Institute for Private Enterprise » The Age

Ispos Poll Shows Big Improvement in Coaliton Polling

Des Moore — Mon, 18 Feb 2019 08:57:19 +0000

Has the Tide Really Turned?

Today’s polling, not by NewspolI but by Ispos for Fairfax press, must have come as a bit of a surprise to those associates with that media group, as it also has for those supporting the Coalition. Most of the latter have been expecting an improvement in the Morrison government’s polling from the 46/54 TPP result last December but not by three percentage points to a 49/51 TPP. That is close enough to the election result in July 2016 under Turnbull (50.4/49.6) to lead the Fairfax media (and the ABC) to downplay it as much as they can.

But they also find it difficult to explain away the two percentage point increase in Morrison’s performance rate since December which means he is now a nine percentage points better performer than Shorten (49/40) and ten percentage points more preferred than Shorten as PM. (Strangely, Ispos have asked to interview me tomorrow morning, to which I have agreed).

Of course, this polling may be only a “one off” and we have to wait until the next Newspoll (which is probably next Monday) to see if it also shows a big improvement in the Coalition’s electoral hopes. But there can be no doubt that this poll provides a major “scare” to Shorten and Labor. Even the leftish political editor of the Fin Review has had to acknowledge this (see Coorey Says Test of Nerve For Labor). Note his comment on last week’s debate on whether to allow “exceptions” to border controls, viz

“There was a great deal of trepidation within the party last week over whether it had done the right thing by opening the door on boats, an entrenched political weakness which has cost it at least two elections this century”.

As I argued in last Friday’s Commentary, “Morrison’s attack on Shorten for showing weakness in handling Caucus is obviously correct (as the emergence of Deputy Albanese on TV suggests) and provides a useful stick for Morrison to use and argue that, if Labor were to win the election, they would again allow border controls to be breached. Morrison has already established that up to 300 refugees have obtained the approval of doctors to be transferred to Australia. It seems likely that under Labor border controls would be eased and smugglers would again penetrate access in one way or another”.

It is not only the AFR which is having to pull its horns in. As Andrew Bolt points out in his article in today’s Herald Sun:

“So how to stop them? Labor’s media shills offer two fixes. First, suggests The Age: “The turnback policy is cited by experts and insiders as the most effective deterrent … It would be prudent to buttress this barrier.” Pardon? Turning back boats is the Tony Abbott policy which The Age was still damning in 2015 as “morally repugnant”, and “ruthless and despicable”. It’s a policy many on Labor’s Left still hate. So why did turnbacks go from “morally repugnant” to something The Age wants more of? Why? Because The Age knows Labor has put sugar on the table for the people smugglers, and if boats now turn up it could lose the unlosable election. That’s why many Leftist journalists also insist Prime Minister Scott Morrison stop saying Labor has weakened our borders. He’s giving people smugglers ideas, they say. Guardian Australia’s Murphy even accused Morrison of “looking like you are whistling up new boats for a bit of cheap partisan advantage”.

Many leftist journalists insist Prime Minister Scott Morrison stop saying the policy has weakened Australia’s borders. How crazy. The Liberals now can’t inform voters that Labor’s policy is dangerous? And how dumb do journalists think the bosses of those multimillion-dollar people smuggling cartels are? They don’t need Morrison to tell them what Labor has done — especially not with activists celebrating at high decibels” (see Bolt on Fairfax Support for Labor).

Bolt’s article today would have been written before the editorial in today’s Age, which has done some backtracking even to acknowledging with mixed views that “There is, however, a legitimate issue for this election about whether the ALP is the better party to manage asylum seekers. The left of the party has only accepted Mr Shorten’s approach with great reluctance”. The Age adds that it “reported from Indonesia on Saturday that asylum seekers stranded there since 2013 said the bill had not made them more inclined to take the risk of boarding boats, but one source, long known to this organisation for having links to people smuggler networks, said that if the ALP won government, Mr Shorten could face a test of his nerve”. But it then makes the astonishing addition that there is no reason why the ALP cannot face down the challenge from people smugglers just as resolutely as the Coalition, apparently forgetting what happened to attempts to control borders under the Rudd/Gillard/Rudd governments! (see the full text of today’s Age editorial, which should surely lead to a change in editor of a paper which claims it is “independent always”).

Of course, the asylum seeker issue is only one of several explanations for the narrowing of Shorten’s lead in the polls.As today’s Age also acknowledges, Shorten “may also be suffering from some of his tax policies. Many voters, including, surprisingly, 30 per cent of ALP voters, are worried about his plans to end cash refunds of franking credits. Still, it is the issue of asylum seekers that appears to be weighing most heavily on the electorate. To maintain his lead, Mr Shorten will have to prove his mettle both to voters here and also to those waiting in Indonesia for a sign of weakness”.

