worked through with his colleagues and give his fractured followers something to focus on apart from each other” (see Shanahan on Morrison). As I argued in my Commentary last Thursday, Morrison needs to indicate that Turnbull’s (losing) policies have been changed and, in particular, his energy policy must ensure that electricity prices will fall substantially not through the so-called big stick approach but through a competitive market.

Energy Policy

On Energy Policy, there are recent developments which reinforce the views of skeptics on policies reducing CO2 emissions. These include

An assessment by a German analyst that “More and more people are about to realize, that supplying the world with stable energy from sun and wind only, will be impossible. Germany took on the challenge to show the world how to build a society based on green energy. They have now hit the wall. Germany has not reduced CO2 emissions over the last 10 years despite huge investments in green energy production capacity” (see Interesting Comment on Renewable Energy);
An assessment by a local physicist of the composition of C02 suggests that not only are ocean sources and plant sources independent but only some 27% of fossil fuel emissions remain in the atmosphere;
An analysis by Swedish sea level expert Nils-Axel Morner indicates that, contrary to IPCC reports, the rate of increase in sea levels has not increased.
Increased analysis showing mistakes in official temperature measurements which falsely show a faster increase in temperatures and a failure to acknowledge that the cause of increases is importantly due the natural causes.

The Morrison government could reduce the sympathetic beliefs by sections of the public, including last week’s street rallies by 10 year old children, that temperature and other weather changes are due mainly to human-caused production of fossil fuels. That would require a publication of a comprehensive report authored mainly by skeptics and should help the government justify the modification of existing targets of emissions and renewable.

Stone on Immigration

I have previously drawn attention to arguments advanced by Stone for a substantive reduction in immigration rates and for not signing up to the UN playing a role in advising on immigration policy. He has now published an article in Spectator complimenting Morrison on the government’s decision that Australia will join the US, Israel, Austria, the Czech Republic, Poland, Croatia, Hungary and Bulgaria in refusing to sign the UN’s ‘Global Compact on Migration’. At the same time he asks why the UN proposal to provide advice on refugees has been signed by Australia and why Morrison’s announcement to consider a reduction of only 30,000 from the immigration target of 190,000 (see Stone on Immigration). He points out that “Australia not only has a large and exceptionally costly refugee and other humanitarian resettlement program, but also makes contributions to countries (e.g., Jordan) where refugees are encamped, and in many cases to their countries of origin (most notably, Afghanistan)”.

Immigration Policy; Turnbull Rampant; Terrorist Identification Rules

Des Moore — Mon, 19 Nov 2018 20:24:00 +0000

Immigration Policy Needs to be Stated

In last Thursday’s Commentary I drew attention to an article in The Australian by John Stone suggesting that immigration isthe most obvious example of Morrison’s present policy deficiencies and arguing that the permanent settler program should be cut by 60,000. Stone added that if Morrison was “prepared to say that Australia will continue to be non-discriminatory on racial or ethnic grounds, but will henceforth reject all permanent visa applicants judged to be culturally incompatible with our Australian way of life, he would enormously enhance his electoral prospects next year”.

Since then the need for a statement on immigration policy has become more important given that the Intergovernmental Conference to Adopt the Global Compact for Safe, Orderly and Regular Migration is to be held on 10 – 11 December in Marrakech, Morocco. Although not legally binding this would allow the UN (which will establish the compact itself through an agency) and representatives of other member countries a basis for seeking changes to our policy. One out of a large number of “rules” is that the compact “aims to mitigate the adverse drivers and structural factors that hinder people from building and maintaining sustainable livelihoods in their countries of origin” (see UN Agreement on Migration, which allows access to the Compact of no less than 34 pages!).

Australia should not be a member of any international body having the right to use such an arrangement as a basis for comment on our immigration policy. That is a matter for Australia alone. Last Friday’s Spectator weekly magazine has an editorial arguing strongly that we should not sign the compact and concluding that“if the Morrison government goes ahead and signs Australia up to these follies, thereby putting at risk our precious sovereignty and hard-won border security, it will be impossible to continue” the support it has been giving to the Morrison government.

