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Labor's carbon tax lie

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More costs to be passed on to working families:

THE carbon tax has begun hitting Queensland small businesses, including a Brisbane private school which faces a $70,000-a-year hike in its electricity bill.

Six weeks into the carbon tax regime, price hikes are starting to hit hip pockets as power bills drop into letterboxes.

Queensland Chamber of Commerce and Industry president David Goodwin said the "weird distortions'' were becoming apparent.

"We are finding that ordinary supermarkets like the local IGA may be up for up to $15,000 on the carbon tax alone if they have to re-gas their giant refrigeration system,'' Mr Goodwin said. "Somehow these guys are going to have find ways to cover these extra costs.''
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Read more: Carbon tax price hike jolts Anglican Church Grammar School electricity bills
 
sails said:
More costs to be passed on to working families:



Read more: Carbon tax price hike jolts Anglican Church Grammar School electricity bills
Click to expand...

Sails, you bet me to the punch in posting the above link and Gillard says a week or two after the introduction of the Carbon dioxide tax, "what is all the fuss about? The sky hasn't fallen".

Well dear Prime Minister the sky is about to fall in on you as this great big new tax starts to bite the pocket of every wooooorrrking family and poor bloody pensioners
 
Gillard is a lying so and so and will cop what she deserves before long.

There was a pensioner on the radio the other day that lives on toast and crumpets, and this bi*#* throws a carbon tax on them ?
 
Obviously it's too early for the government to be saying the carbon tax is having no perceptible impact on households. We'll see what happens when big organisations and businesses get their first increased electricity bill and necessarily pass on the costs to consumers.

At the same time, for Tony Abbott to be saying all recent electricity price rises are 100% due to the carbon tax is so utterly silly I wonder what he can be thinking. He is simply destroying his somewhat minimal credibility by making such an extravangantly inappropriate statement.

I keep waiting to see Mr Abbott act like a statesman, a future Prime Minister.
 
IFocus said:
Great headline but lacks real detail as to how the broker and lower costs play out I think there's possible more to that story.

Fact remains real increases in electricity have been far and away beyond the carbon tax exposing another Abbott lie some thing his liberal party colleagues have pointed out.
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IF - we shouldn't be paying one brass cent for something that is not likely to do anything for the purpose it is supposed to be helping.

Gillard did not take her backflip of this tax to the people by way of referendum or election. I don't care how much you try to make light of the back pocket pain of this tax, it simply should not be there if Gillard had shown respect for voters and for democracy.

Two weeks before carbon tax legislation was passed, newspoll showed 59% were against it's legislation and yet she still went ahead. Bligh did much the same thing over asset sales and look at how voters taught her a lesson.
 
IFocus said:
Great headline but lacks real detail as to how the broker and lower costs play out I think there's possible more to that story.

Fact remains real increases in electricity have been far and away beyond the carbon tax exposing another Abbott lie some thing his liberal party colleagues have pointed out.
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Labors tricky lies are to cover the fact business will start slugging from next financial year when costs become clearer. Next to no information was given to business on implementing costs apart from "We will fine you if you mention the Carbon Tax". They still suck at rolling things out, way to go with the consistent form.
 
joea said:
Julia
I would like you to show us why his statements are incorrect!! Put it on paper.
joea
Click to expand...
Sigh.
It is widely known that much of the electricity price rises have been due to upgrading of the 'poles and wires', necessary because previous state Labor governments failed to keep the infrastructure up to a decent standard.
The carbon tax, much as I detest it, is not responsible for all the increases in electricity as Mr Abbott has suggested.

And my statement that I'm waiting to see him act like a statesman was not necessarily related to the electricity debate, much as I think he made himself look foolish with an extravagantly untrue allegation on this. Sooner or later he is going to need to give the electorate something other than slogans, e.g.
"We will stop the boats"
"A great, big new tax"
etc.

Have a look at Peter van Onselen's comments in today's "The Weekend Australian" where he analyses Ms Gillard's new approach, i.e. ignore Tony Abbott and instead attack the States on electricity price rises, the NDIS, and soon the Gonski Report.