As electorally beneficial as the border control issue is likely to be, Morrison can’t rely only on using that as a stick to beat Shorten with. Other policies need to be finalized and presented, including the budget before the election.

Morrison Changes CChange Policy

Des Moore — Sat, 22 Dec 2018 07:04:00 +0000

A Breakthrough on CChange Policy?

It would be premature to claim a breakthrough in the Morrison government’s climate change policy. But a potential starting point may have been made with its decision to count carried-over emissions credits from under the first and second Kyoto agreements to help meet the 2030 target of a 26% reduction in carbon emissions set by Turnbull in Paris. What this seems to mean is that energy section emissions will now have to fall by only 17 per cent, while transport and agriculture emissions are actually forecast to continue rising until at least 2030.

In total, Australia’s carbon emissions in 2030 would be only 7% lower than in 2005 but this would be in accord with the 26% lower target. That will still require further reductions in emissions between now and 2030 but much less than if the 26% reduction was followed. If Morrison sticks with this “new” policy, the Coalition would be in a much better position to contrast its policy with the 45% reduction adopted by Labor for 2030.

In particular, it will give the Coalition scope to argue that its policy will have a relatively small adverse affect on the economy/international competitiveness compared with Labor’s policy. Although Labor has not said it will not use credits, Labor spokesman Butler commented that “It is clear the Liberals are burying their heads in the sand and ignoring the vast majority of Australians who are crying out for desperate action on climate change”. This suggests it will stick with its 45% reduction policy (see Morrison Uses Carbon Credits to Meet Target).

Of course, it would be much better if Morrison were to indicate that Australia will now not make any further emissions reductions, which it appears to have done in regard to transport and agriculture. There is an implicit acknowledgement here that those industries should not suffer any adverse economic effects. So, why not go the whole hog?

OZ Attitude on CC Also Seems More Flexible

Today’s Australian also seems to adopted a more flexible approach to CC policy. It does this in three ways.

First, it has published more letters which mostly question the science (sic) used to justify emissions reduction policies (see OZ Letters Complain on CChange “Science”). These included my letter as follows

A Failure to Explain Climate-change Link with CO2

Letter Published in The Australian on 22 December (Ed Deletions in Square Brackets)

You correctly point out that “Australia should not accept measures that would damage our economy for nugatory gains in climate mitigation” and that “too often there is a yawning gap between climate rhetoric and reality” (Editorial 21/12). [Too often too the rhetoric originates from the UN Chief you quote].

The missing reality is the failure of some climate scientists and politicians to examine whether the predicted effects of climate changes actually happen. [Yet ]since the year 2000, temporary increases aside, global temperatures have been relatively stable despite the strong increase in carbon emissions staying in the atmosphere. Temperatures also remained stable in the post WW2 period to the late 1970s in the face of increasing emissions. Where is the explanation of the apparent lack of a correlation between increases in carbon emissions and temperatures, which the rhetoricians claim?

This unanswered question suggests the [danger] threat from usage of fossil fuels has lost credibility and policies aimed at reducing emissions should be re-examined . Australian governments should not continue policies to reduce emissions unless climate scientists can explain the periods of relative price stability in the face of increasing emissions. As Doug Hurst wrote yesterday, “the best Christmas present we could give ourselves would be to accept reality and cancel our futile and wasteful renewables policies”.

Des Moore, South Yarra, Vic

Second, it supports the adoption by Morrison of past carbon credits as part of its policy of reducing emissions by 26% by 2030. This is an acknowledgement by The Australian that it does not see the need for Australia to adopt such a large reduction adopted under Turnbull. Even the Fairfax press seems to accept that it is legitimate to adopt “UN accounting rules … which are effectively turning it into a 15 per cent cut on 2005 levels” (The Age, 22/12).
Third, The Australian’s editorial says “it is reasonable to argue that by meeting its Paris commitments Australia is doing too much. It is entirely unreasonable to suggest we are not doing enough. Those who argue that global warming is a looming crisis — if they are interested in science and facts — can only conclude the crisis is escalating despite our costly efforts. Yet they argue to double down on this futility”. This again adopts a more flexible approach towards how to treat Climate Change policy in a world where it is increasingly evident that many other countries are not taking the dangerous threat seriously (see OZ Supports Use of Credits to Meet Targets).

The foregoing, together with other developments mentioned in my earlier Commentary, provides more hope that CC policies are moving in the right direction.

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

Summit, Debate on West Continues

Des Moore — Wed, 13 Jun 2018 11:58:44 +0000

Media Under-rates Summit

The media response to the Summit between Trump and Kim Jong Un has been to welcome it but express reservations because there is little of substance to date. According to The Australian, “the intentions are clear but the details are missing”; Greg Sheridan asked whether the summiteers “laboured mightily to bring forth a mouse”; and The Age asked whether it is “a game changer”. But while these are legitimate questions, as are some of the other comments (see North Korea Must not be Allowed to Deceive Again and Trump, Kim Exchange Praise at Singapore Summit), they miss the two most important points.