Turnbull Continues Rampage

Contrary to his undertaking to keep out of politics after he ceased being PM, Turnbull has told a NSW Bar Association dinner of the various faults of the Liberal Party and of the failure of anyone who voted to remove him to explain why! According to an SMH/Age reporter, Turnbull “reserved his harshest remarks for the man blamed for instigating his demise – Home Affairs Minister Peter Dutton, who scored 35 votes against Mr Turnbull in the first leadership ballot, in what turned out to be a fatal blow. ‘If Peter was the answer, you’d have to ask: what was the question?’ Turnbull said to roars of laughter and applause. He later added: ‘I’m not a hater, I’m a positive person’” (see Turnbull on Dutton).

It is surprising that Morrison has not yet indicated that Turnbull insisted on policies which became inconsistent with Liberal values and that this was the cause of his removal. Such a statement would help the Coalition’s polling. Indeed, it may be a sine qua non for it.

Identifying Possible Terrorists

Both News Corp and Fairfax Press have continued today to write about the Bourke St incident and have been examining the problems faced by the police and intelligent agencies in assessing who should receive copies of “sensitive” assessments of possible terrorists and at what stage legal action should be taken to stop possible terrorist action. From the outside it appears that there are serious deficiencies in existing arrangements and, while there are limits in the extent to which terrorists can be identified, based on the experiences reported in regard to the Bourke St and other terrorists it should be possible to tighten constraints on people who are on the fringes without unduly affecting civil liberties.

The fact that the Bourke St terrorist had had his passport withdrawn sent a warning message and all relevant authorities should have been told. Similarly, the fact that he had also broken his numerous bails should have warranted a watching regime, as should the Perth man who had his passport closed. It is of concern that so many appear to be being watched and that this costs much. But Australia does not want to reach the French situation where armed forces are used in the Paris streets ie better to increase spending now when we likely have fewer possible terrorists (see Difficulties in Identifying Terrorists).

California Fires

The horrendous fires in California have produced many explanations of causes , including of course “climate change”. But CFACTs refers to the view of Marc Morano, a US climate expert who operates Climate Depot, that “California’s rain and drought are historically normal. In fact, the total U.S. acreage burned by wildfires is actually down in recent years. That said, there are anthropogenic roots to this catastrophe. But they are not the human causal links Governor Brown points to. Rapid population growth, extensive development, poor water management, and most critically, irresponsible forest management are principally to blame. Green activists blocked forest clearing in the name of species protection, leaving California with 129 million dead trees, clogging 8.9 million acres”.

Note the graph showing that the extent of US forests burned was much greater in the 1920-30s than it has been recently (see California Forest Fires).

Morrison Becoming a Hasty Decision-Maker

Des Moore — Sat, 06 Oct 2018 05:03:32 +0000

Polling Under Morrison Still Needs Big Improvement

Yesterday’s Commentary referred to a number of policy decisions and comments on policy positions made by PM Morrison which raised concern about the directions being taken by him and, in particular, whether his government is differentiating itself from the leftish Turnbull government to a substantive degree. The publication of an article in Spectator of 6 October by John Stone (see Stone on Morrison), and other developments, suggest the Morrison government does not seem at present to have the capacity to handle issues in a way conducive to attracting the electorate to the Coalition.

This concern has increased with the latest quarterly Fairfax poll published yesterday showing the Coalition still well behind on a TPP of 47/53 per cent. While this covers part of the period Turnbull was in power, and it is an improvement since the previous poll of 45/55, the headline to the accompanying SMH article – “huge road ahead of Scott Morrison and the Coalition” – is correct (see Fairfax Poll Shows Coalition 47/53). It seems likely that Monday’s Newspoll will also only show a similar improvement since its previous poll of 46/54 published on 24 September.

Stone’s DIS-CON NOTES

While acknowledging that “Morrison deserves some time to ‘prove’ himself”, Stone is critical of a range of decisions to date. These include the dumping of the decisions to raise to 70 the age at which the pension becomes available, the floating of a possibility of having an Aboriginal equivalent to Australia Day, and the acceptance of argument that adherence to the Paris climate accord be retained simply because it would otherwise offend Pacific Island governments. His DIS-CON NOTES also draw attention to the need to frame policies to handle forthcoming UN meetings which seek global control on immigration policy and the establishment of a legally binding treaty on reducing emissions and providing aid to developing countries of $US100 bn per annum to help with the alleged global warming threat.