Think about it: electricity price rises have been huge under conservative State governments. (She will gloss over the fact that it's because the previous Labor administrations failed to spend enough on infrastructure.)

The States, especially Queensland, have resisted providing the relatively small amount of funding for the trials of the NDIS. She can say therefore that they don't care about people with disabilities.

The same will happen when she asks them to stump up funds to fulfil the suggestions of Gonski.
Fair enough, considering all their other expenditure requirements, but she will ignore that.
She will say they don't care about education for the country's children.

I'm not sure about other States, but Campbell Newman's popularity has fallen 9 points since he was elected, presumably on the basis of his slashing of public service jobs.

Ms Gillard and her government will say to the electorate: " look at what is happening under conservative State governments. It's nothing to what an Abbott led government will be."

The government's consistent rubbishing of Tony Abbott has failed. So they are trying a completely different approach, one which will probably be much more effective.

We will see how Mr Abbott handles this.
 
Julia,

are you referring to this,

But the federal Opposition Leader said the Prime Minister was trying to mislead consumers to divert attention from her own carbon tax.

"This is a fabrication by the Prime Minister," Mr Abbott told ABC radio.

"Why should we believe the Prime Minister now about so-called gold-plating of power infrastructure, when she has never talked about it for the last five years?"
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http://www.theaustralian.com.au/nat...rphy-tony-abbott/story-fn59niix-1226446593729

The part in bold was poorly considered, but it does not attribute all price rises to the carbon tax. I think he's just trying to keep the focus on the carbon tax.

Julia said:
Think about it: electricity price rises have been huge under conservative State governments. (She will gloss over the fact that it's because the previous Labor administrations failed to spend enough on infrastructure.)
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Much of the rises have been under state Labor governments. In the West it's been different, but Labor artifically froze electricity prices prior to losing office in 2008. The three eastern mainland states have elected Coalition governments relatively recently while SA and Tas remain in Labor/Green hands.

Where both sides more equally share have dirty hands over electricity prices rices (both state and federal) is with green energy (solar panel) subsidies.
 
Julia said:
Sigh.
It is widely known that much of the electricity price rises have been due to upgrading of the 'poles and wires', necessary because previous state Labor governments failed to keep the infrastructure up to a decent standard.
The carbon tax, much as I detest it, is not responsible for all the increases in electricity as Mr Abbott has suggested.

And my statement that I'm waiting to see him act like a statesman was not necessarily related to the electricity debate, much as I think he made himself look foolish with an extravagantly untrue allegation on this. Sooner or later he is going to need to give the electorate something other than slogans, e.g.
"We will stop the boats"
"A great, big new tax"
etc.

Have a look at Peter van Onselen's comments in today's "The Weekend Australian" where he analyses Ms Gillard's new approach, i.e. ignore Tony Abbott and instead attack the States on electricity price rises, the NDIS, and soon the Gonski Report.

Think about it: electricity price rises have been huge under conservative State governments. (She will gloss over the fact that it's because the previous Labor administrations failed to spend enough on infrastructure.)

The States, especially Queensland, have resisted providing the relatively small amount of funding for the trials of the NDIS. She can say therefore that they don't care about people with disabilities.

The same will happen when she asks them to stump up funds to fulfil the suggestions of Gonski.
Fair enough, considering all their other expenditure requirements, but she will ignore that.
She will say they don't care about education for the country's children.

I'm not sure about other States, but Campbell Newman's popularity has fallen 9 points since he was elected, presumably on the basis of his slashing of public service jobs.

Ms Gillard and her government will say to the electorate: " look at what is happening under conservative State governments. It's nothing to what an Abbott led government will be."

The government's consistent rubbishing of Tony Abbott has failed. So they are trying a completely different approach, one which will probably be much more effective.

We will see how Mr Abbott handles this.
Click to expand...