First, Kim has come out of the closed shell into which he and previous NK leaders put themselves to the detriment of their citizens. Now he has to face the rest of the world, and his neighbours South Korea in particular, and to improve NK’s economic and political relationships. Of course, he will still be a socialist dictatorship, but after all the publicity on NK TV there is no way he can go back to the old regime and continue to subject his citizens to dire straits because in due course he has to open his country to both emigrants and immigrants as well as allowing a much greater degree of private enterprise. And even if he does not denuclearise, he will have to stop the threats against the US and other countries and limit NK’s stockpile of nukes to those which many other countries have – and which the US and others would find it impossible to oppose as a major item of defence.

Second, even if it takes some time to develop substantive changes, Trump should be given credit for having got so far. Without his initiative, Kim might well still be in his closed shell both economically and defence-wise. To put it another way, even if no further substantive changes emerge, Trump deserves praise for bringing Kim into the open and reducing the risk of nuclear combat, which is the greatest risk facing the world. Of course, there remains the risk that Iran (which has downplayed the NK exercise) will still pose that threat and it needs to be reduced in some way. But it is possible that the NK/US summit provides a “model” which Iran will have to follow, particularly if the signatories to the Iranian nuclear deal now agree to withdraw as Trump has done or at least agree to negotiate a new deal. In a word, whichever way this develops now, Trump has further established himself as the world leader and left the Europeans further behind.

Western Civilisation Debate Continues

The latest development in this debate is that the Vice Chancellor at ANU has indicated that he would prefer not have his present salary of around $610-25 pa and will not accept his predecessor’ salary of $970-85pa. He has given no reason for this but one assumes it reflects a view about “fairness” or some other aspect of his leftish views. An incident has also developed at Melbourne University involving a contemporary dance company that divides audience along racial lines and requires whites to sign a declaration before entering the theatre. The Race Discrimination Commissioner has reacted to the effect that exempted racial discrimination in arts works!

More importantly, The Australian has published an important article by well respected Kevin Donnelly entitled “The West is lost and our unis founder in farce” (See Re: Donnelly on West). The article refers to a Boyer Lecturer, Professor Pierre Ryckmans, who recounted a story of a lecturer being attacked for talking about Chinese literati painting instead of revolutionary peasant art. As it happens, when in Canberra my wife and I met the scholarly writer and his wife and I later went a presentation given by him in Melbourne. At that presentation he argued that, for closed mind reasons which have come up in the current debate, universities should be abolished!

Note that the article refers to the number of academics opposing the Ramsay centre being established at Sydney having reached 150 (it was 100) and that the proposal is condemned as “European-supremacism writ large”.

Greens Policies & Labor’s Problem in Vic

Des Moore — Thu, 22 Mar 2018 12:29:03 +0000

Climate Change According to Greens

The Greens leader’s attempt to “explain” his party’s loss of votes in recent elections has led him down a track which could result in his displacement as leader. His response has been to bring back into public debate the extremist view of Greens that climate change causes many of the problems which society faces. On this occasion the problem is bushfires and the alleged failure of the Turnbull government to take sufficient action to reduce CO2 emissions.

This thesis has led to its ridiculing in a spate of letters (see Letters on Greens), including one by me which is below and an editorial in The Australian saying that “Senator Di Natale and his party have shown they lack the policies and expertise to make a constructive contribution to the nation” (see Editorial on Greens). Andrew Bolt goes further in describing the Greens as “vultures” andpointing out that “nothing Australia could do would make any measurable difference to temperatures. We’re just too small, making up only 1.3 per cent of the world’s emissions. What’s more, satellite data shows the world’s temperature last month was just 0.2 degrees above the average for the past 30 years. What tiny part of that tiny warming (some of it natural) could we have changed by cutting our emissions even more? And what difference would that have made to the fires? So Di Natale is either a liar or a fool, in my opinion” (see Bolt on Greens).

However, the best Turnbull could manage was to say “Look, I’m disappointed that the Greens would try to politicise an event like this. I mean this has been shocking destruction of property … Thank heaven there have been no lives lost, but that’s a great tribute to the community, to the firefighters, to all of that preparation and resilience. But this is not the time to politicise a disaster like this”. Environment Minister Frydenberg has issued no press release on the attitude of the Greens.

In fact, it is an opportunity to use exactly what The Australian and Bolt have done. But Turnbull and his ministers have so locked themselves into emissions reduction policies that they find it difficult to criticise even the green extremists – because they are adopting policies which are not all that different!