Stone argues that the right decisions on these issues “will reassure all those Dis-Cons without whose votes he cannot win the next election” and he suggests other decisions which would help too:

Cut immigration by (say) 80,000 per annum, spread over the next two years; reject the Aboriginal industry’s presumptuous demand for a constitutionally imbedded ‘voice’ in the parliament; seek out a top quality businessman, with real media experience and a clear understanding of the ABC’s political bias, to appoint as its chairman; announce that the government will, if re-elected, move to abolish the Human Rights Commission.

Other Developments Which Need Urgent Attention

These include

A response to polling showing the once-safe seat of Wentworth is “on a knife-edge ahead of the October 20 poll” (see Wentworth Outlook) .
Ensuring that urgent attention is given by the Special Minister of State appointed by Morrison to examine the apparent over-spending on communications by minister Stuart Robert who Morrison re-appointed as a minister and is reported as being Morrison’s numbers man (see Stuart Robert).
An explanation by Morrison himself of whether the Australian Power Project CEO is correct in predicting a significant rise in gas/electricity prices in this summer and, if so, what he intends to do about it (see Power Prices Predicted to Rise).
Why Morrison has so brusquely rejected the offer by Shorten to discuss immigration policy (this is on Immigration Policybut Morrison has since rejected the offer in a “not worth considering” manner).
Whether Social Services minister Fletcher has responded correctly on the possible addition to budget spending under the NDIS scheme (see NDIS Threat to Budget)

The Process of Decision Making

This article by The Australian’s political editor, Dennis Shanahan, draws attention to the failures occurring in the political decision-making process and he quotes from a report by the IPA. The IPA finds there is “pressure for senior politicians in governments and oppositions to make decisions quickly and confidently to appear decisive, pander to populist ideas to appear responsive, manufacture wedge issues to distinguish themselves from their opponents, and to put a spin on everything to exaggerate its significance”.

Unfortunately, Morrison seems increasingly to be in the hasty-decision making category.

Government Policies/Advocacies

Des Moore — Thu, 04 Oct 2018 00:56:06 +0000

Today’s media contains reports which are of serious concern in regard to the capacity of governments and political leaders to operate or propound policies which are in the interests of communities considered as an entity rather than of particular groups. These are briefly described below and, except for two, the attachments.

Morrison Government Policies

I have already expressed some concern that the Morrison/Frydenberg government is portraying itself as too close to the Turnbull regime. This seems to be reflected in statements and policies which are now being made and/or implemented by those two. For a start, it is now reported that, instead of distinguishing his government from Turnbull’s, Morrison has in fact offered Turnbull in New York that some of his travel costs on “government business” could be met (see Turnbull’s Travel Costs Offered by Morrison). This comes on top of his acknowledgement of having frequent contact with Turnbull in NY.

And, although Morrison is attacked front page in the Fairfax press on failures (sic) to implement climate change policies or indeed to take them further (see Fairfax Attacks Morrison for Abandoning NEG), Fairfax overlooks his retention of emissions reductions and increased renewables while continuing, contradiction ally, to claim that power prices will be reduced and that he has appointed a minister to do this. No indication has been given as to what attitude the government takes to the IPCC report to be released on Sunday next and which is already reported to once again be endorsing the dangerous warming theory. This despite it being the umpteenth such report which has made incorrect temperature predictions and failed to attribute to reasons other than CO2 increases which may have caused temperature increases (see attached letter published in The Australian by expert analyst William Kininmonth on CChange).

As to the budget, the Australian’s David Uren notes that while “the Morrison government appears to have decided that budget repair is mission accomplished,

big spending decisions — the $4.6 billion fix for school funding and the $9bn fix for Western Australia’s GST — are unlikely to be offset by savings. There is still a drought package, a small business tax package and a federal election to come” (see Morrison/Frydenberg to Ease Budget Policy?). Yet while both Frydenburg and Morrison have acknowledged that new spending should be offset by savings, they do not give any undertaking of such action. Uren rightly concludes that “there should be a greater buffer against adversity in the budget before we start spending surpluses that are yet to arrive”.