Julia
You are sitting on the sideline playing "Judge and Jury'.
You are joining the media in perception of what will happen.
You must have faith!
You must wish for something better.
There are better times ahead!!
Julia I have read all your posts. You are bigger than the above. That I know!!
joea .....I post these words in hope, not failure.
 
sails said:
Why doesn't he just go and join labor? He seems to run contrary to the libs on anything carbon and yet the libs must provide an alternative to Gillard's unwanted tax. Not sure what Turnbull's agenda is here.
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Rattle Tony Abbott's cage. Me thinks he still fantasises about being PM.

I'd still like to know where TA said this,

His comments run counter to the view of Liberal leader Tony Abbott, who says price rises are wholly down to the carbon tax, accusing Julia Gillard of fabrication in blaming the states.
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From the Australian link above. SMH is singing the same tune on the same story, almost word for word.

That's contrary to the view of Opposition Leader Tony Abbott, who says price rises are wholly down to the carbon tax, accusing Prime Minister Julia Gillard of fabrication in blaming the states.
Click to expand...

http://news.smh.com.au/breaking-new...fts-power-prices-turnbull-20120811-2410x.html
 
drsmith said:
Julia,

are you referring to this,



http://www.theaustralian.com.au/nat...rphy-tony-abbott/story-fn59niix-1226446593729

The part in bold was poorly considered, but it does not attribute all price rises to the carbon tax. I think he's just trying to keep the focus on the carbon tax.
Click to expand...
No. I saw him say it on television. No question. No equivocation. It would have been ABC TV about two or three days ago, at night, probably the late news.
He looked right at the camera and said (paraphrasing) "Despite Ms Gillard's attempt to blame the States for electricity price rises, all the price rises are 100% due to the carbon tax."

I was not imagining it. Why do you think it has been picked up and run with by the media generally? Certainly not because I have posted it on ASF!!

From the link above of Malcolm Turnbull's remarks:
OPPOSITION frontbencher Malcolm Turnbull says the carbon tax has contributed to electricity price rises, but has backed the government's view that the "gold-plating" of state government electricity infrastructure has done much more.

His comments run counter to the view of Liberal leader Tony Abbott, who says price rises are wholly down to the carbon tax, accusing Julia Gillard of fabrication in blaming the states.

Mr Turnbull told Saturday Agenda on Sky today that the Prime Minister did deserve "a gold medal for chutzpah" for seeking to minimise the impact of the carbon tax.

But he said states had contributed more to power price rises.

"Over the last five years or so in the east coast capital cities, electricity prices have gone up by about 50 per cent. This is pre the carbon tax. That has been largely a function of the investment in distribution and transmission, in poles and wires," he said.
Click to expand...

Much of the rises have been under state Labor governments.
Click to expand...
Some, but rather the price rises under the Labor state governments have been minimised because they have failed to upgrade infrastructure as I mentioned in my earlier post. The incoming Liberal governments have recognised the need to upgrade and thus there have been the huge price rises we have all seen.
The Prime Minister is largely correct in what she says. Her problem is how to answer the question:
"well, why didn't the State labor governments properly attend to maintaining and upgrading infrastructure so as not to leave the entire responsibility to the incoming Liberal governments?"
She will not be able to answer this.

Where both sides more equally share have dirty hands over electricity prices rices (both state and federal) is with green energy (solar panel) subsidies.
Click to expand...
Yes, absolutely right.

joea said:
Julia
You are sitting on the sideline playing "Judge and Jury'.
You are joining the media in perception of what will happen.
You must have faith!
Click to expand...
Why? To have 'faith' as you put it, in the face of an unconvincing performance imo by Tony Abbott would render me the same as those devoted Labor voters on this forum you so frequently deride.
Hopefully I can retain some objectivity. Not my problem if you can't see the deficiencies in the Opposition Leader.

You must wish for something better.
Click to expand...
Oh, believe me, I do. I just don't see any prospect of it amongst the current candidates to lead the nation.
I have always been a swinging voter so I don't know why you are offended by my reluctance to unconditionally join the Liberal team, as it were.