Di Natale Misses the Point on Reasons for Bushfires

(Letter Published in The Australian, 22 March, 2018. Square bracketed bits deleted by Ed)

Having lost the Batman by-election, and lost votes in the South Australian one, the Greens are desperately searching for ways to bring back voters. Hence, you report that their leader Di Natale has seized on the bushfires recently experienced to blame the federal government’s failure to address climate change and allowing conditions conducive to [hurricanes and] bushfires (“Greens fire up climate row”, 19/3).

[Instead,] he suggests, we need more usage of renewable energy, the high use of which was the main reason why Labor lost the South Australian election! That aside, [even] the last IPCC report in 2014 said its modeling concluded that “it’s likely the number of tropical cyclones will either decrease or remain essentially unchanged”.

It is highly unlikely that increased usage of renewable would lead to reduced hurricanes and bushfires. The most likely cause of the latter is the increased restrictions on clearing which Greens support and which was a [major] cause of the dreadful Tathra fires.

How Labor won the 2014 Victorian Election

It is not often that I agree with the editorials in The Age. But with the heading “ Andrews’ ALP guilty of taxpayer fraud”, today’s editorial is different in including a statement that “Premier Daniel Andrews and his government … have transgressed too often”. It is making this statement following the report by the Victorian Ombudsman on the strategy used by Labor in the 2014 election.

This involved the hiring of 5500 “volunteers”, known as the red shirts, who organised door-knocking and phone bank operations and were paid about $390,000 from 21 Labor MPs’ public accounts for staff allowances. Andrews says that this money has now been paid back from Labor funds and that this makes it all OK. But the Andrews government also spent about $1.0 mn trying, through a legal action in the High Court, to stop the Ombudsman from making her report (see further in How Andrews Won 2014 Election).

Bolt argues that this “Disgrace is too hard to swallow” (see Bolt on Labor’s win in 2014) and it is difficult to see that the government can get away with doing nothing further, even in its own interests with an election in November. One media report suggests that Attorney General Martin Pakula should fall on his own sword.

While elections have different backgrounds, this event must increase the chances of a win to the Victorian Liberals. It could also help lift the chances of the federal Coalition even under Turnbull.

SSex Marriage, Taxation & Terrorism

Des Moore — Sat, 09 Dec 2017 22:07:11 +0000

Turnbull Confirms He’s Unsuitable as Liberal Leader

Once again, Turnbull has shown that he should not be leader of the Liberal Party. His handling of the Coalition’s policy on same sex marriage failed to recognise that the plebiscite produced substantial opposition (38.4%) to legislation allowing marriage between people of the same sex and that a proportion of those who voted Yes would also have wanted any such legislation to include provisions protecting freedom to express opposition to such marriages for religious reasons alone. Other opponents not necessarily based on religion simply wanted “marriage” to remain as a relationship between a man and a woman and that, whether between relationships of the same gender or even between a man and a woman but not formally married, should be expressed as “partnerships” or in similar vein.

Far from being a “victory for Australia”, as Turnbull claimed, the passage of the legislation accentuated division amongst those in his own party and many unspoken outside it. As Paul Kelly wrote yesterday, “this is one of the greatest defeats for conservatives in many decades” (see Kelly on Protecting Religious Views). Some would see this as one of the aims of Turnbull.

The Australian’s political editor Dennis Shanahan concluded that “the cold, hard fact for Turnbull is that while the same-sex marriage legislation was passed overwhelmingly, on the issue of extra religious freedoms, which he had promised during the campaign, he was isolated from the vast majority of his Coalition colleagues. More than 80 Coalition members in both houses spoke and voted in favour of religious freedom amendments. The 61.6 per cent vote in favour of same-sex marriage in the postal survey meant it was going to become law; the remaining issue, and the focus of this week’s parliamentary debate, was religious protection” (see Shanahan on Turnbull’s Failure on Religious Protection).

Shanahan argues that, as the PM who passed same sex marriage legislation, Turnbull is “working towards improved numbers in the next Newspoll survey, the last before Christmas”. That survey, presumably on Monday 18 December, will attract more than usual interest.

True, the Turnbull government has established a review of religious freedom by a panel of four headed by former Attorney General Phillip Ruddock to report early next year. But this will be conducted in circumstances where the same sex marriage legislation has already been passed and, thus, where supporters of appropriate protective amendments will carry much less weight in the debate next year. There is also no indication that it will consider protection of critics whose views are not based on religion per se.

It is unclear when Turnbull’s “victory” will be forgotten but as PM he remains hanging on a thread.

