Institute for Private Enterprise » NEG

An Early Election?

Des Moore — Sat, 08 Dec 2018 21:47:38 +0000

An Early Election?

In Thursday’s Commentary I referred to the view of The Australian’s political editor (Dennis Shanahan) that Morrison still has a “last chance” of winning the election. In Weekend Australian Shanahan acknowledges that “the Liberal Party is in a mess” but also points out that “Labor finished the last week of parliament for the year on the back foot over national security and border protection, giving Morrison a reprieve from the dismal Liberal outlook. The Prime Minister was able to declare there would be a budget surplus next year, he changed Liberal leadership rules, intervened to stop a preselection brawl, asserted his authority over Turnbull and avoided an embarrassing defeat on the floor of parliament” (see Shanahan Says Morrison Has a Reprieve).

It is pertinent that Shorten has a three day national conference starting on 16 December for which he has already conceded a chink in border protection policy by supporting watered-down immigration rules that would hand doctors the power to relocate “medically-needy” (sic) refugees to Australia (see Benson on Labor’s Softening of Border Policy). He may be under pressure at that conference to make some further softening from the left in Labor.

Given that Morrison played a leading role in “stopping the boats” when working as a minister under the Abbott government, any such softenings provide Morrison with an opportunity to further attack Shorten and, more generally, to emphasise the risk of a Labor government. Interestingly, the Italian government has announced that Italy will not sign the UN’s Global Compact on Migration (the Morrison government has also refused to sign) and the Italian Parliament has approved (396 to 99) what is described as a tough new immigration and security law that will make it easier to deport migrants who commit crimes and strip those convicted of terrorism of their Italian citizenship. Morrison has already seen the “attack Shorten opportunity” in an article published in Friday’s OZ in which he accuses Shorten of “incrementally dismantling the government’s successful border protection policies”.

Also pertinent is Labor’s climate change policy of a 45% reduction in emissions and 50% increase in renewable by 2030. This provides a basis for Morrison to attack its much higher economic cost (including higher electricity prices) than the Coalition’s policy adopted under Turnbull, which provides for a 26-28% reduction in emissions by 2030 and a 23.5% increase in renewable by 2020.The Coalition has also dropped the (unworkable) NEG “formula” approved under Turnbull and which Labor has now indicated that it may use.

Further, now that Turnbull seems to have lost his position as a self-appointed adviser, there should be scope to reduce Coalition targets on the basis, first, that Labor has energy policies which are highly damaging economically and will cause higher electricity prices, second, that it has reviewed policies made while Turnbull was PM and will make adjustments which bring Australia’s policies more in line with those being pursued by other countries and, third, that the emissions targets set in Paris in 2015 do not seem to be being followed. In fact the estimate for 2018 shows an increase of 2.7% in world emissions and initial reports from the current IPCC conference being held in Poland suggest that China and India are seeking to exempt themselves from making reports on what their emissions actually are.

In his article in Weekend Australian Chris Kenny points out that the protesters openly calling for action to reduce emissions fail to recognise the extent of action which has actually been taken by Australia and “which has elevated our energy costs and contributed to job losses and economic dislocation, and delivered no environmental benefit because global emissions continue to rise substantially”. He rightly points out that “when students call for ‘action’ they mean they want additional action: on top of the Kyoto targets, Paris commitments, the renewable energy target, solar subsidies, battery subsidies, light globe laws, renewable energy grants, Snowy Hydro 2.0 and direction action projects. When they protest in the streets their teachers, parents and many politicians cheer them rather than inform them”.

The publication by the Morrison government of an assessment showing that Australia has already taken much more action than almost all other countries would help justify adjustments to existing policies and at the same time put the Coalition in a position where it could point out that Labor’s policy would further widen the economic cost compared with other countries and would significantly reduce Australia’s international competitiveness. Kenny notes that, ”in interviews this week, I asked a protester’s parent and Richard Denniss of green-left think tank the Australia Institute if they could name a country that was doing more on climate action at greater economic cost than Australia. Neither gave me an answer”.

Apart from the foregoing differences with Labor, Morrison also has scope to point to the improvement in the federal government’s budgetary position which will be published in the normal Mid-Year Economic and Fiscal Outlook sometime this month and which Treasurer Frydenberg has already indicated will (at last) show a surplus, possibly this financial year. It will also doubtless include a (justifiable) claim that Australia is performing better economically than other OECD countries. Labor will find it difficult to counter these claims, particularly as it has already indicated that if elected it will increase taxes by lifting the marginal tax rate from 47 to 49 per cent, ceasing negative gearing provisions and not reducing taxes on “big businesses”.