If Labor were to show some competence, and dump their worst policies, plus toss the agreement with the Greens aside, then find a decent leader, viz perhaps Chris Bowen, I could vote for them.

If you look at the polls where, despite the woeful and disgraceful unpopularity of the government, Tony Abbott is still held in low regard, you will realise my attitude is typical of that of much of the electorate.


There are better times ahead!!
Julia I have read all your posts. You are bigger than the above. That I know!!
Click to expand...
Joe, I have no obligation to agree with you. I'm happy for you to adore Mr Abbott and believe he will fix all that is wrong with the country. I simply don't agree that he can.
 
Trying to be factual on the subject of electricity prices here, and what could be done to fix it.

Much of the issue relates to the "reforms" over the past 20 years which, contrary to the ideological beliefs of the free marketeers, has reduced efficiency in some sections of the the industry rather than increased it. That said, the old state-run utilities weren't perfect either, and in some areas the reforms have indeed lead to improvement - but those improvements are less than the losses elsewhere, hence the overall price rises.

What I'd do to fix it.

On the generation side, the private sector has clearly done a more efficient job of new plant construction, and most importantly selecting what and when to build, than the old utilities did.

The biggest problem by far, indeed it was arguably the only real problem, with the old utilities is that they built too many of the wrong power stations. In some cases this was due to direct political interference, in other cases it was too much union control, in other cases it was simply a utility obsession with nice shiny new power stations. For example:

NSW replaced practically the entire generation system during the 1980's. Massive new coal-fired plants were built, and with a couple of exceptions the old ones were closed due to the resultant over supply making them redundant. In many cases there was nothing wrong with the old ones, some of them were actually relatively new anyway (though closing the coal-fired plants in the Sydney metro area was an obviously good move for reasons of air pollution regardless of economics). Qld did much the same, although some of the closed plants were subsequently re-opened in the 90's once commonsense (and load growth) prevailed.

In Victoria they just became a tad too obsessed with brown coal even though it had ceased to be the cheapest means of generation for new plants. Tasmania did the same with hydro, at one point rejecting an Australian Government offer of a literally free coal-fired plant in order to pursue construction of a dam that was never built anyway. Vic and Tas didn't have the over-building problem that Qld and NSW had (contrary to the popular assertions of environmentalists, the only time Tas had a surplus was for a brief period in the 1970's). What these states did instead, however, was to build the wrong means of generation.

Tas would have been better off taking the free coal plant and the $400 million (a lot of money in 1980) that went with it. Vic would have been better off finishing a hydro scheme that wasn't done until quite recently and purchasing power from NSW (of which they had plenty) instead of virtually bankrupting themselves building Loy Yang. The problem, of course, is that both Vic and Tas were on a construction treadmill and had been for decades. Brown coal construction had been continuous in Vic since immediately after WWII, and hydro construction had been continuous in Tas since 1930. As such, both had a large construction workforce, workshops, construction machinery etc that wasn't easily disbanded without creating social and economic upheaval. Hence just building more brown coal / hydro was the politically (and in the short term socially) easy option even though the end result today is that about 50% of all generation in Vic, and 20% in Tas, comes from these uneconomic schemes.

SA did even stranger things, somehow forgetting that if you build a power station then you need fuel to run it (something which, in their defence, Vic and Tas were always extremely conscious of). They hadn't even finished building Torrens Island (still the largest power station in SA) when they realised that there wasn't enough gas to run it. So they built Northern power station (coal-fired) instead. They built two units at Northern and had plans for a third, the trouble being there was really only enough coal for one. The plant is now shut for half the year, as the (now private) owner tries to maximise profit from the limited remaining coal reserves. In the meantime, they've come up with enough fuel for Torrens Island after all.

So I think it's fair to say that the old state authorities weren't too good at triggering new investment in generation. They either got stuck on a treadmill long after it made sense, built things that didn't need building at all, or built things that were simply illogical. In that case the reforms, particularly where associated with private ownership, have brought about a vast improvement.

