Graph from ABARE
Tim Dunlop notes that the commodities boom is far from over, and in fact that its pace is set to pick up next financial year.
One of the first actions taken by the Blair Labour government in the UK (back in the days when Gordon Brown had a bit of a clue) was to impose a windfall profits tax on privatised utilities to fund social infrastructure. Writing in the Fin Review today, Andrew Leigh thinks we might well consider something similar to cushion ourselves against the possibility of a future recession:
Few issues require such careful political management as a windfall tax. But implemented properly, it is possible to imagine that such a tax could be both economically responsible and in line with fundamental Australian values. Why not raise a little more from our lottery-winning miners today, and squirrel it away for the next recession?
I think that’s an excellent idea, and Leigh makes a good case for it. Continue reading ‘Ensuring prosperity beyond the mining boom’
There’s plenty of coal in the world. This is where to find it by country. We are also using more and more of it. In fact, according to BP’s Statistical Review of World Energy just out coal was the big winner in as an energy source in 2007.
Across the world energy consumption rose by 2.4% with China accounting for a half of the increase in the year 2007 and India a third. The energy source with the biggest increase was coal at 4.5%, with China leading the way. China gets 70% of its primary energy from coal and increased its coal consumption by 8%. Coal showed the fastest growth amongst the fossil fuels for the fifth year in a row.
This is a worry.
Continue reading ‘Coal and Germany big winners in energy use’
Jeff Kennett was notorious for his dislike of inquiries, particularly royal commissions. But there was one that even he had to commission immediately, when the Longford gas plant suffered an explosion in September 1998, killing two people and shutting down Victoria’s natural gas supply system for nearly three weeks. I remember it well, living on-campus at Melbourne University at the time. It was three weeks of barbecues, and boiling kettles to have a bath. More pertinently, it also shut down much of Victorian industry, from dairies to car manufacturers.
Now, it seems that Western Australia is suffering something similar. An explosion on a gas plant at Varanus Island, a tiny speck of land off the coast somewhere near Karratha, has reduced Western Australia’s domestic gas supply by 30%, and will likely take three months to fix.
The WA Liberal Party has, predictably, called for a royal commission into the crisis, focussing on the role of the various state government regulators in monitoring the Varanus Island gas plant. Personally, I reckon that might be asking a secondary question.
Continue reading ‘WA out of gas…’
There’s been evidence, previously reported on LP, that demand for petroleum is dropping substantially in the United States. But, unfortunately, there aren’t any public, timely statistics on Australia’s total fuel usage that I’ve seen yet. But Steven Long at PM has dug up an interesting proxy for it: total petroleum imports, which are sinking like a stone, despite a gradual declining trend in Australia’s domestic petroleum production. From the transcript of the report:
CRAIG JAMES: What we saw in May is that the amount of petroleum that we’ve imported 28 per cent lower than what it was a year ago.
Thais is the biggest fall that we’ve seen in over four years. And it certainly shows that the higher prices are having an impact on people’s behaviours.
STEPHEN LONG: And disabuses people of the notion that basically demand for petrol was non-elastic that people kept on demanding petrol no matter what the price.?
CRAIG JAMES: Well that’s right. It certainly has hit people right squarely between the eyes this time around. Most consumers, motorists would have been used to seeing a $1.40 at the petrol sign boards, but all of a sudden it becomes a $1.50 or $1.55.
Continue reading ‘Fuel demand is elastic - Australian edition’
The New South Wales Premier, Morris Iemma, has deferred a vote on electricity privatisation (which he would have lost due to Labor MPs voting to uphold party policy) in order to negotiate with the Coalition for its support. An admininstration in permanent crisis teaming up with the opposition to introduce something opposed by a large majority of voters. Not a good look.