Do Company Tax Collections Accurately Reflect Tax Liability

Against a background in which many other countries have lower company tax rates, a major lowering of Australia’s rates has been an important policy objective of the Turnbull government but, reflecting Labor’s opposition in the Senate, has been unsuccessful. On the other side, considerable attention has been given to reports that Tax Commissioner Jordan has been conducting a “crusade” against multinational companies which appear to pay taxes which are small when account is taken of their large activity in Australia. Last March, the ACTU president told the Press Club that 679 companies “pay not one cent of tax” but omitted to mention that unions pay no tax.

In the Weekend Australian, Terry McCrann suggested that, through poor public presentations, Jordan has “polluted the debate” about assessing company tax payments while his Deputy Jeremy Hirschhorn appears to be making “strong positive statements “. In a recent statement, Hirschhorn said the community should have confidence that the largest companies are being required to pay the right amount of tax on their Australian profits, and “most do so voluntarily. Australia has one of the strongest corporate tax systems in the world”.

McCrann also draws attention to Hirschhorn’s “focus on the number of groups which paid either no tax or small amount of tax relative to gross income” and, in consequence, “does notice the rubbish published in The Age and The Sydney Morning Herald and broadcast by the ABC. According to McCrann, Hirschhorn stressed three things that it was “important to remember”.

Corporate income tax is payable on profits, not gross income.
In any given year a significant percentage of even the largest companies make losses, not just for tax purposes, but also for accounting purposes.
(The data) reflects the tax returns as lodged, and does not reflect subsequent ATO compliance activity”.

This is an important assessment by McCrann and, for those interested, is worth reading in full.

Terrorism and Counterterrorism

The recent terrorist attempt at killing British PM Theresa May, and the report that over 20,000 in the UK are regarded as potential terrorists and as such are being watched, was followed here by a 20 year old being subjected to two terrorism related charges for intending to “use a firearm to shoot and kill as many people as he could in Federation Square on New Year’s Eve” The man charged had also been under watch for two year.

It was timely therefore that I was invited by AIJAC ‘s Dr Colin Rubenstein to attend a lunch last Friday at which an American expert on terrorism and counterterrorism, Dr Mark Levitt, spoke and answered questions. He is a Fellow and Director at The Washington Institute and has written extensively in a wide range of journals and newspapers.

He spent considerable time on what might happen in Syria and after the “defeat” of ISIS in Iraq. That seems to be resulting in the establishment of mini-Isis’s including in Libya, where there are now three “governments”. Part of what he had to say is reflected in a recent address he gave to a United Nations Committee on Counterterrorism (see Levitt on Terrorism & Counter). Note in particular

In the US “terrorist threats from home grown violent extremists of all ideological stripes have increased significantly”.
It is critical that preventing and countering violent extremism “address the full gamut of extremist ideologies radicalizing individuals and mobilizing them to violence”. In the United States, that means “focusing not only on Islamist ideology and narratives but also on white supremacist, far-right, and far-left ideologically inspired violence.”
“Efforts to address Islamist violent extremists will be more effective as part of a comprehensive approach that addresses other types of extremists as well”.
“ Working with local community groups is important”.

A Victory for Turnbull?

Des Moore — Sun, 22 Oct 2017 11:39:18 +0000

A Victory for Turnbull?

The week-end’s Media assessment of Turnbull’s New Energy Guarantee (NEG) is generally favourable, but withTerry McCrann predicting an extremely unfavourable outcome for the Coalition (see McCrann on NEG’s effect on Election), viz

“Malcolm Turnbull and Josh Frydenberg have made a deliberate decision to lose the next election and to lose it badly. The rest of the joint party room voted to endorse the decision, an indeterminate number of Liberal and National members voting for an early retirement. This is the irresistible and even more the irredeemable political consequence of the Turnbull-Frydenberg decision to opt for a policy of (only trying) “to keep the lights on” over a policy of significantly and quickly cutting both electricity and gas prices. Far less, the third, but first-best, option — the option, begging to be embraced by a half-rational government that had the most minimalist understanding of political dynamics — of aggressively aiming to deliver both more and more reliable power and cheaper and sustainably cheaper power”.

McCrann makes the additional interesting point that, if One Nation refuses in the 2019 federal election to give its preferences to the Coalition as it is doing in the upcoming Queensland election, “the Turnbull government will lose the election — utterly unavoidably and undeniably, even if it has managed to achieve some miraculous (and impossible to see) recovery from its terminally parlous polling position”. McCrann says that with One Nation having 20 per cent plus support in Queensland, it is remarkable that the Coalition has so far apparently judged it “inappropriate” to seek its preferences.

More cautiously, Chris Kenny reiterates that “according to all of the science and the data, the emissions reductions policies of this nation can have no impact on the global environment” and “governments who allow high power prices to reduce living standards or fail to keep the lights on will not have their mandates renewed”. Hence, “despite the neatness of the Turnbull-Frydenberg NEG plan, and the endorsements it has won from industry, it fails the test” (see Kenny on NEG). Kenny’s use of “neatness” is not consistent with an examination of the plan, which is complex and suggests a major increase in the Commonwealth government’s role in the electricity industry.