As to the ABC, apart from the appointment of the very pro-ABC Ferguson as acting chair (for which there has been no explanation), Morrison seems happy that the inquiry by the Departmental head will provide a satisfactory basis for possible changes. Yet controversies continue about what actually happened to instigate the sacking of Guthrie and why Ferguson could not have been requested by the Minister for Communications to make obviously-needed changes as a condition of her appointment. In the attached article (ABC Stuck with Greenism) former Chair Maurice Newman identifies many but his reference to the failure to handle complaints (0.5% upheld !), and the rejection of an analysis by expert Meteorologist Bob Fernley-Jones, indicate the need for immediate change (and for there to be a change which would give credibility to the government).

As to foreign policy, the increased foreign activity by a China, now run by a Marxist who has “shuffled” leaders to centralized power in himself, requires much greater expressions of concern by Australia. This applies to inter alia a number of Chinese activities including in the South China sea. Defence Minister Pyne, who addressed a dinner I attended on Wednesday evening, said that Australia will be participating in an official group which will be sailing through the SC sea but did not say whether that group would accept any Chinese restrictions and what it would do if the Chinese acted as it did against a US ship (see Chinese Threaten US Warship).

Morrison’s attempt to explain that Australia has good relations with both the US and China fell short of what our foreign policy requires, which would include endorsement of US policy supporting independent nations and which recognises how important to us the US is militarily. Pyne mentioned that we have increased defence spending since the cut-backs under Labor and said the aim is to lift defence spending to 3% of GDP from the 1.9% aim in 2018-19. But we are small and the planned new subs have not yet been started and will not be ready until 2030.

This situation requires closer support of US defence/foreign policies, including the de-nuclear policies in regard to Iran, which has now attempted a bomb plot in France where the counter-government for Iran is situated (see France Threatened by Iran). The US describes Iran as “the world’s top sponsor of terrorism” and it has conducted terrorist activity in countries distant from itself. Australia should recognise and support the US policy on Iran.

Morrison Has Long Way to Go

Des Moore — Sat, 08 Sep 2018 12:55:36 +0000

Morrison Has A Long Way to Go

My last Commentary on 6 September suggested that Morrison has an “in-between” policy on energy and that it was hoped that he would make a broad announcement on policies in a speech scheduled to be made in Albury later that day. Alas, that has not proved to be the case and, despite the abandonment of the Turnbull/Frydenberg NEG, energy policy is worse and as confusing as it was under Turnbull. A quotation from his speech published in the SMH/Age gives the gist of his position,viz

“Mr Morrison said his government would stand by its pledge to reduce greenhouse gas emissions by 26 per cent by 2030 but had no intention of reviewing or adjusting the target in the next term. “I have no plans to do any of that,” he said, adding that Australia had delivered on previous United Nations commitments and would meet stand by the Paris climate change agreement as well. “The government’s policy has not changed. We smashed the Kyoto target and Kyoto 2 and I’m very confident that the current commitment will also be achieved . That’s one of the reasons why I don’t see the emissions argument playing into the electricity price argument.”

… “Mr Morrison denied the emissions target would force up electricity prices. “We’ve separated the two things. There was an effort to work those two issues together. That hasn’t been successful,” he said, in a reference to the government’s internal row on climate policy and its decision to abandon cuts to emissions as part of the National Energy Guarantee. “And so I have a minister for the environment who will pursue climate policy and I have a minister for energy who gets electricity prices down. I think that simplifies the world a bit.”

In short, the cost-raising targets for emissions and renewable remain extant and the policy remains that the government will intervene in the electricity market to an even greater extent than scheduled ( by establishing a “safety net” on price, taking a big stick to major energy companies and backing investment in a new energy generation capacity). One wonders whether Frydenberg persuaded Morrison not to modify the previous policy lest that would expose his closeness to Turnbull and would create too much of a challenge from Shorten. Note that there is no mention of any consultation with Cabinet.

