Softening the carbon tax

Hi All,

Just heard that Julia talk-to-us-like-were-morons Gillard has decided to go ahead with a carbon tax. Basically, I have not heard any policy from a politician in the last 5+ years, anywhere (including all of the many countries I follow), that has not simply been a bad thing. I am almost convinced that if they were all instantaneously vaporized, the ensuing anarchy would actually be less destructive to society than the status quo. Anyway, I am going to withhold my personal feelings on this tax from this thread, as otherwise the thread will balloon into a big puss-filled tirade of fury.

So, as I have mentioned before:
Logic: Australia derives its energy mostly from carbon emitting fuels -> energy output rates are connected lock-step with economic output -> the carbon tax throttles carbon emitting fuels -> hence economic output will be strangled -> hence we are all going to suffer.

What ideas do people have on the effects of this carbon tax on the markets? Has anyone researched the specifics of this tax that could suggest market distortions that could be profited from? Yes, it is going to cause a general nation-wide economic strangulation, and move control of resources from the private sector to government control. However, there must be ways to protect ones wealth by utilizing an analysis of specific market effects.

On the upside, this whole thing will almost guarantee Labor loses the next election by a landslide, or better yet, the Greens get pretty much wiped from the parliament. The Australian public may be stupid sometimes, but they are not suicidal.

Aussies clearly don't want this tax. Latest update from the Herald Sun poll:

Do you support a price on carbon?

* Yes 14.73% (4,748 votes)
* No 85.27% (27,484 votes)

Total votes: 32,232

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I believe Ms Gillard doesn't want to wait for 2013 to let the people vote on carbon tax as Howard did with GST in 1998 because she knows most don't want a bar of it and they would probably lose government.

It's a major backflip on an extremely controversial issue with some believing that the tax we may have to pay will hurt families and yet do practically nothing for carbon reduction. IMO, it seems to be more something of a personal achievement for Ms Gillard.

However, if Ms Gillard implements it in 2012 without a mandate, one would think labor and greens would be decimated in the 2013 election.

This tax is bound to have a large ripple effect. I think families will still use electricity because if is an essential service. They will then have less holidays, go to the movies less, eat out less, buy less luxury items, buy less expensive clothes, etc, etc.

POtentially a huge ripple effect will come and people will lose jobs in the affected industries.

tothemax6 said:

On the upside, this whole thing will almost guarantee Labor loses the next election by a landslide, or better yet, the Greens get pretty much wiped from the parliament. The Australian public may be stupid sometimes, but they are not suicidal.

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Well, if that turns out to be the case, then the whole proposition at this stage will be well worthwhile. Anything that gets rid of Labor, and even more, the damn Greens, will be ultimately rewarding.

sails said:

Aussies clearly don't want this tax. Latest update from the Herald Sun poll:

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Sails, I've never read the Sun Herald. Does it have a specific demographic/political bias? Obviously this can influence any polls they run.
I'm not suggesting this is the case. I don't know.

I believe Ms Gillard doesn't want to wait for 2013 to let the people vote on carbon tax as Howard did with GST in 1998 because she knows most don't want a bar of it and they would probably lose government.

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Yes, I agree.

It's a major backflip on an extremely controversial issue with some believing that the tax we may have to pay will hurt families and yet do practically nothing for carbon reduction. IMO, it seems to be more something of a personal achievement for Ms Gillard.

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Since she was elected she has been widely criticised for doing nothing. She seems now to have decided if she has any chance of holding on to her job (Combet and Shorten pacing rapidly in the wings) she has to be seen to be decisive and full of action. It doesn't seem to matter that the decisions/action are ill thought out and will cost the country dearly.
Let's remember that most of the current crop of politicians are party hacks, having little experience outside of their political affiliations. If even half of them had been out there running a real business, they would have a few more clues about how to run the country.

However, if Ms Gillard implements it in 2012 without a mandate, one would think labor and greens would be decimated in the 2013 election.