Dennis Shanahan has been critical of Turnbull (and remains so), but now says that “there is no rational reason to suggest that the Prime Minister can’t survive as Liberal leader through to the Christmas break and into a new year, with an opportunity to regain lost political ground. It is far too early to say a recovery or the foundation for a likely election victory is within his grasp, but the opposite view that he is doomed is more uncertain”. He seems to base this view on the fact that “there is no active destabilisation of his leadership. His strongest ideological opponents in cabinet are his staunchest supporters; there is no clear contender; everyone faces the same policy challenges; there is no competitive opposition leader; and there are economic green shoots”. Also that “the Coalition has finally settled on a scheme with a priority on cutting prices, not emissions, which gives Turnbull the opportunity, finally, to exploit Labor’s extravagant emissions reduction target, which threatens to put electricity prices up even further”. Shanahan rightly draws attention to the absence of anyone willing to challenge Turnbull. But it is difficult to believe that NEG would attract votes in 2019 when it doesn’t seem to start having an effect before late 2019 and requires Commonwealth legislation. Also the scheme does give weight to reducing emissions (see Shanahan Explains Why Turnbull Could Survive).

Judith Sloan says that, while there are numerous problems with the NEG as announced (including whether “central planning” ever works), government intervention in operating electricity may be a “special case”. But I can remember that, when In Treasury, “special cases” were often trotted up for government involvement. In Victoria too the SECV was for a while such a special case (read unions) that it employed many thousands more than it really needed. Leaving aside possible special cases, Sloan suggests that, to spur investment in reliable electricity, it may be feasible to operate a market in which the actual prices bid provide the basis of satisfying demand and there would then be “significant scope for wholesale prices to fall” (see Sloan on Neg).

Kerry Schott, the Chairman of the new Economic Security Board (ESB) whose establishment was recommended by the Chief Scientist, and which is supposed to play an important role in supervising the regulatory arrangements to apply under NEG, argues that prices should fall because “by providing certainty, it would encourage investment in new generating capacity and put the onus on retailers to “find the best mix of energy to meet their requirement at the lowest cost” (see Schott Says Markets Will Cause Price Falls). But one requirement under NEG would include the need to reduce emissions and hence coal-fired generators. This “certainty” would reduce investment in coal-fired generators (it already has) to a government prescribed level. Investors in renewable would also have to consider the different renewable targets set by each state and that new investors would, under new Commonwealth rules, face the cessation of new renewable after 2020. However, the fact that new renewable can still be started before 2020 with subsidies could lead to a rush in such investment before 2020.

Note that Schott says she was motivated to give up other board seats for the ESB job by a sense of national duty. “I thought the politics of this have been so bad for so long that for the good of the country it needed to be fixed” (by government!). The implication is that she and fellow board members accept the need for government action to reduce carbon emissions and that we have a key advisory board that believes in the dangerous warming system.

Jacqueline Maley of The Age (with Nick O’Malley) portrays the handling of the discussion on NEG when it was first presented by Turnbull in the party room. According to her, “member after member rose to speak on the subject, and while there were some queries, no one was critical of the policy – no small feat considering the enormous heat and hot air that has engulfed the issue over the last decade. Then, towards the end of the three-hour meeting, Tony Abbott got to his feet. “He said, ‘We need a longer time to talk about it as a political issue’,” said one MP who was present. “He wanted to delay the decision, make it look like a more tortured process than it was. He wanted to have another meeting to have a political discussion.”

According to Maley, what happened next is viewed by many within the government as a hopeful turning point for Malcolm Turnbull in his dealings with Abbott, who has sought to undermine and destabilise the Prime Minister over the issue of climate policy, among others.”The PM slapped him down,” said the MP. “He said, ‘We are having a political discussion about it. We have a sensible policy’.” Says a minister present: “Tony is a normally a very persistent guy. He just got completely closed down. Turnbull is usually quite accommodating but he was firm with Abbott. The room was with him” (see Age Says Abbott under Attack).

It is evident that, in securing party room approval, Turnbull has used that to also claim a “victory” over Turnbull. Whether that victory remains extant must be doubted.

In The Age’s Good Weekend magazine, Maley also writes a favourable interview with Frydenberg, who tells her first up that his aim is to be PM.

A rather different picture of the Party Room discussion is given by Peta Credlin in today’s Herald Sun, copies of which are not available digitally. Suffice to say here that, according to Credlin, after promising a Q&A and a political discussion, Turnbull did not allow the political discussion which Abbott sought and simply announced that the policy had been approved. This occurred after a Q&A which was held without any documentation having been circulated to members. This illustrates the very limited opportunity given more generally to assess what is clearly a complex proposal and which involves an increase in government intervention that is inconsistent with liberal values.