Note also Chris Kenny has pointed out that:

“a bill for an act to amend legislation relating to emissions of greenhouse gases, and for other purposes, has not yet been repudiated as Coalition policy. Morrison and his Energy Minister, Angus Taylor, surely must act to drop it formally when MPs gather in Canberra next week. Despite splitting the energy and environment portfolios and demanding Taylor drive down power prices, Morrison repeatedly and emphatically has committed the Coalition to meeting the Paris targets. At Albury he said the targets would be met easily, ‘with no impact on electricity prices at all’.

This posturing could get messy. Already several backbenchers are agitating to withdraw from Paris and former assistant minister Keith Pitt has rejected a frontbench position to argue this stance. Critics portray them as ideologues, whereas in fact supporting cheap energy is practical and pragmatic; it is making costly and futile climate gestures that is ideological.

It is one thing for Morrison to remain in Paris but it is quite another to place great store on meeting the targets. Most other signatories have no meaningful targets to meet or are on track to miss them. Our Prime Minister ought to make clear that if something needs to give on electricity prices, reliability or emissions targets, it is the climate goals that will be disregarded. Instead he is stuck arguing a contradictory line: that the Paris emissions reductions can be delivered at no cost but Labor’s higher targets will be costly. The truth is policies such as the renewable energy target that were designed and implemented to meet emissions reduction targets already have prompted the closure of large amounts of dispatchable generation in South Australia and Victoria, driving increases in prices and decreases in security of supply.

Arguing the Paris targets have no price impact is just bunkum; it is possible from this point forward only if we ignore how we got to this point. This sort of statement would be called out as a bald-faced lie by Labor, the ABC and most of the press gallery except that they are ideologically predisposed to climate gestures, no matter their cost.

Having seen Turnbull skewered for a second time on climate policy, Morrison must deliver clarity. He needs to remember the Coalition was elected in a landslide promising to undo costly climate interventions, not to implement them. Outside electricity, Paris could play havoc with farming, transport and energy export (see Kenny on Morrison’s Energy Policy).

The reality is that so far Morrison remains a long way from “cutting the mustard”, about which John Stone asks in an article published in today’s Spectator (see Stone on Morrison). Stone argues that “Everyone who seeks, as I do, to avoid a Labor government must wish Morrison well; and since Turnbull’s sacking, and Julie Bishop’s relegation to the backbench, were essential if the Dis-Cons (disaffected conservatives) were to be mollified, he has in that sense made a good start. However, Dutton’s demotion arouses more widespread questions about the new ministry. The fact is that Morrison owes his election to all those left and far left Liberals who previously supported Turnbull, and this is reflected in his appointments”.

On this, Stone points out that, “with a couple of notable exceptions, his new ministry seems little changed in orientation from its predecessor”. He praises the appointment of Taylor as Minister of Energy “to clean up Frydenberg’s mess” and Dan Tehan as Minister for Education “to repair the Birmingham shambles” but regrets the omission altogether of Michael Sukkar who had been Assistant Treasurer. And he suggests “if there is one talisman to which those Dis-Cons will turn when deciding whether to return to their former Liberal affiliations, it will be their assessment of how Abbott has been treated. There is only one word for that – shamefully. On personnel grounds, then, the new Ministry fails the test. Despite all those honeyed words about “re-uniting the party”, Morrison’s appointments are inconsistent, overall, with that objective”.

Unless Morrison can somehow improve the mix, it seems we face more troubles within the Liberal party. Monday’s Newspoll may show an improvement on its predecessor (TPP 44/56) but seem likely to leave Labor ahead

Samuel Griffith Conference Showed Increased Conservatism

Des Moore — Tue, 07 Aug 2018 11:36:36 +0000

Climate Policy Must be Changed

The annual conference of the Samuel Griffith Society , which finished at 1.00 pm last Sunday after starting on Friday evening, was notable for many reasons but most importantly showed through those who spoke and attended that the “conservative” movement is strongly increasing. The expansion in the Society is due importantly to the contribution by leadership from Stuart Wood QC, who is also able to be a leading industrial relations barrister.

To portray conservatism as increasing may seem odd. But what is often overlooked is that conservatism often requires making changes in order to resist the pressure from those who want to expand the size of government, particularly the central government and at the expense of the states and what are their seemingly obvious functions.