The foregoing has led Terry McCrann to suggest that an earlier election than May would be justified. An election in March would “lock in” the favourable budgetary and economic forecasts in the MYEFO publication and prevent any significant change in the Pre-Election Economic and Fiscal Outlook (PEFO) which would be made by Treasury before the election (see McCrann Suggests Early Election). By contrast, a May election could suffer from any slow-down in the economic/budgetary outlook, which many forecasters are predicting following the “weak” economic figures just published for the September quarter.

An early election would run the risk that the Morrison government would be portrayed as a “cut and run” attempt at winning and avoiding outstanding issues. But it would have the potential of bringing the Liberal party closer together as well as taking advantage of the issues mentioned above on which Morrison seems to be ahead of Shorten, including of course the absence or near absence of Turnbull as a policy maker. If Morrison can perform as well as he did in the last week of Parliament, an early election could prove a last chance winner.

How to Save the Coalition

wpadmin — Thu, 29 Nov 2018 06:30:38 +0000

Last Sunday I tried to explain in my Commentary why the Coalition lost the Victorian election with such an unexpectedly large swing to Labor (I then thought it was a 5% swing but it now appears closer to 6%) and this loss was immediately followed by a Newspoll showing at the federal level that Labor is ahead on a TPP basis of 55/45. While this is the same as in the previous Newspoll, and Morrison’s personal rating as Better PM actually improved to 46/34, it confirmed that the Coalition would almost certainly lose the Federal election, which Morrison has now set for March. I concluded my Commentary by saying that “whether at the federal or state levels this result is a reflection of the failure of the Liberals to distinguish themselves from Labor”.

There is no doubt that this failure largely reflects the views of Turnbull, who first tried to be head Labor but was rejected there and, despite his leftish views, was accepted as a member of the Liberals. Then, after his second period as leader and then obtaining the PM position since 2015 after defeating Tony Abbott in an internal challenge, Turnbull himself was defeated in a internal contest by Morrison in August which actually arose from a challenge to Turnbull by Dutton. In effect, that challenge indicated that a majority of the party had reached the conclusion that, after a sequence of negative polling throughout his PM-ship, Turnbull’s views would not be accepted by the electorate at the federal election.

I have written in previous Commentary that since taking over Morrison has either not outlined his views on most major policy issues or outlined them only half-heartedly. This has kept the Coalition’s polling at low rates and uncertainty about what the Coalition stands for. Moreover, Turnbull continues to attempt to influence policies and individual MP’s attitudes on particular issues. This has led to suggestions that he should be expelled from the party and there appears to be a basis for doing that (see Turnbull to be Expelled? and Turnbull v Liberal Party). As Andrew Bolt argues, “It’s not just that Turnbull is angry with the Liberals for doing, in his opinion, the wrong thing in dumping him. Psychologically he badly needs the Liberals to now lose to prove to himself that he was right and good and loved (see Bolt on Liberal Party & Turnbull).

It appears however that Morrison has now realised that, for the Coalition to defeat Labor under Shorten, he must return to emphasising the traditional important elements in an election, such as the budget (see attached Morrison v Shorten). As David Uren points out, “the Coalition managed to restrain spending under the tight rein of finance minister Mathias Cormann with growth of about 2 per cent above inflation, despite the rollout of the National Disability Insurance Scheme and increased defence spending. The revenue turnaround began in the second half of last year and has gathered pace. Company tax revenue was boosted by a surprise leap in coal and iron ore prices while business profits elsewhere in the economy strengthened. Deloitte Access Economics tips company taxes will reach almost $100bn this year. Capital gains tax revenue is also coming back. Treasury now finds its forecasts are unduly pessimistic” (see Budget Outlook).

However, for Morrison to improve polling and stand a chance at next year’s election he must do two things:

Make a public statement saying that, while he recognises that Turnbull attempted to attract votes through the policies he pursued, he is no longer PM and those policies need to adjusted to the new political environment;
Indicate also that an energy policy based on NEG is no longer acceptable (Morrison has already stated this) and that the Morrison government will modify its emissions/renewables polices so as to ensure that it establishes a situation where electricity prices will fall.