While we’ve all had a great time mocking Brendan Nelson’s ridiculous promise of a petrol excise cut, it’s always good to be reminded about what the punters out there think. And, while any tiny movements in the voting intentions are essentially noise, they apparently seem to think that cutting petrol tax is a good idea:
Fifty-six per cent were critical of Mr Rudd’s performance on petrol, with 78% declaring the Government should act. Of those wanting something done, 67% said the Government should cut the fuel tax and only 22% preferred Labor’s controversial proposed price-monitoring FuelWatch scheme.
Dissatisfaction with Mr Rudd’s performance on petrol was highest in Victoria at 60% and lowest in NSW at 53%.
Tim at Blogocracy may well have argued that it’s meaningless, I don’t think it’s quite so meaningless as all that.
Continue reading ‘It’s a different world out there’
I’ve come to the firm conclusion that the “honeymoon is over” proclamation issued by the media en masse a few weeks ago with reference to the Rudd government and Kevin Rudd himself means nothing more than the media decided to report everything the government did with some spin about “symbolism over substance” and “lacking a narrative” - most recently exemplified in another complete waste of newsprint from Glenn Milne whose Sunday column this week lacks anything but rumour, gossip and speculation to support a series of fanciful contentions. Milne does include the most bizarre bit of all this verbiage - praise for the unlikely figure of Martin Ferguson as representing some sort of policy rigour, something we’ve had a bit to say about here at LP. In the wake of all this, we’ve got yet another poll today - on petrol and the Liberal leadership - which as Tim Dunlop points out at Blogocracy, is basically meaningless, but has enabled Emo Man Brendan Nelson to get some traction and air time to repeat his constant catchcry for a petrol excise cut.
Continue reading ‘Poll position’
If you’d been watching George Brandis and Pru Goward on Q&A on Thursday night or Christopher Pyne on Lateline last night, you might have formed the impression that Belinda Neal’s alleged dust up with restaurant staff was Watergate or something. High crimes and misdemeanours, corruption, abuse of power, blah blah. It was interesting that Pyne apparently felt able to deflect any parallels with Troy Buswell by saying the Liberal party had endorsed his leadership and he’d apologised (that’s ok, then) and then by claiming that he didn’t have to answer questions about something that had happened a few months ago because it had happened a few months ago and therefore wasn’t “news”. Put this together with Virginia Trioli’s claim that Iguanagate was the political “talking point” of the week (everything the government actually did in policy terms was just “symbolic” or “spin” according to Pyne), and reference to how important the story must be because it was on the front page of the Daily Terror for days, and you’ve got - what?
Add in another datum - the plan by Morris Iemma and Michael Costa to refer New South Wales’ industrial relations powers to the Commonwealth, which is being discussed in terms of revenge on the unions for their stand on electricity privatisation. Continue reading ‘Iguanagate - what’s really going on?’
My Queen’s Birthday weekend was spent in the Victorian high country, visiting, amongst other things, the Mount Benambra which provides the title of my personal blog. While the view remains gorgeous, the fact that it was 11 degrees Celsius on a winter’s day at 1400 metres above sea level was pretty disturbing. The high country is suffering from the effects of climate change. It’s playing a small but fascinating part in doing something about it as well.
Continue reading ‘The last hydro’
Published in Adelaide,
Brisbane,
Climate change,
Economics,
Elections,
Energy,
Environment,
Melbourne,
Perth,
Politics,
Sociology and
Sydney .
Some of the tensions in Rudd’s governance and indeed in his Cabinet over climate change issues are discussed by Brian in this post. Brian’s thoughts could usefully be read together with Shaun Carney’s column in yesterday’s Age [via Gary Sauer-Thompson at Public Opinion]:
The central tension for contemporary Labor is the need to weave together its disparate supporting tribes and Rudd’s car plan, which co-opts concern about climate change to underpin the ALP’s more traditional working class base, tells us how he wants to do it. When Labor was last in power, under Paul Keating, it managed to hold on to most of its white-collar support base but lost office when parts of its blue-collar base, pummelled by the effects of economic deregulation, concluded it had lost touch. Since then, the white-collar left has coalesced more solidly around the Greens - an effect that has been turbo-charged by the death of the more moderate Democrats. This has two consequences, both of which make it harder for Labor to hold on to power.