This tax is bound to have a large ripple effect. I think families will still use electricity because if is an essential service. They will then have less holidays, go to the movies less, eat out less, buy less luxury items, buy less expensive clothes, etc, etc.

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Ah, but it is becoming obvious that they intend to buy voters off, especially those in the lower income groups, by providing generous 'compensation'. How on earth does this make any sense if they are in fact attempting to change consumption behaviour?
What rubbish.

I think this is why the announcement was made in such vague terms last week, i.e. so that they could gauge consumer response and tailor the compensation package accordingly.

Then they will compensate carbon emitting businesses so that they are not disadvantaged. Well, how terrific. Why then, will those businesses have any incentive to do anything differently?

POtentially a huge ripple effect will come and people will lose jobs in the affected industries.

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Yes, and we will continue to export coal to China, India et al so they can continue emitting carbon. What a total and utterly pointless political exercise.

How Tony Abbott manages this golden opportunity is going to determine not only his future but that of the country.

PS Amusing to note that on this evening's radio news bulletin there was an item where Ms Gillard described as completely inappropriate Christine Milne's statement yesterday that petrol will be included.
I'm sure we all expect petrol will be included. Clearly, Ms Gillard was a bit put out that Christine Milne pre-empted the announcement of something that undoubtedly will have already been decided.

It would be fun to be a fly on the wall during discussions between the government and the Greens.

I am opposed to a carbon tax due to the broader economic effects on Australia, and the reality that it will not reduce emissions to any significant extent.

But personally:

I've already received $8000 of your taxes, plus another $1300 or so kindly contributed by electricity consumers (that's you...) for solar panels on my roof which are saving me money that I'd otherwise spend on electricity.

Then you kindly gave me another $1000 of your taxes to help cut the cost of my hot water. Plus another $1200 or so from electricity consumers.

Also, I'm doing some paid work (over and above what I would otherwise do) that exists only due to the climate change issue. This work is funded by your taxes.

And I own shares in some energy companies that should do nicely out of it, plus others that will keep on selling coal with no real impact on their operations or profit from a carbon tax.

Personally, I seem to be doing quite nicely out of all this carbon business. I'm not sure that I'm actually going to make a profit out of it, but at least I'm cutting my losses.

Seriously, I'm opposed to the tax as I said. But my first responsibilty must be to myself -if someone's handing out cash then I'd be a fool to not take what they're willing to give me. I'd rather go back to sensible economics and a rational environmental policy however.

Smurf1976 said:

Seriously, I'm opposed to the tax as I said. But my first responsibilty must be to myself -if someone's handing out cash then I'd be a fool to not take what they're willing to give me. I'd rather go back to sensible economics and a rational environmental policy however.

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Well that's right, a man must concern himself with his own position in the world, given the environment he is in. I guess ultimately, the immorality rests with the thief, not he in who's pocket he drops the money.

So you think solar companies are where the money is at? Thing is, the policy won't kick in until half way through next year, as I understand it. And there is just so much political uncertainty given how hated this tax has become already.

tothemax6 said:

So you think solar companies are where the money is at? Thing is, the policy won't kick in until half way through next year, as I understand it. And there is just so much political uncertainty given how hated this tax has become already.

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From a personal perspective, using solar energy at home stacked up for me qutie nicely. But in terms of investing in solar companies, doing that is basically speculating on politics since solar installation work is absolutely driven by government policy.

So I'll put panels on my own roof if it's profitable. But I won't be buying shares in solar companies any time soon.

I'd be more inclined to invest in things associated with natural gas than solar. Assuming it's not a speculative stock, worst case you end up owning shares in a gas utility or upstream producer. If the carbon tax does go ahead, then those things ought to increase in value since gas is a lower CO2 emitting fuel than coal or oil.

Julia said:

...How Tony Abbott manages this golden opportunity is going to determine not only his future but that of the country...