But at the moment it looks highly unlikely that he will make the necessary changes to energy policy to allow prices to fall. As pointed out by David Uren the policy apparently being pursued for consideration by party members next week reflects “surely none as bewildering as a Coalition leadership deciding the solution is to give the Treasurer unfettered powers to force the break-up of private corporations, dictate their prices and order them to enter contracts against their will” (see Uren on Energy Policy). This would be a disaster in effecting the de-facto nationalization of the electricity industry and as such would likely lead to lower polling.

One final word. The attempt by some female politicians in Canberra, including one minister, to suggest that the Liberal Party is treating women badly does not stand up to careful consideration. Their failure to nominate any supposed offenders indicates the accusers have allowed themselves to be unduly influenced by the emergence of increased feminism. They also appear to overlook that politics involves exchanges which will, in some cases, cause offence – as it does with exchanges between men (see also Bolt on Liberals Problems on Women)

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 Fails to Get Over It

Des Moore — Thu, 13 Sep 2018 13:01:06 +0000

Morrison Fails to Get Over It

In yesterday’s editorial The Australian concluded by saying that “at some stage we need a serious debate about what we are doing and why” on energy policy (see OZ Editorial on Energy Policy, 12/9). Also yesterday Morrison answered Shorten’s question in the House about why Turnbull has been sacked by telling him to “get over it”. But he is the one who needs to “get over it” – the “it” being Turnbull, who is reportedly still busy from New York telling colleagues to have Dutton’s eligibility to be a minister tested in the High Court. Morrison had no real option but to reject this proposal.

The trouble is that Morrison has made no attempt to explain Turnbull’s abandonment and, what’s more, it is difficult to see any substantive difference between the energy policy announced so far and that followed under the Turnbull government. In fact, while Morrison has drawn attention to areas which require policy attention neglected under Turnbull, such as industrial relations and banking, he has given no indication as to what he might have in mind.

True, he continues off and on to say the number one priority is to reduce power prices. But yesterday he made the absurd statement that Australia has to adopt climate change policies supported by Pacific Islands (a well known regular attempt to get more aid but which would not benefit from the changes sought). Today he is reported as assuring two backbenchers that he will not dump renewable energy targets (see Morrison Endorses Renewable (13/9).

Further, Morrison’s abandonment of the NEG policy, and the legislation embracing the Paris agreement to reduce carbon emissions, do not themselves reduce power prices. The policy that seems to have replaced Paris still involves the same reduction in emissions and the target for renewable is retained. Both of these increase costs once the required additional back-ups are taken into account.

Some reduction may be achieved through possible operative reforms of the energy market as suggested in the ACCC report. But the reported rise in prices in the futures market since the abandonment of NEG suggests downward pressures would have minimal effect. Unless the new government adopts a credible energy policy its Newspoll will be stuck at an unelectable level.

As National Political Editor James Campbell points out in today’s Herald Sun, if the polling booths repeat anything like the Newspoll of a Coalition primary vote of only 34 per cent (Labor 42 per cent), that would slaughter the government (see Campbell on Morrison(13/9). He argues that the Coalition has no chance of winning unless its primary vote is above 40 per cent.

Today’s article by Chris Kenny (who has experience working in a minister’s office) identifies a number of problems areas, viz

“The change in style is everything to Scott Morrison. And this looms as a strategic mistake because he needs to reshape the substance as well”.
“The new leader couldn’t resist the temptation to remake the Coalition in his own image, looking to neutralise most areas of conflict with Labor”.
“Turnbull lost the leadership because he had taken the party to the left, so Morrison needs to show he is taking it back to the mainstream right-of-centre where it belongs. Climate and energy policy is key”.
” 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”.
” 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”.
”If Morrison runs a version of the Turnbull government, only with an approachable and down-to-earth style, he won’t implode but he won’t win. If he backs that up with a few substantial measures demonstrating his government is firmly rooted in mainstream Coalition territory, winning won’t be out of the question.

Coalition Goes Backward Under Morrison

Des Moore — Mon, 10 Sep 2018 12:13:45 +0000

Newspoll Confirms Morrison Failure

One might have thought that the second Newspoll after the election of Scott Morrison as PM would produce something of a lift since the one published a fortnight ago on 27 August. That showed the Coalition on a TPP of 44/56 (and a primary vote of only 33) after Turnbull was dismissed on 24 August. But now we have on 10 September the same TPP for the Coalition and only a one percentage point lift in its primary vote – but, and for Labor too.