Continue reading ‘Holding the tribes together in the climate change age’
Penny Wong gave a speech at the CEDA conference the other day. In general terms she took the line that Ross Garnaut has been taking. Facing up to climate change will not be easy or cheap, but not facing up to it will be very expensive and possibly (probably?) catastrophic.
She said:
As a small example of the risk facing Australia from climate change, around 711,000 coastal addresses were at risk from future sea-level rise, Senator Wong said.
She said best estimates showed that $25 billion in assets may be at risk from sea level rise and storm surge.
Continue reading ‘Penny, Peter, Marn and the Professor’
Kevin Rudd was wearing a green tie, and Brendan Nelson was emoting about a business supposedly destroyed by a budget decision on solar panels. Peter Garrett wants voluntary energy efficiency stickers on tv sets. Christine Milne throws her hands up in despair at all this, and quite understandably so.
The nightly news focused on the stunts from both sides of the aisle, and the politics, and maybe that’s the problem. Not dwelt on in coverage of World Environment Day in Australia are the comments from emissions trading architect Professor Ross Garnaut:
An observation of daily debate and media discussion in Australia could lead one to the view that this issue is too hard for rational policy-making in Australia… The issues are too complex, the vested interests surrounding it too numerous and intense, the relevant timeframes too long. Climate change policy remains a diabolical problem.
Garnaut is deeply pessimistic about whether we will be able to mitigate the harmful effects of climate change. Continue reading ‘World Environment Day 2008′
Peter Brent at Mumble is reporting that Newspoll shows Brendan Nelson’s preferred PM number moving up from 12 to a stellar 17 (where it’s been in Morgan incidentally). Rudd’s down 4 points to 66. The 2PP shows no change from last time - 57 to 43 in favour of the ALP.
Numbers here.
Update #1: The spin begins. Introducing the story on Lateline a few seconds ago, Tony Jones said something along the lines of “Rudd’s troubles have hit home”. Total nonsense. What’s happening is that Nelson has achieved what he sought to achieve - boosting his own PPM number. There’s obviously no evidence whatsoever that any of this changes anyone’s voting intention. It just makes Nelson’s position in the Coalition safer.
There’s a huge disconnect between the way the political class perceives the theatre of politics and what voters pay attention to. After a fortnight where almost every media commentator (I’m making a hypothetical exception here, in case anyone can point out any actual exceptions) has been jumping up and down and screaming that the opposition was “winning” the day or the week or whatever, there was no perceptible movement in the electorate on the only number that counts.
Update #2: Newspoll also asked some questions about petrol. The most interesting finding here is that a majority of voters don’t think that either party can do anything to lower fuel prices, or are uncommitted on the question. That, of course, is right. Continue reading ‘Who “won” the petrol wars?’
A scare story in the Oz today about the drastic impacts of an emissions trading scheme, with the impacts “so severe it cannot be reliably predicted by existing computer models”.
The problem is described a little more accurately, if less sensationally, a bit further on. Essentially, the scale of the changes required for the 90% cut in emissions by 2050 is large enough that the existing models can’t cope. Hence Professor Warwick McKibbin argues “That’s why you design policy with all sorts of safety valves and a capacity to adapt over time if it turns out the models were completely wrong.”
I’m no economist, let alone an econometrician, but I do know a teency bit about modelling. And this strikes me as exaggerated fearmongering by people who’ve been running similar arguments for a long time.
Continue reading ‘Modelling, schmoddeling’
Australian combat troops are being withdrawn from Iraq. Some Liberal MPs are still running the cut and pasted “cut and run” line. Others are decrying the withdrawal as a “diversion” from the all important issue of petrol prices. Apparently oblivious to the fact that the Iraq War might have something to do with… petrol prices.
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