Labor's carbon tax lie

[Eager]

Smurf - great posts, again.

Regarding Yallourn, its output has ramped up slower than I imagined it would; yesterday it was only generating in the 400's so I expect, as you say, that when it returns to somewhere near full production it will force the hand of other generators. Again, my original question was on a pure supply vs demand aspect and what effect it would have on overal pricing.

Some workers at Morwell have already got the nod to take redundancy packages.

 

[Julia]

I would think nothing will prevent a double dissolution where the necessary laws to repeal any undemocratic laws of Gillard's. Voters will highly likely deliver the Coalition a massive majority in BOTH houses. That is what a democracy is all about.

If Gillard has passed such laws to "Abbott proof" her legislation, she has actually tried to "voter proof" it too. That won't go down well and will add to labor's annihilation in both houses, imo.

How do you think voters would have felt if Howard had undemocratically labor proofed his work choices? And then left it so it would cost billions of taxpayer funds to repeal? Voters would have been even more furious. I think you underestimate the anger out there over carbon tax.

Great post: says it all. The Left do not seem to comprehend the level of anger that already exists.

 

[sails]

...
So overall, 1 - 7 are all essentially the same strategy. They amount to an expectation that the carbon tax will be short lived, or at least that future rates may be lower than the present rate. As such, those with carbon-free energy in storage are producing and selling it as quickly as possible whilst prices remain high, and those with limited coal resources in their own mines are leaving the coal in the ground for the time being on the assumption of paying a lower rate of tax at some future date. Or in the case of Morwell, delaying a closure decision until after the next election. It's all the same thinking however - that the carbon tax may be short lived....

Smurf, thanks so much for your detailed and informative posts. It is interesting to understand some of the inner workings of the power companies

I find your last sentence above interesting: "It's all the same thinking however - that the carbon tax may be short lived." This is coming from the smart money in the power industry and they clearly don't see a problem with this tax being repealed despite the scaremongering from the left.

 

[So_Cynical]

I find your last sentence above interesting: "It's all the same thinking however - that the carbon tax may be short lived." This is coming from the smart money in the power industry and they clearly don't see a problem with this tax being repealed despite the scaremongering from the left.

scaremongering LOL its called reality...sails please give us your insights into how the noalition gets back the 2 billion in the first round of grants and funding arrangements? and the 4 billion that will be handed out before the half senate hand over?

No senate seats will change until 1 July 2014...and that's exactly 1 year after the first 2 billion has been handed out and right at the start of the second 2 billion, but that's something that you wont see 1 vote Tony talking about or anyone else in the noalition.

http://blogs.abc.net.au/antonygreen...he-senate-through-a-half-senate-election.html

 

[Knobby22]

I find your last sentence above interesting: "It's all the same thinking however - that the carbon tax may be short lived." This is coming from the smart money in the power industry and they clearly don't see a problem with this tax being repealed despite the scaremongering from the left.

Generally I think that's correct also, there will be losers however.
Caompanies that spent money of "cleaner" power like Origin will now see their investments mothballed or at least making nowhere near the money they hoped as there is no way they can compete with brown coal.

 

[sptrawler]

scaremongering LOL its called reality...sails please give us your insights into how the noalition gets back the 2 billion in the first round of grants and funding arrangements? and the 4 billion that will be handed out before the half senate hand over?

No senate seats will change until 1 July 2014...and that's exactly 1 year after the first 2 billion has been handed out and right at the start of the second 2 billion, but that's something that you wont see 1 vote Tony talking about or anyone else in the noalition.

http://blogs.abc.net.au/antonygreen...he-senate-through-a-half-senate-election.html

Your obvious glee, at further multi billion dollar wastage by an irresponsible and inept government, goes a long way to explain your blind devotion to them.
As I keep saying, "if as you purport, this government is responsible and working in the best interest of the populace. Call an election"

There appears to be a certain childlike excitement, if not slightly hysterical tone to your post.

As for where Tony and the noalition gets the money from to pay for it or pay it back, well that's easy to answer.
From you and me pal.