The Australian headlines this as “PM offers hope but rout looms” and editorialises that “provided Liberal MPs are prepared to put the national interest ahead of internal gripes, Scott Morrison has a fighting chance of leading the Coalition out of its electoral malaise. Doing so will require more than a change of style and philosophy, although these factors matter. Bold policy changes that differentiate his government from the opposition are more important, along with the ability to sell them to a weary electorate and highlight the costly pitfalls of the Labor alternative” (see Oz Editorial on Morrison).

This is an improvement on the softly, softly approach adopted hitherto by The Australian. But it fails to identify the urgent need for Morrison to expose the problems he has inherited and to acknowledge that he was wrong to accept Turnbull for so long. If his expositions continue down the same path as recently, that will encourage Turnbull (and sympathetic media) to claim victory – “I succeeded in moving the Liberal Party well to the left”.

And his Deputy Frydenberg must also change his absurd exposition that he regrets having to dispose of the NEG he composed for Turnbull! This despite the fact it would have hanged a very large stone around the neck of the Liberal party. Amazingly, he told the ABC (why it?) “Well, no one is more disappointed than I am about ” having to dispose of NEG. Even leaving aside the stone, his claim that it passed through the party room thrice suggests it is still OK. Yet the decision to kill it off has not been through that room but was presumably taken by the Morrison/Frydenberg clique!! (see Strewth) And it still leaves an unworkable policy.

Nor has the party room approved the new energy policy announced by Morrison (and presumably approved by Frydenberg). Properly analysed, this policy is worse than the NEG compiled by Frydenberg with Turnbull’s approval. It is not surprising that Labor is saying that it might adopt NEG or a version of it. Morrison also has a Cabinet which John Stone described in last Friday’s Spectator as “little changed in orientation from its predecessor” (text of Stone is attached to my Commentary of 8 September on my web www.ipe.net.au).

In considering voters assessments of the “Most Important Issues”, Newspoll displays the following, viz

Energy prices 22

Hospital and aged care 21

Assistance to farmers 21

The Budget Deficit 16

National Security/Refugees 11

School Funding 5

Uncommitted 4

By comparison, in today’s Herald Sun Andrew Bolt presents more immediate priorities to which Morrison should have regard, viz

“MORRISON’S NO-BUT-YES WILL DESTROY THE LIBERALS

Scott Morrison and Josh Frydenberg are giving a lot of no-but-yes waffle.

No, they won’t cut emissions rather than cut electricity prices, but, yes, they want emission targets and will stick with the Paris Agreement.

No, the Paris Agreement emissions targets don’t cost us, but, yes, Labor’s targets will.

No, Energy Minister Angus Taylor says he won’t back green schemes that cost plenty but don’t cut the temperature, but, yes, he’ll keep funding lots more renewable energy.

No, the answer to this (unspecified) bullying of Liberal women is not quotas for female MPs, but, yes, the Liberals need more of them.

No, Morrison won’t fight culture wars, but, yes, he thinks we need more religious freedom.

No, Morrison doesn’t think we should cut immigration, but, yes, there is a problem.

No, this new leadership isn’t a change from Turnbull, but, yes, Morrison said will be different “points of emphasis“.

The Liberals desperately need a clear new direction, but their new leaders seem too scared to give one. The Liberal Left would revolt.

Conclusion: unless this changes fast, the Liberals simply cannot fight for what most conservatives want. They are not fit for service.

So now what?”

PS The failure of Liberal Party leadership is not confined to the Federal Party. The dramatic loss of votes in the NSW by-election in Wagga Wagga, and the almost certain loss of the seat, exposes deficiencies in the NSW leadership too (see NSW Loses Wagga). The Liberal Coalition in Victoria will also suffer in the imminent November election.

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

More Ridiculing of Turnbull’s Policies 18/8

Des Moore — Sat, 18 Aug 2018 05:40:50 +0000

For Now Dutton Stays Loyal to Turnbull, But …

Commenting on this morning’s media speculation that he might challenge Turnbull for PM, Peter Dutton said “In relation to media stories today, just to make very clear, the Prime Minister has my support and I support the policies of the Government. My position hasn’t changed from my comments last Thursday.” (see Dutton Says Supports Turnbull). That of course is a short time ago and he has also said that, while in Cabinet, he is bound to support government policy.

The outstanding question is whether Turnbull’s responses to the critiques of (in particular) NEG are being accepted as providing satisfactory answers. If not, then Dutton and one or two others could resign from being ministers and, with at least 10 rebels also, Turnbull would be in a position from which he would find it virtually impossible to govern.