We were fortunate in having a co-founder of the Society, John Stone, attend the conference and participate through some important commentaries from the audience. My only commentary was made on a paper by Archbishop Julian Porteous on freedom of religion, on which I suggested that Islamic religion did not qualify. This received much applause, although some suggest that the test is whether those who profess to be Muslims observe good behaviour in society.

It is appropriate to draw attention to some of the presentations. That made by Chief Justice Susan Kiefel drew attention to the difficulty of where to draw the line on the use of the defence power. From a political viewpoint the most important were those made by Tony Abbott, Peter Dutton and Campbell Newman. Copies of their presentations are only available for Abbott and the text of his is attached (see Abbott at SGriffith). This is well worth reading in full and, although wide ranging, it is remarkably short and yet succeeds in getting across important points, including some which are topical, such as

“We have to keep reform alive because it’s the reforms of today that create the prosperity of tomorrow. Budget repair, federation reform, productivity reform and tax reform can’t stay in the too hard basket for the whole term of this parliament”.

The attached report on Dutton’s address (see Dutton at SGriff 6/8) does not convey the extent of his address but it illustrates his preparedness to tackle difficult issues, viz

“We constantly see pressure heaped on businesses to observe all manner of left-wing ideological fetishes,” Mr Dutton said. “The difficulty is that many of these companies have now withdrawn completely from any discussion about economic or industrial relations policy. No company is out there at the moment flying the flag on business tax cuts, very few companies are talking about the need for industrial relations reform and it is not good for public debate.

“Economic reform becomes much harder if the government is left as a lone voice in any argument. “When the business community is more comfortable pursuing left political issues than it is standing up for its shareholders something has gone terribly wrong. “When Australian businesses are routinely bullied into supporting ideological positions, we have a big problem,” Mr Dutton said.

I managed to have a letter published in today’s The Australian drawing attention to the lead speakers and to the more coherent policies they advanced than those promulgated by Turnbull and some of his senior ministers. That letter is immediately below.

Liberal Woes are Opening the Door for Minor Parties

Letter Published in The Australian, 7 Aug 2018 (Bits in square brackets excluded by Ed)

[You draw attention to the failure of Turnbull and some of his senior minister to offer any explanation of the Coalition’s failure in the by-elections and to provide only limited explanations of its future policies on major issues such as immigration and energy]. Your editorial suggests that “last weekend must count as one of the final warnings” (“Coalition goes missing in urgent policy conversation” 4/8).

By contrast, attendees at the week-end’s conference of the Samuel Griffith Society in Brisbane heard excellent speeches on potential future policies by Campbell Newman, Tony Abbott and Peter Dutton. It was hard not to think that a major change in the Coalition team is essential if it is to have a chance of winning the next election.

One key policy change required is in the NEG. It is alarming to hear that Environment Minister Josh Frydenberg thinks more competition will come from the government providing “support for dispatchable new generation that supplies large commercial and industrial users” [(“ Competition the key to NEG-plus”, 3/8)]. How? Equally alarming is the claim that NEG would result in average electricity bills about $550 a year lower. Will NEG-plus mean even lower bills?

Des Moore, South Yarra

The Australian has also published an article by climate expert Ian Plimer who argues

“We are in an electricity crisis because we are trying to decrease human emissions of carbon dioxide and have tied climate policy and electricity generation costs to emissions. A reality check is needed. Even if human-induced global warming could be shown, a reduction in Australian emissions, comprising 1.3 per cent of global annual emissions, is dwarfed by annual increases of 2 per cent globally and 4 per cent by China. Australia’s symbolic suicidal climate policy just makes everybody poorer. We face further turnover of prime ministers and governments until the costs and reliability of electricity are addressed and until the fundamentalist religious mantra that emissions drive global warming is rejected.(see Plimer Says Australia’s Climate Policy Suicidal)

As we approach the meeting with the states on Friday, we still have a failure by Turnbull/Frydenberg to explain and justify the NEG policy, except that it constitutes advice from “experts” (but not anyone of Plimer’s ability). I attach as a reminder a Commentary which I circulated on 21 July (see Some Realities Not Faced Under Proposed NEG).