But there's a new problem... If there's one thing that the old authorities were extremely good at, it was making best use of the generating capacity they had. Spilling water or unnecessarily running gas/oil peaking plant was one step short of a sacking offence - it certainly wasn't something that would pass without attention of senior engineers or the Commissioner himself. Operating costs were to be minimised and they generally were, end of story.

What happens now however is that low cost plant sits idle whilst high cost plant runs flat out. It happens practically every day. Things like running old and inefficient gas turbines which burn literally twice as much gas (and produce twice as much CO2) whilst modern ones are operating (inefficiently) well below capacity. Dropping the output of baseload plants right on the peaks is another example, as is taking plants offline altogether for no reason other than for force prices up.

The market structure by its' very nature encourages this sort of behaviour, and has essentially undone any benefit from more efficient decisions regarding what plants to build in the first place. So, we build things efficiently but then go out of our way to use them as inefficiently (and pollutingly) as possible.

Solution? I'd scrap the market as it exists now as it is simply too inefficient. That is, go back to centralised control of system operations based on actual costs and sound engineering, not false bids and wasting fuel.

But I'd keep the "competitive" nature of new plant construction via some sort of long term contract process. Let anyone who wants to build a new power station go ahead and build it based on a long term contract for both capacity and actual energy generated. This would be self regulating in that in the event of over supply, contract rates offered would be too low to encourage anyone to build new capacity and vice versa. But once built, hand the day to day control over the plant's output over to the centralised system control, with the operational merit order of all plants based on the contracted rates rather than short term (constantly changing) offers as occurs now.

In the case of transmission and distribution, the cost of which has increased by a ridiculous amount, it's simply a case of game playing which comes about due to industry structure. Entire lines have been built in order to keep the market "competitive" and avoid reliance on particular power stations, for example - something that's only done due to the market itself and not for technical reasons.

And then there's the fact that the companies concerned are focused primarily on increasing allowable revenue, as determined by regulators, rather than on any other aspect of the business. There's one distribution company which went as far as deliberately trying to ramp up peak loads, just so that they could justify building more capacity and earning a regulated return on it.

The end result is that around Australia, we've spend far too much on transmission and distribution with all sorts of things being built which ought not have been built anytime soon (or ever in some cases). This is the single largest cause of price rises for consumers, and is a function of the industry structure rather than any taxation policy.

Solution? I'd put transmission and distribution back into single state-based authorities. They could be either publicly or privately owned, but investment decisions would be made by System Control in order to meet technical requirements (bearing in mind that System Control also controls generation, an intentional outcome to end the duplication that currently exists between transmission and generation assets).

As for retail, that one's not really much of an issue. It's where the visible "competition" occurs but to be perfectly honest, all these "competitors" have costs far higher than even the worst run traditional utility could manage. There's a simple reason for that and it's that the National Electricity Market has so many rules, and such complicated processes, that it takes a fortune in software and an army of people to make work what ought to be a simple procedure of reading meters and sending out bills.

There's one retailer which spent so much on IT to cope with it all, that it would literally have been cheaper to go back to an old fashioned typing pool and send the bills out manually. Either that or just keep the (non-NEM compliant) billing system they already had.

I do understand the economic argument for competition and that it will bring about efficiencies etc. But when the cost of having that competition exceeds the entire cost of running a monopoly to provide the same service, there's zero chance that lower bills will be the end result. I'm yet to meet a person who really wants "choice" in who they buy electricity from - they just want a lower bill since, at the end of the day, electricity is electricity.

In summary:

Generation development and construction has been greatly improved with the reforms. This is the major, arguably only, benefit of industry reform over the past 20 years and it is a significant one. As a side benefit, it's also avoided quite a few environmental battles which would otherwise have needlessly been fought.

Day to day operation of generation was a lot more efficient under the old industry structure, noting that technical efficiency is a far more important driver of costs than staff numbers etc (this being the keep point the free marketeers failed to grasp - it's the technical efficiency of the machinery, not the staff etc numbers, that are the major influence on costs - and unstable operation in a competitive market directly reduces technical efficiency!). This has largely undone the benefits of reform on the construction side.