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Aint that the truth. Now if only 'Turntable' and give him some clear air.

Logique said:

Aint that the truth. Now if only 'Turntable' and give him some clear air.

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Apologies for the cryptic response. What I'd like is for Malcolm to stop making himself the story. Doubtless the carbon tax will be softened, but perhaps the damage is already done to the Rudd/Gillard/Brown government?

Parliament Question Time is excrutiating these days.

Julia said:

Anything that gets rid of Labor, and even more, the damn Greens, will be ultimately rewarding.

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I'm afraid we are going to have a green overhang in the Senate for a long time to come. Another election is not going to change that. The only solution to the Green economy wreckers is for the Coalition and Labor senators to put their country first. This won't happen of course.

Can someone explain how the Senate terms work? Are those Greens senators who start in July there not subjected to standing again until two elections away?
i.e. do I have it right that half the Senate is up for grabs each time we have an election?

I enjoyed watching this on inside business

http://www.abc.net.au/insidebusiness/content/2011/s3150004.htm

I particularly like how he inferred that a carbon tax just forces manufacturing off shore to be produced in countries without our carbon standards etc, so that in effect we are only paying to move the problem elsewhere.

This is what anyone with any sense of economic rationalism sees as a real issue.

Unfortunately the Greens etc are too stupid to realise this.


Please give me a politician who scraps the NBN, and scraps the Carbon tax.

Uses the billions to develop renewable energy which would mean almost FREE energy to all Australians, which is clean and green.

On that note, why the heck do we pay so much for oil, gas, and coal generated electricity in this country when people in the middle east pay almost nothing for fuel???


I see a massive softening of the carbon tax, an abolition of the stupid idea.

I would MUCH prefer to pay for direct action, at least then the middle men make less and we can actually hold the government to account, AND we will get a return on investment.

MW for PM

Julia said:

Can someone explain how the Senate terms work? Are those Greens senators who start in July there not subjected to standing again until two elections away?
i.e. do I have it right that half the Senate is up for grabs each time we have an election?

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Senators are elected for 2 terms at a time, half the senate postions come up at each election. The idea by the founding fathers was to provide some stability to the system.

You may well find on current trends that after the next election the greens may have an extra Senator for each state and thereby double the existing numbers.

The very poor performance by both ALP and Libs on top of real growing concern at environmental issues, particularly from the younger generation will see greens policies become the norm wether it is liked or not by the business community.

And the level of carbon tax is not an issue in my view. The need to have one and be part of showing the way is what is needed. Gillard is at least smart enough to recognise this.

Anyway, back to the vegie patch and away from the onslaught of cyber stones.

explod said:

Anyway, back to the vegie patch and away from the onslaught of cyber stones.

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Stay out of the glass house:

First global warming was the buzz word and we were told co2 was cause of temperatures rising, droughts etc. Then people woke up and realised that some parts of the world are cooling down whilst others are warming up. For example New York and London have had some of the coldest winters.

So the Governments (not wanting to give up an opportunity to tax) changed the name to climate change...just an excuse to tax people and reduce the standard of living for the average person.

Trees and plants love Co2, plant some more trees or grow a vegie patch like explod (reduce co2 and have fresh vegies win win).

The climate is changing but i don't think it is our fault, just cycles in the weather.

luke256 said:

First global warming was the buzz word and we were told co2 was cause of temperatures rising, droughts etc. Then people woke up and realised that some parts of the world are cooling down whilst others are warming up. For example New York and London have had some of the coldest winters.

So the Governments (not wanting to give up an opportunity to tax) changed the name to climate change...just an excuse to tax people and reduce the standard of living for the average person.

Trees and plants love Co2, plant some more trees or grow a vegie patch like explod (reduce co2 and have fresh vegies win win).

The climate is changing but i don't think it is our fault, just cycles in the weather.

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But you do not really know so are gambling with the future for your Chindren and their Children and beyond.