Questioning Continues Regarding Effects on Pricing under NEG

Des Moore — Fri, 27 Jul 2018 12:49:53 +0000

Questioning Continues Regarding Effects on Pricing Under NEG

Today’s Australian reports that the views of three groups in the Senate appear to depend on whether and/or by how much the supposed final version of NEG will reduce costs. Pauline Hanson says she is “strongly against” the NEG and wants to pull out of the Paris accord requiring reduced carbon emissions as coal-fired power stations would deliver cheaper power. Senator Leyonhjelm, the Liberal Democrat, said he wanted to see evidence the NEG would dramatically lower power prices before he would back the deal: “they need to fall by at least 50 per cent to restore competitiveness and take pressure off households”. The Centre Alliance’s Rex Patrick said he and Senate colleague Stirling Griff backed the NEG’s goals but their vote would depend on how much the policy brought down power bills: “we would expect on the pricing side for there to be a clear indication of what the savings will be, and that the modelling that generates those savings is released publicly, including all assumptions that were made,” Senator Patrick said (see Some Senate Opposition to NEG).

Given the virtually certain Labor opposition to NEG, this means the government would find it difficult to have it passed in the Senate.

Both The Australian and the AFR have also published letters expressing doubts about the cost effects of NEG. My letters in each of these papers are set out below.

It’s Difficult to See How Wind Will Bring Down Prices

Letter Published in The Australian, 27 July (Last para deleted by Ed)

You report the Energy Security Board’s claim that modeling of the final national energy guarantee shows that its adoption would result in savings of electricity bill to households of $550 a year over a decade (“Power price warning to Labor states”, 26/7)

Indeed it appears that under this NEG, wholesale prices are modeled to fall by over 40 per cent by 2021. A significant contributor to this fall is supposedly due to a large increase in investments in renewable (mainly wind)already committed.

However, no indication is given of how the more costly wind farms will cause such falls in prices. Perhaps the NEG will provide a government guaranteed price, with governments funding the additional cost compared with coal. That additional cost would have to include the additional investment in back-ups which would be needed when the wind or sun do not provide fuel.

[The debate surrounding NEG has reached the point of farce. Some ‘expert’ (sic) has a model which says a more costly investment in energy production will compete coal producers out of existence despite the latter’s much lower prices. Will anyone believe in such a model?]

Des Moore

Something Doesn’t Add Up in Energy Modeling

Letter published in AFR, 27 July 201

You report the Energy Security Board’s claim that modeling of the “final” NEG shows that its adoption would result in large savings of electricity bills to households. Indeed it appears that under this NEG, wholesale prices are modeled to fall by more than 40 per cent by 2021. A big contributor to this fall is supposedly due to a large increase in investments in renewable (mainly wind) which are already committed.

However, no indication is given of how the more costly wind farms will cause such falls in prices. Perhaps the NEG will provide a government guaranteed price, with governments funding the additional cost compared with coal. That additional cost would have to include of course the additional investment in back-ups which would be needed when the wind or sun do not provide fuel.

Those who have followed the debate on NEG will be interested to ascertain how a more costly investment is modeled to produce lower prices

Des Moore, South Yarra

Stone Criticises Paul Kelly’s Views on Trump

Although not directly related to climate change policy, John Stone has an article in today’s Spectator which takes to task Paul Kelly’s view on Trump (see Stone’s Critique of Paul Kelly on Trump). Stone rightly says that Kelly has conveyed a false perspective on Trump and that this perspective has wrongly influenced Australian conservatives and their attacks on government policies.

One of the issues on which Stone criticizes Kelly is climate change and Trump’s withdrawal from the Paris accord. Kelly argues that it has been an elemental mistake by our conservatives to wish that our government follow suit because “they forget what Trump’s alternative and incoherent ‘big picture’ means for America and the world”. But, in fact, Stone says, Americans “see Trump’s actions (as having) already transformed America into a far better place than that to which Barack Obama and his immediate three predecessors had reduced it.”

Such criticisms also apply to all too many other Australian journalists and their failure to see through government policies which purport to improve our lifestyle but in practice make us worse off unnecessarily . This is very much the case with climate change and the cost of government policies designed to reduce our usage of fossil fuels.