Reports indicate that, in addition to Turnbull’s initial “concession” of removing any legislative requirement to reduce emissions by 26% by 2030 (but retain it as a policy), he may be developing a scheme or schemes which would supplement what is in the draft NEG legislation. Astonishingly, that legislation has only been released to Labor and this was done last Wednesday.

As mentioned in yesterday’s Commentary, the main supplementary focus is on controlling prices. As shown in the graph attached to my last Commentary, there has already been a further doubling or trebling since 2011 under policies which would be adopted under NEG. But (importantly) the Turnbull/Frydenberg clique, now supplemented with help from Treasurer Scott Morrison, would need to show how their frequent promises to get lower prices under NEG could be achieved.

In reality, in what is a powerful critique of Turnbull’s policies generally, Terry McCrann’s analysis below suggests that under NEG it is virtually impossible to deliver lower prices. He points out that, to meet the additional renewable target, there will need to be considerable additional investment in generation backups to cover the periods when the wind doesn’t blow. That in turn must add to generation costs, including for the renewable certificates which have to be purchased by retailers. Unless some method of hiding the adverse effects on the Budget, prices paid by consumers would increase further.

Comments by climate expert Alan Moran (see Moran on Turnbull) also suggests that

“To rescue the situation, Turnbull is pretending to focus on prices saying “If we need to use a big stick to lower prices, we will use a big stick to lower prices”. He says he will place the policy changes within the regulations rather than the legislation itself, a measure that will further allow for the flexibility the NEG was supposed to counter. And he is now requiring regulators and the ACCC to publish the price consequences of any higher emissions target. This is utter fraud since, as we can see from countless previous modelling outcomes, the answers provided are what those paying for the model runs want, irrespective of how detached from reality these answers may be”.

It is moot as to how much longer rebels within the Coalition can wait for Turnbull to produce any meaningful answers to existing critiques. The answers so far have added to the opposition from within particularly as they come on top of dissatisfaction with his handling of other policy areas.

Last Weekend for Turnbull?

Des Moore — Fri, 17 Aug 2018 13:00:07 +0000

Chaos Reigns Supreme

I suggested in yesterday’s Commentary that Turnbull’s proposals on NEG policy (sic) have created a chaotic situation in which changes now seem to be made almost every day in an attempt to persuade rebel MP’s to re-think their opposition to the policy and avoid resignations by some Ministers. These rebels are particularly opposed to any legislation which seeks to lock in the 26 per cent reduction in emissions under the Paris accord. It should be noted that, while 10 rebels have been publicly identified, there appear to be others who are also unhappy with some of the existing NEG proposals. Former Major General Jim Molan (now a Senator), for example, told Sky News last night that he did not accept any legislation endorsing the 26 per cent reduction in emissions.

However, today’s developments suggests that the Turnbull regime is concentrating on what will happen to prices under NEG (see Turnbull Attacks Big Three Gentailers). It seems that, despite Frydenberg’s repeated claim that prices have already started to fall, senior ministers now recognise that it is no longer accepted publicly that NEG would produce lower prices. Instead, one of two promises today on policy is that action will be taken against the big generators/retailers (known as “gentailers” because they operate both generators and retailing) for ripping off consumers by unjustifiably raising prices and profits.

Ironically, these ministers claim that the very body which is supposed to ensure competition (the ACCC) should already have evidence to support taking such action and, according to Treasurer Scott Morrison, the mere warning that action may be taken will itself lead the companies to downward adjust their prices as happened with gas prices when export controls were threatened. But that seems unlikely with domestic electricity prices and there is no explanation as to why the ACCC (which recently published an extensive report on the energy “system”) has not already taken action against the companies and why it should not do so now – and immediately.

Just why these gentailers and other retailers have been able to get away with exploitative action is not clear. But the ACCC and the Turnbull government must be held responsible for the price increases which have occurred over recent years. The attached graph shows the increase in wholesale prices plus the addition to costs arising from the cost of renewable certificates which electricity suppliers have been required to pay. This shows that since around 2011 the total costs of electricity have doubled or trebled in the states, with South Australia’s increase being the highest (see Increase in Electricity Prices 2011-2018).