 

[StumpyPhantom]

The industry has been down this track before, with a lot of oil-fired generation built in the late 1960's and 70's.

It ended up as a financial millstone of massive proportions, many utilities still trying to work out what to do about the situation well into the 1990's. For the record, SECWA was noted worldwide for its' very rapid shift from oil to coal - achieved partly by converting some units at Kwinana (including those still under construction) to burn coal, partly by converting previously coal-fired plants back to using that instead of oil, and partly by building new coal-fired capacity at Muja.

Perhaps the best example of the situation in this area of the world was in New Zealand where the oil-fired Marsden B power station was closed before it ever opened. It sat there from 1979 until it was finally dismantled in 2011. It never actually generated electricity into the NZ grid even during the various power supply crises which occurred during that period. Last I heard, it had been dismantled but was sitting on the wharf (in pieces), shipping being held up by some sort of dispute over payment. Parts are headed to India.

There are numerous such examples around the world and many of the large coal-fired plants which came online globally during the 1980's were built solely on the basis of avoiding use of the oil-fired plants, there being no other need for additional generating capacity as such. A lot of nuclear and a few hydro schemes were built for the same reasons.

We're set to repeat the same mistakes in my opinion, with the additional point that it is not at all technically easy to convert a gas-fired plant to use coal so there is no "quick fix" solution. At some point, gas won't be so cheap and then we've got an immediate crisis.

Smurf - like others, I'm very grateful to you for your incredibly informative posts.

For that reason, I'm trying to understand in detail what you think the long-term mistakes (or white elephants) are occurring as a result of this carbon tax.

Over and above changing the mix/use of current capacity to suit the new pricing conditions, it appears we're building more gas-fired capacity. Is this new gas-fired capacity only a problem if we run short and gas gets more expensive? I got the impression that with this new fracking technology which has changed the US from a net importer to an exporter that every second country was getting into this.

Wouldn't we have been doing that anyway? Or do you think that without the Carbon Tax on the horizon we would have been building new coal-fired plants? I suppose I'm also surprised to hear there is extra capacity sitting around unused when the general media broadcasts (especially during hot summer blackouts) is that we haven't got enough generation capacity out there.

Finally, someone of your vast knowledge may have a view about what the overall energy mix should look like in the future. In particular, I'm trying to understand where the truth lies amongst the various pro and anti nuclear lobbies. Is nuclear inevitable, essential? Or can we get by without it?

 

[IFocus]

"It's all the same thinking however - that the carbon tax may be short lived."

A quote you can take to the bank by George Megalogenis the other week is that no tax, repeat no tax in the history of Australian federation has been repealed and not replaced by another tax.

That is not going to change under Abbott.

Now think about how Abbott will fund his promises................

 

[noco]

A quote you can take to the bank by George Megalogenis the other week is that no tax, repeat no tax in the history of Australian federation has been repealed and not replaced by another tax.

That is not going to change under Abbott.

Now think about how Abbott will fund his promises................

IFocus, go back to my post 2064. May I suggest it is a better idea than the carbon tax.

 

[Julia]

Now think about how Abbott will fund his promises................

That's a very valid question. If he is going to maintain the tax changes and pension payments introduced by Labor as 'compensation' for the carbon tax whilst removing the tax, he's going to have to find the money somewhere.

Certainly he can follow the lead of Can-do Newman in Qld in cutting the bloated public service, and he can do away with all the expensive climate change related bureaucracy, but will that be enough? I have no idea.
You'd have to think that - after all the criticism levelled at the Coalition last election on their funding calculations - they will be going to the utmost trouble to get it criticism-proofed this time.

 

[StumpyPhantom]

That's a very valid question. If he is going to maintain the tax changes and pension payments introduced by Labor as 'compensation' for the carbon tax whilst removing the tax, he's going to have to find the money somewhere.

Certainly he can follow the lead of Can-do Newman in Qld in cutting the bloated public service, and he can do away with all the expensive climate change related bureaucracy, but will that be enough? I have no idea.
You'd have to think that - after all the criticism levelled at the Coalition last election on their funding calculations - they will be going to the utmost trouble to get it criticism-proofed this time.