It was well documented that global warming would increses extremes in weather, both hot and cold, whilst the mean would rise only slightly in the beginning. If you want to know the truth it can be found, if not you will listen to the ratbags who have a vested interest in us not taking any notice for the purpose of business interests.

Yes, most are in glass houses, indeed..

A book well worth getting out is "The Sixth Extinction" read it back in about 1988, very big eye opener.

Of course knowing the truth requires a bit of real reading and study. You will not find it in the popular business supported press.

explod said:

But you do not really know so are gambling with the future for your Chindren and their Children and beyond.

It was well documented that global warming would increses extremes in weather, both hot and cold, whilst the mean would rise only slightly in the beginning. If you want to know the truth it can be found, if not you will listen to the ratbags who have a vested interest in us not taking any notice for the purpose of business interests.

Yes, most are in glass houses, indeed..

A book well worth getting out is "The Sixth Extinction" read it back in about 1988, very big eye opener.

Of course knowing the truth requires a bit of real reading and study. You will not find it in the popular business supported press.

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and those that have a vested interest in it being introduced are nil?

i think it is you who need to open the eyes

explod said:

But you do not really know so are gambling with the future for your Chindren and their Children and beyond.

It was well documented that global warming would increses extremes in weather, both hot and cold, whilst the mean would rise only slightly in the beginning. If you want to know the truth it can be found, if not you will listen to the ratbags who have a vested interest in us not taking any notice for the purpose of business interests.

Yes, most are in glass houses, indeed..

A book well worth getting out is "The Sixth Extinction" read it back in about 1988, very big eye opener.

Of course knowing the truth requires a bit of real reading and study. You will not find it in the popular business supported press.

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Of course, there are other truths, as follows:
Australia's primary source of energy is carbon (specifically, coal).
GDP is a function of energy burn rates - machines manufacturing, goods transporting, computers computing etc etc.
A carbon tax will therefore throttle Australia's energy output, in turn throttling its economic activity, in turn lowering everyone's quality of life.

Including your children's.

The net effect on CO2 output will be: zero. Why is this, you ask? Those machines, those goods, those computers do not have to stay in Australia. Countries sans-economic-sabotage will make up the energy consumption shortfall.

And a reminder, this thread is about 'softening' the tax by exploiting the market distortions it will cause, definitely not about somehow claiming it is a good thing.

white_goodman said:

and those that have a vested interest in it being introduced are nil?

i think it is you who need to open the eyes

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The future health of us all have the vested interest.

Sometimes I wonder?

=tothemax6;615937Of course, there are other truths, as follows:
Australia's primary source of energy is carbon (specifically, coal).
GDP is a function of energy burn rates - machines manufacturing, goods transporting, computers computing etc etc.
A carbon tax will therefore throttle Australia's energy output, in turn throttling its economic activity, in turn lowering everyone's quality of life.

Including your children's.

The net effect on CO2 output will be: zero. Why is this, you ask? Those machines, those goods, those computers do not have to stay in Australia. Countries sans-economic-sabotage will make up the energy consumption shortfall.

And a reminder, this thread is about 'softening' the tax by exploiting the market distortions it will cause, definitely not about somehow claiming it is a good thing.

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To save the planet for human life to live, expansionism will have to be reversed.

Softening of the tax is not the idea. Once started we will need to strengthen it.

Anyone who does not realise that we are in for huge change due population growth which is causing global warming is dreaming. We will need to reverse it very soon.

explod said:

To save the planet for human life to live, expansionism will have to be reversed.

Softening of the tax is not the idea. Once started we will need to strengthen it.

Anyone who does not realise that we are in for huge change due population growth which is causing global warming is dreaming. We will need to reverse it very soon.

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I'd certainly agree that the notion of constant growth has to stop. But trying to shift to "clean" energy is really just swapping one form of pollution for another.

I note that my mice are still doing quite nicely at matching mouse population to the available food supply and space in the cage. Man would seem to have been out smarted... literally by a mouse.