Transmission and distribution have become an elaborate means of extracting money from consumers, with all manner of investments being made which are not required for technical reasons. It needs to be re- associated with day to day operation of the generation system, and incentives to invest for non-technical reasons removed (noting that in some cases, building new generation makes more sense than building new transmission or distribution - the current industry structure works directly against such logic). This is the single largest issue so far as price rises are concerned. It's bigger than droughts, coal prices, gas prices, who owns the system and taxes.

Retail is just a silly concept really. Why, exactly, would anyone want to pay extra in order to have a different name on the bill and to be charged via a system that even the company itself struggles to explain? That said, it's only a minor contributor to actual bills, but it's one that could be reduced.

Not mentioned are all the "hangers on". The traders, consultants all sorts of other people who have nothing to do with the actual supply of electricity but which consumers are ultimately paying for. Most of them would disappear under a sensible reform plan. No doubt that will upset a few people, but my point is about how to cut bills not about how to sustain something akin to the stock market and professional traders just to keep the lights on via exploiting price variations which are non-real in the first place.

Carbon tax? It will add about 15% to household bills (lowest impact) for typical consumers, up to about 120% to major industry such as smelters, refineries etc (highest impact). Small business will be similar to households, and for larger non-heavy industrial business it's more in the 30 - 50% range although there will be quite a lot of variation (given the diversity of business types, hours of operation etc).

Overall, the carbon tax is the largest driver of price rises for heavy industry and the second largest driver of price rises for households. The largest driver of price rises for households being inefficiencies in transmission and distribution, and the third being inefficiencies in generation dispatch.

In terms of actual CO2 emissions, the carbon tax has an impact but it's not huge. It pushes generation CO2 intensity down slightly and it pushes consumption down slightly also. A bigger issue is the extent to which inefficient generation dispatch pushes emissions up, and to which simple ignorance at the consumer level pushes demand up unnecessarily. Neither has been effectively addressed by the carbon tax, indeed it seems to have made generation dispatch efficiency lower rather than higher (due to "the market" rather than any reason of actual costs or technical factors).

Note that nowhere here have I addressed the question of ownership. It's the industry structure and consequent operation that influences actual costs, with who owns it being a less important consideration. Sure, private enterprise will demand a profit but then governments do essentially the same these days so there's not much difference when the bill comes in. The argument here is more of an ideological one and I can see both sides of the public versus private debate. That said, what you really don't want is lots of different owners of the same technical system, that's when things go pear shaped in a big way. So we really need one owner for transmission and distribution at least within a geographic area, and one owner for integrated generation assets (especially the Snowy and Tas hydro systems due to the water management issues involved). But who that owner is, public or private, is a different debate.
 
Julia said:
No. I saw him say it on television. No question. No equivocation. It would have been ABC TV about two or three days ago, at night, probably the late news.
He looked right at the camera and said (paraphrasing) "Despite Ms Gillard's attempt to blame the States for electricity price rises, all the price rises are 100% due to the carbon tax."

I was not imagining it. Why do you think it has been picked up and run with by the media generally? Certainly not because I have posted it on ASF!!
Click to expand...
I'm not satisfied until I see proof.

Even the best the SMH's Lenore Taylor could come up with was from TA's ABC radio interview comments above,

Abbott responded: ''I'd abolish the carbon tax, that's what I'd do … This is a fabrication from the Prime Minister, this is an absolute furphy.''
Click to expand...

http://www.watoday.com.au/opinion/p...ht-on-surging-power-bills-20120810-23zdx.html

Of interest also is this.

Mr Abbott told reporters in Darwin on Wednesday the carbon tax, as well as federal regulators which approved price rises, were to blame.
Click to expand...

http://www.heraldsun.com.au/news/br...ower-cost-abbott/story-e6frf7kf-1226445794228
 

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