Thus, even before there is any NEG in operation, the regulations imposed under the renewable and emissions policies which Turnbull has operated have been the major contributors to this very large increase in costs born by consumers. As NEG legislation would continue such policies, it is virtually certain that prices will continue to increase unless controls are imposed on electricity prices, which may be under consideration (see Crowe on NEG).

But while Turnbull himself would doubtless be prepared to extend government controls on electricity prices, it seems unlikely that most of Coalition would be prepared to do so in circumstances where the general public has become more aware of the doubts about the usefulness of NEG. Now that a draft of the legislation has been passed to Labor but (amazingly) not to Coalition MPs, it is likely that those doubts will be increased.

Yesterday I referred to adverse analysis made by The Australian’s political editor Dennis Shanahan on the situation facing Turnbull. Today he winds up his piece thus

“Yet while Turnbull tries to placate MPs over prices, there is a growing, wider discontent over his political handling of energy and other issues, including his response to the by-election losses, an inability to put pressure on the ALP and the selling of the government’s tax agenda. Not enough time was spent earlier to address the concerns of the Coalition partyroom and so avoid what is now a sizeable revolt, as well as the impression of a leader being forced to capitulate to internal critics. MPs are frustrated that he did not act earlier on widespread concerns about energy prices and the advantage of being seen to embrace reliable coal-fired power. Instead, he left decisive action to the last minute and seems wedded to the idea of being the only nation to legislate Paris targets”.

Will this weekend wind up Turnbull’s Prime Ministership?

Shorten to Save Turnbull?

Des Moore — Thu, 16 Aug 2018 08:38:01 +0000

Shorten to Save Turnbull?

In today’s Australian, it is reported that attempts are being made by so called “rebel” MPs (said to be 10) to persuade some ministers to resign their positions. This would avoid the requirement that ministers vote with the government and Assistant Minister Keith Pitt is mentioned as a possible resignation (see Possible Resignations by Ministers Re Neg). He and Deputy PM McCormack had apparently proposed establishing a $5bn fund to build “at least three new power stations (presumably coal-fired) under a government-owned company model to keep the cost off the budget books”, but this was apparently rejected by the government.

It also emerged that Turnbull again held discussions with some of the rebel MPs and that the main concerns of the rebels regarded a possible price guarantee and opposition to the legislation itself. The latter is apparently judged as an attempt by Turnbull to enshrine in legislation the 26 per cent reduction in emissions by 2030 as in the Paris accord (ie implicitly Turnbull accepts that this accord could in practice be ignored).

Interestingly, the article reports that Frydenberg says that the chances of having the legislation passed are “tenuous”.

Meantime, Andrew Bolt actually lists the 10 rebels who have reserved their right to cross the floor and vote against “this global warming scheme that even Labor says it could vote for”. Although there is no indication as yet of Labor doing a deal with Turnbull, it would not be surprising if he agreed to some modification of his legislation on that basis (say to allow an amendment moved by Labor to raise the 26%). Relevant here is that the union movement is saying that Labor should support NEG. But if the legislation did pass on that basis, it would seem unlikely that the rebels remained as members of the Coalition.

We are now in a chaotic situation where attempts will be made by both sides to do “deals”. But whatever happens will not be of concern to Turnbull as he will have achieved one of his objectives viz undermine the Liberal Party. The only hope of stopping this is if the majority of Coalition ministers either resigns or votes to change PMs.

Turnbull Must Go Now

Des Moore — Mon, 13 Aug 2018 10:18:36 +0000

The combination of today’s Newspoll (another 49/51 TPP result for the Coalition) and the utter failure of the Turnbull government to come forward with a meaningful energy policy demands that tomorrow’s party room meeting vote for a change of leader. Turnbull has had his (second) chance 38 times and must go now even if that forces an election before Christmas.

In fact, that would give the new leader a chance to put together a Cabinet which comprises members who have a better understanding of the policies Australia needs. And to bring back some voters who have moved to prefer One Nation (up from seven to nine percentage points) or one of the other groups (up from eight to nine). A clean sweep is required.

The failure after two years to develop a meaningful energy policy even now demonstrates the inability of the present leader to depart from his Labor-lite approach to governing. Yet another poll shows 63 per cent give priority to keeping prices down and only 26 per cent give priority to meeting targets to cut greenhouse gas emissions Despite this potential election winner it is only in the last few days that the electorate been told that the new policy would include the underwriting by the government of investment in electricity generation that would, magically, ensure lower prices. But nobody knows how much of such investment or how much prices would fall! Suffice to say here that it is consistent with the Turnbull view of government, not with private enterprise view supposed to be the aim of the Liberal party.