I think so too. The Megalogenis article confirms my view that the public service cuts won't do it all. And whilst Abbott has intimated that he will remove the compensation ('without the Carbon tax, you won't need the compensation'), I think most agree that prices aren't going back down so he'll also have to wear some pain for that.

What I don't agree with is the IF claim that Abbott won't therefore repeal the Carbon Tax. He wouldn't be so foolish so as to not act on the one elction promise he has made. He's seen the results of that, so it's just a forlorn Labor hope. Actually, I think it's a deliberate Labor strategy to paint Abbott as a 'future liar'. If you can't lift Gillard's standing, then the next best thing you can do is bring your opponent down to the same level.

Forget it. I'm not particularly enamoured with Abbott. But even I can see that this is the one promise that he dare not break.

 

[Tannin]

You are right, StumpyPhantom, it will be nowhere near enough. An Abbott government couldn't sensibly slash expenditure on anything like the scale required, not when you also remember that it has promised to abolish the mining tax, splash out a very large amount on paid maternal leave at government expense, and a raft of other things, not to mention the real elephant in the room, the very, very expensive "direct action" plan on climate change, which nearly all economists agree is doomed to failure because it achieves so little reduction per dollar spent.

All up, the cuts to government expenditure would have to be truly mind-boggling in scale, and then they still have to get the legislation through the Senate, which is not on the radar. The only way to get an Abbott-controlled Senate would be with a double dissolution, and no government in its right mind would tackle a double dissolution on the back of the most savage cuts to government services this country has ever seen. That would be political suicide, plain and simple.

So the long and the short of it is this: the carbon tax is a realty and it won't go away any more that the GST went away. It's really quite silly to think otherwise as there is simply no practical way for any likely government to remove it now. In four years time, when the other half of the Senate retires and we have a new election (2016 or so), that will be a different matter. But by then, no-one will be particularly interested in removing it.

 

[StumpyPhantom]

You are right, StumpyPhantom, it will be nowhere near enough. An Abbott government couldn't sensibly slash expenditure on anything like the scale required, not when you also remember that it has promised to abolish the mining tax, splash out a very large amount on paid maternal leave at government expense, and a raft of other things, not to mention the real elephant in the room, the very, very expensive "direct action" plan on climate change, which nearly all economists agree is doomed to failure because it achieves so little reduction per dollar spent.

All up, the cuts to government expenditure would have to be truly mind-boggling in scale, and then they still have to get the legislation through the Senate, which is not on the radar. The only way to get an Abbott-controlled Senate would be with a double dissolution, and no government in its right mind would tackle a double dissolution on the back of the most savage cuts to government services this country has ever seen. That would be political suicide, plain and simple.

So the long and the short of it is this: the carbon tax is a realty and it won't go away any more that the GST went away. It's really quite silly to think otherwise as there is simply no practical way for any likely government to remove it now. In four years time, when the other half of the Senate retires and we have a new election (2016 or so), that will be a different matter. But by then, no-one will be particularly interested in removing it.

It's a matter of getting the Coaltion to cost this properly before the election. I think the electorate would appreciate some honesty for a change.

The 'direct action plan' has to go, as does the compensation (even though most has been paid out, and the rest is in the form of higher tax-free thresholds). The public service cuts, savings from the NBN modification. Maybe raise the GST to 12.5% or 15%? If Abbott is so likely to win the election, why not put all this up now. The electorate can hardly retaliate for being blind-sided.

Let's be clear, not just about why all this is necessary, but why it has come to this. This big-spending Labor Government has just splurged our hard-won surplus and gone into so much debt that we're now hooked on this sugar high and can't come back down without pain approximating near-fatal withdrawal symptoms.

 

[Tannin]

^ hmmmm not something they have much of a record at. Still, stranger things have happened.

But we don't need to worry about getting to surplus, we are already there (close enough, anyway) and with a national debt that is miniscule by world standards. Throw in the results of another year's economic growth and its flow-on effect on tax recipts and that's the least of our troubles. (Unlike Greece, USA, many, many other places.)