The NEG Scheme

I have now obtained a copy of the advice provided by the ESB to Turnbull and Frydenberg on 13 October on a proposed scheme which was released publicly on 17 October (last Tuesday) and which appears to have been adopted with little or no change by the government. It is not clear whether or not it was approved by Cabinet. It is impracticable now to draw attention here to the numerous potential problems. However, I set out below the main features of the scheme (the full text is linked above).

“The Board writes in response to your request for advice following AEMO’s recent report on the risks to reliability in the electricity market. Specifically you requested advice on the changes needed to the NEM and legislative framework to ensure that the system provides reliable, secure and affordable electricity, and in particular, ensure that:

The reliability of the system is maintained;

The emissions reduction required to meet Australia’s international commitments are achieved;

The above objectives are met at the lowest overall costs”.

PS I have attached comments made by Frydenberg on NEG this morning. These suggest that the Turnbull/Frydenberg axis feel the need to claim more and more benefits from a scheme which nobody knows will work.

The New Energy Policy Has No Substance

Des Moore — Thu, 19 Oct 2017 21:13:53 +0000

Assessing NEG

In Wednesday’s Commentary I suggested that the explanation given by an “expert” as to how Turnbull’s NEG would work, and how NEG would save $110-115 pa in costs, was incomprehensible. This expert (John Pierce) was making the explanation at Turnbull’s request to a press conference whose attendants included Frydenberg and board members of the recently established Economic Security Board (ESB), and whose role appears to be to ensure the provision of reliable power and the achievement of the emissions reduction target of 26-28% by 2030 (the text of the press conference is now attached to Wednesday’s Commentary on my web and is a “must read”). My guess is that the two ministers put together a group of “experts” as members of the ESB who are sympathetic to the need for government intervention to reduce carbon emissions.

It should be noted that, after being head of the NSW Treasury for 12 years, Pierce was appointed by the (first) Rudd government as head of the Commonwealth Department of Resources in March 2009 but when that government ceased in June 2010, he became chairman of the Australian Energy Market Commission. He is reported in today’s Age as being the architect of NEG and as saying “We are not pricing carbon. What we are pricing is reliability; what we are pricing is the ability for the mechanism to be dispatched” (see Age Article Explains NEG). Some expert! I would be pleased if any recipients of this Commentary can explain what that means.

But this is not the only question posed by the article. Apart from quoting the absurd statement by Turnbull about physical trading (therefore no price is involved!), note in particular the article says that “Frydenberg sent the states a draft copy of a letter he wrote to Energy Security Board chair Kerry Schott on Thursday afternoon to request her input on more detailed modelling to confirm the claimed $115 household energy saving from the proposed policy” ie as I have previously reported, there is no sound basis to the estimate of the savings as announced. Interestingly, Rod Sims of ACCC seems to have been dropped as an expert for the moment.

I have also previously referred to the views of leading economic journalist (David Uren), who described the claimed savings under NEG as “pure fantasy”, and those of another leading journalist (Terry McCrann), who described the press conference as “an exercise in pointlessness”. A real expert on analyses of claims about global warming, Alan Moran, has also published a damning commentary on Quadrant Online (see Moran on Turnbull & His NEG). He refers to Turnbull’s claims that

“The National Energy Guarantee will lower electricity prices, make the system more reliable, encourage the right investment and reduce emissions without subsidies, taxes or trading schemes. It is truly technology-neutral, offering a future for investment in whatever technology the market needs – solar, wind, coal, gas, batteries or pumped storage.Unlike previous approaches, we are not picking winners, we are levelling the playing field. Coal, gas, hydro and biomass will be rewarded for their dispatchability while wind, solar and hydro will be recognised as lower emissions technologies but will no longer be subsidized”.

And justifiably concludes that “None of this is true”.

But possibly sensing that the apparent welcome from various quarters is not as strong as it seems, Turnbull is reported as indicating that he is prepared to do a deal with Labor (see Turnbull Could Do A Deal With Labor). It is possible that he sees himself a joint leader of both parties! But are the members of the Coalition prepared to contemplate an agreement with Labor on an energy policy which includes the economically damaging 26-28% emissions reduction target to 2030 and a continued subsidisation of renewable to 2020? If Turnbull guaranteed he would not change that in negotiations with Shorten would that be accepted as likely?

As Stone points out in an article in the latest Spectator (see Spectator Australia Article), the Coalition’s polling under Turnbull is actually worse than the latest TPP of 46/54. For example, for the last 15 Newspolls its primary vote has been “at a catastrophic 37 per cent or less” (cf 41.8 per cent at the 2016 election). “As things stand, Turnbull politically is a dead man walking, politically speaking” and as more analysts realise the unworkability of NEG, the Coalition’s polling can only deteriorate further.