The National Editor of The Australian, Simon Benson, has well summarized the situation in his opening sentences, viz

“The Turnbull government lacks policy coherence, party unity and remains crippled by a failure of political management. The consensus is that it is sleepwalking to likely defeat. The critical message from the electorate is this: the relative popularity of both leaders, or lack of it, is no longer the key driver of votes”.

But Andrew Bolt has probably put it best below.

Liberal MPs need to reject Turnbull’s ‘stupid’ scheme, writes Andrew Bolt

Andrew Bolt, Herald Sun, August 12, 2018 8:32pm

“ATTENTION Liberal MPs. Tomorrow is when you start fighting or slouch to defeat. It’s when you stand against idiocy or be forever damned as sheep.
Tomorrow is when Prime Minister Malcolm Turnbull calls a party-room meeting to tell you what you will do about the National Energy Guarantee.
But it must be the day when you turn the tables and say: enough.

Say no to this futile, pointless and expensive con — a global-warming scheme to cut emissions that this government pretends is a scheme to cut electricity prices instead.

Dear Liberals, no one buys that spin. We know your scheme has targets for cutting emissions but none for cutting prices.

And no matter how brilliantly the Prime Minister thinks his government is playing the politics of your NEG — an acronym and plan not one in a 1000 voters understands — you and I know the truth.

Voters are telling every pollster they are furious about soaring electricity prices. Expecting them to admire your NEG is like expecting an AFL Grand Final crowd to clap you for staging a game of tennis, instead.

What on earth are you thinking? Even if this scheme made sense, it would not cut prices this side of next year’s election. You’d just be telling voters to trust you to cut prices when they have no reason to.

At best, you’d simply create a global-warming scheme that the new Labor government will thank you for — and hang around your neck as one you wanted, too.
How does that make political sense?

But let’s now talk about the national interest.
Ask yourselves: why are you pushing a scheme to cut emissions when even Chief Scientist Alan Finkel, himself a warmist, admits we are so small that the difference any cuts would make to the climate is “virtually nothing”?

Why you are so determined to cut emissions when there has been next to no warming this century?
Why are you so determined to cut our tiny emissions under the Paris Agreement when the world’s three giants — China, the United States and India — have either pulled out or been allowed to increase their own emissions?
How do you explain your blind commitment to a Paris Agreement that under the best estimate — by Professor Bjorn Lomborg — would cut the world’s temperature by just 0.053C by 2100 — and only if every nation met its promises, which most won’t?

How do you explain to voters why you push global-warming schemes that have helped to close nine coal-fired power stations in six years, making power prices jump?
How do you explain to pensioners who cannot now afford to heat their homes that their sacrifice is worth it even though it makes no difference to the climate?
Why are you inflicting all this pain for zero gain? None of it makes sense.

Ministers argue that they need this compromise with Labor to finally give investors the “certainty” they need to invest again in more power stations, and invest with such added confidence that they take less in profits and pass on the savings to voters.
Dear me. Such naivety.

Where is the “certainty” in a NEG that will actually make it easier for the next Labor government to demand even bigger cuts to our emissions — 50 per cent, if you please, with its Greens allies demanding 100 per cent?

Dear Liberal MPs, all this is madness and I bet almost every one of you knows it. So why go along with it?

Some of you tell me you must, because rejecting this NEG would undermine your Prime Minister, Malcolm Turnbull, a global-warming fanatic.

Despite surviving negotiations in Friday’s COAG meeting, the government’s National Energy Guarantee will face its next big test in the Coalition party room on Tuesday. A number of MPs have indicated they are willing to cross the floor over the contentious legislation. Shadow Energy Minister Mark Butler blames disunity in the Coalition for stalled energy talks.

But how can you undermine a dead man? I write this without knowing the results of today’s Newspoll, but you all know the weight of evidence suggests you have lost the election already.

You must change course.

If Turnbull can’t sell the kind of new policy you need — cutting electricity prices, not emissions — then find yourself a new leader who can. And if you lose the election anyway, at least you’ll be in better shape to fight the next.

You can say “I told you so” as Labor makes power prices even worse. But in the end, the choice is basic: did you really get into politics to make Australians suffer for nothing?

Please, this is the time for serious Liberal men and women to say no to stupidity. Just because everyone around you has lost their head is no reason for you to lose your own”.