As you say, the "direct action" plan is crazy-man stuff. But how can they throw it away? Yes, it's very, very expensive way to reduce carbon pollution, but they are dead-set against traditional free market price-based approaches (a tax or a cap and trade scheme), so what's left? I can't see their way out of this one.

 

[joea]

^ hmmmm not something they have much of a record at. Still, stranger things have happened.

But we don't need to worry about getting to surplus, we are already there (close enough, anyway) and with a national debt that is miniscule by world standards. Throw in the results of another year's economic growth and its flow-on effect on tax recipts and that's the least of our troubles. (Unlike Greece, USA, many, many other places.)

As you say, the "direct action" plan is crazy-man stuff. But how can they throw it away? Yes, it's very, very expensive way to reduce carbon pollution, but they are dead-set against traditional free market price-based approaches (a tax or a cap and trade scheme), so what's left? I can't see their way out of this one.

www.amazingcarbon.com

Maybe this link may overcome people's ignorance of Carbon.

joea

 

[drsmith]

No senate seats will change until 1 July 2014...and that's exactly 1 year after the first 2 billion has been handed out and right at the start of the second 2 billion, but that's something that you wont see 1 vote Tony talking about or anyone else in the noalition.

http://blogs.abc.net.au/antonygreen...he-senate-through-a-half-senate-election.html

Do you seriously think that after the electorate nukes Labor at the next election that what's left will be screaming for more ?

The cold, hard reality is that Labor's failure to sell the carbon tax to the public makes it a millstone around their necks.

When in office, Tony Abbott will bury the carbon tax and Labor along with it should they then choose to throw themselves down the hole after it.

 

[sptrawler]

A quote you can take to the bank by George Megalogenis the other week is that no tax, repeat no tax in the history of Australian federation has been repealed and not replaced by another tax.

That is not going to change under Abbott.

Now think about how Abbott will fund his promises................

I agrre with you, Abbott won't repeal it, more likely as drsmith said reduce the price, as an out.

 

[So_Cynical]

So the long and the short of it is this: the carbon tax is a realty and it won't go away any more that the GST went away. It's really quite silly to think otherwise as there is simply no practical way for any likely government to remove it now. In four years time, when the other half of the Senate retires and we have a new election (2016 or so), that will be a different matter. But by then, no-one will be particularly interested in removing it.

Brilliant Tannin....some practical political reality at last.

Your a breath of fresh air.

 

[sails]

A quote you can take to the bank by George Megalogenis the other week is that no tax, repeat no tax in the history of Australian federation has been repealed and not replaced by another tax.

That is not going to change under Abbott.

Now think about how Abbott will fund his promises................

IF - are you calling Abbott a liar? How can you possibly say such a definitive statement rather than just posting an opinion? Sounds like leftie propaganda and scaremongering to me. Low tactics, imo.

If he doesn't repeal it, he will go the way of Gillard. I believe the electorate will give him time for a double dissolution if that is required or wait until July 2014 if the libs get a majority in the senate. How he gets the job done, I don't know. But he would be crazy to lie to the people and so he needs to repeal this very much unwanted tax obviously depending on whether the people get rid of the obstruction in the senate.

Sure other taxes have come to stay, but carbon tax was forced upon the electorate in a deceptive fashion and many people understand it will do very little, if anything at all, for co2 reduction worldwide. There is no point to this tax. This is very different to other taxes. You are underestimating the ripped off feeling from majority of voters.

I could have told you that labor would never change work choices and you would have laughed at me. Same anger now over carbon tax and the coalition need to get rid of it or face an even angrier electorate.

Sure, people might lose their compensation, but if their power bills and other cost of living reduce by the same amount (possibly more) they will not be any worse off.

And if Gillard has voter proofed this tax we need a royal commission, imo.

 

[sails]

lol - is this the latest propaganda instructions from Sussex St? To scare people into thinking Abbott will not repeal it when both he and Greg Hunt are absolutely sure they can?

They will likely need to be rid of obstruction in both houses and that will be up to voters.