More Responses on Abbott

Des Moore — Thu, 12 Oct 2017 09:33:57 +0000

Praise for Abbott’s Address from US Scientist

This morning I received a message on Tony Abbott’s London address from the President of The Science and Environmental Policy Project, Ken Haapala, in the US. It was brief but important because Ken is a scientist and an expert on climate change whose weekly messages report on the latest developments in analysing climate changes, including those theses which he judges to be “off the planet”. This message to me was a response to the full text of Abbott’s address which I sent him as an attachment to my Commentary on Tuesday 10 Oct and which I suggested to him is important “both politically and “scientifically”. Haapala’s message to me was

“ Thank you Des, When I read it, I thought Daring To Doubt was one of the best talks given by a politician in decades. Your comments are most appropriate. Ken H”.

This exchange came almost immediately after the head of the US EPA, Scott Pruit, announced that the Clean Power Plan initiated by Obama is to be repealed. Contrary to my Commentary yesterday, it appears that the CPP had not come into operation because the US Supreme Court had ruled that the Obama Administration had “pushed the bounds of their authority so far that the Supreme Court issued a stay – the first in history – to prevent the so-called ‘Clean Power Plan’ from taking effect. Any replacement rule that the Trump Administration proposes will be done carefully and properly within the confines of the law.” (for further detail see Obama’s Clean Power Plan Gone. Blacking added).

Judging by reports emanating from Canberra, Turnbull’s Clean Energy Target (CET) will also go!

Further Domestic Responses to Abbott

The initial media reporting of the response to Abbott by Business Leaders gave the impression that they wanted a CET because such a policy it would provide “certainty” in business planning. Because of the inherent lack of certainty about the policy decisions of the political parties (not to mention the science) this was always unrealistic and it remains so. However, contrary to the assessment by The Australian’s David Crowe (see BCA Response to Abbott), and having regard to the likelihood that the CET will be much different to that proposed by Finkel, the CEO of the BCA leaves the issue open when she is reported as saying that “the government should outline its new policy, with or without a clean energy target, before revisiting the target” but adding that “coal should be part of our energy mix”. Crowe has also wrongly implied that Abbott’s proposed lower emissions reduction target would not be accepted by BCA President Grant King: he is reported elsewhere as having a more open mind on energy policy.

Probably the most important media response is by Terry McCrann, not because he repeats his now long standing criticism of the dangerous global warming thesis but because he gives Abbott a big tick (see McCrann on Abbott). His opening remarks say it all viz “TONY Abbott’s speech in London was a seminal event. It finally, if belatedly, drew a line in the sand between energy sanity and insanity and invited politicians, business leaders and indeed voters to join him on the side of sanity”. Of course, there are still many not “on the side of sanity” and The Age has recruited John Hewson to argue for Turnbull to tackle Abbott. That might be judged as a bad political strategy as well as reflecting Hewson’s failure to acknowledge defects in GW.

It may be premature to suggest that, notwithstanding his poor earlier decision-making, with the London address Abbott has re- established himself as having the potential to lead Australia up a reformist path. But there’s also a need to recall that some politicians have had a successful second try.

Abbott Challenges Turnbull on Climate & Energy Policy

Des Moore — Wed, 20 Sep 2017 11:29:04 +0000

The lead front page item in today’s Australian reports Abbott as indicating publicly that he will not support a clean energy target and that he advocates subsidies cease to be paid on wind and solar projects. The Australian also publishes an article by Abbott explaining his position. Both articles are attached. Abbott’s own article seems well written and, for the increasing number of sceptics on climate policy, it contains a sensible approach to energy policy which, inter alia, would ensure a reduction in electricity prices.

This is not an open political challenge to Turnbull as PM. Abbott does not have the numbers to do that. But it is a challenge to a major policy enunciated by Turnbull and it has appeared so far, his Cabinet. Turnbull’s initial response is set out below. It appears unchanged – see below. But it is likely that he will attempt to moderate the CET and freeze the renewable energy target of 23.5% when its current objective finishes in 2020 (presumably if reached by then). However, even with a moderated version, it would risk splitting the party and the Coalition because there is now more widespread serious concern about the adverse economic effects of proceeding without change. That would almost certainly result in a number voting against a CET. If the next Newspoll shows another fall, it is likely to increase the support for Abbot’s climate policy, both within the party and the electorate, and increase the pressure on Turnbull to change his policies. As I have argued for some time, the “solution” to improving the Coalition’s electoral chances is to replace Turnbull asap.

I also attach two relevant letter which I have had published, one in The Age and one in the Financial Review. The one in The Age canvasses a possible way of moderating the existing climate policy.