New threadsters

As threadsters would realise the Cat has come under a sustained Bird infestation attack over the past few weeks. As a consequence I have become a bit more cautious about approving new threadsters. If you have had your initial comment not approved and you are not Bird, my apologies.

Posted in Site News | 81 Comments

ALP/Libs in race to wreck the economy with climate change policy consensus

The debate between Mr Shorten and Mr Turnbull last night demonstrated an unsurprising level of consensus on greenhouse gas mitigation.  The Prime Minister talked about the 26-28 per cent reduction of carbon dioxide equivalent emissions (based on 2005 emissions) that the government signed onto in Paris.  Bill Shorten like Real Madrid’s Pepe rolled along the turf, howling in apparent agony after a confected foul because this was the same plan that Tony Abbott’s Cabinet had agreed.

Ostensibly, the two parties’ policies are similar – at least until 2030, after which Mr Shorten adopts The Greens policy and does the Full Monty of 100 per cent renewables.

In 2030, the Turnbull 26-28 per cent reduction means reducing emissions by 154-166 million tonnes per annum.  Bill Shorten’s 50 per cent renewables means 105,000 megawatt hours of wind/solar electricity (plus 18,000 hydro; Labor continues to dine-out on having blocked the Tasmanian Dam proposal a quarter of a century ago and is unlikely to approve any major new hydro facility).  A megawatt hour of coal based electricity equates to around one tonne of carbon dioxide.

Costs of emission reductions vary widely.  In 2011 the PC put the cost for Australia at $44-99 per tonne.  In 2014, Stern and Deitz  put the necessary world price at $US 32-103, rising by 2035 to US$S82-260.  In all cases the cost rises with the level of

If Labor could achieve its 50 per cent renewables at the present price of $80 per Gigawatt hour, the cost would come in at $8.4 billion a year.  To this, another $1.5 billion would be needed in back up and grid strengthening in view of the intrinsic unreliability of wind/solar.  Labour would also use the planning rules to prevent land clearing and thereby make further reductions, without, of course, providing any compensation for the property rights they thereby seize.

Under the Coalition’s Direct Action buy-outs of emissions, the auctions have averaged a $12.1 per tonne price, with 95 per cent of the reduction having been achieved by “vegetation” – de-rating agricultural land.   If such a price could be sustained the 26-28 per cent reduction would be achieved at a relatively modest $2000 to $2,200 billion a year.  But if the government believed that they would surely eliminate the renewables target which cost some $80 per tonne – that is they’d get rid of the renewables target if they thought they could get re-elected without the campaign funding provided by the renewable industry from the rents the policy creates.  If the costs were $80 per tonne the Coalition program would come in at $12.3 to $13.3 billion a year.

And the Turnbull government is leaving little to chance.  The new Safeguard mechanism  sets the stage for the introduction of a cap and trade carbon tax by establishing a data base for the top 140 emitters (covering about half of existing emissions).

Most of these costs of emission reductions are hidden in inflated electricity bills.  And there is a neat fantasy that the cost will be paid not by households but by business (or, better still, big business).   But the costs remain costs and will fall on consumers/taxpayers irrespective of politicians’ hopes.  Indeed it is better if they fell directly on consumers since, like the GST, this means a relative lack of economic distortion that undermines production, causing the departure of energy intensive businesses that would otherwise gravitate to Australia.  The shift of these industries overseas, of course, means no net effect on emissions, just lower living standards in Australia.

To support their policies our leaders offer dire projections of costs of failing to act.  Bill Shorten repeated the ALP policy canard that “extreme events” which once affected one per cent of the earth are now at 10 per cent and that the economic cost will shave one per cent a year every year from GDP.  Such views too radical even for alarmists like Stern and Garnaut.  The bottom line for costs of warming over the next fifty years according to the latest IPCC report range from 2.5 per cent (Nordhaus 2008) to 0.5 per cent (Bosello et al).

Unwinding this mess would be a bonus offsetting any of the more quirky policies of a Trump presidency.

Posted in Uncategorized | 2 Comments

Monday Forum: May 30, 2016

Posted in Open Forum | 131 Comments

The vision thing

Let me ask you this. Is the following headline in today’s Oz pro-Labor or anti?

Labor veteran brands Shorten ‘anti-business’

My take from the debate last night was that Malcolm offered sound corporate advice leading to a strong economy and economic growth, while Shorten offered the promise of a just and fair society in which the government will do what it can to ensure equity as well as a strong economy. Malcolm sounded like a CEO speaking to the board. On only one issue did he come out ahead, and that was on stopping the boats. As for the rest, nothing he said made me think he understood that there are moral issues involved in leadership. The Government must stand for something. Even in his ridiculous concern with global warming, his approach is in the form of a cost-benefit study, rather than as a transcendent view of a better world with kindness to Gaia at its core. You may think that is even more ridiculous, but you won’t touch the Labor-Green vote unless you take that approach.

It therefore doesn’t surprise me to see there has been “a significant slump in support [for the Government] in the key election battlegrounds”. I just have to hope that Shorten really means it when he says Labor will protect our borders, because if Labor wins, the boats will start coming again.

Posted in 2016 election | 14 Comments

Federal election 2016: evidence doesn’t justify more regulation

Today in The Australian:

Here’s a disturbing fact: “Since 2008, the market share of Coles and Woolworths has risen from 60 per cent to 73 per cent.”

Or so Andrew Leigh, Labor’s spokesman on competition, tells us, in proposing yet more regulation.

Posted in Uncategorized | 41 Comments

Leaders debate comments thread – tonight @ 7:30

On ABC and Sky. Comments now seem to work.

Posted in 2016 election | 184 Comments

What’s wrong with the Venezuelan economy?

free market crayons

OK, Venezuela is a mess, but what’s the reason? Here are a few recent stories to remind us that there are at least some paying attention. But these are mostly about what is happening, not why it’s happening.

Venezuela Drifts Into New Territory: Hunger, Blackouts and Government Shutdown…

80% of basic products in short supply…

Venezuela Is Falling Apart

Venezuelans on the food and economic crisis blighting their daily lives

How Venezuela’s socialist dream collapsed into a nightmare

My question is, do people any longer even understand what the problem is and why things are working out this way? The country has more oil than Saudi Arabia and yet its economy is disintegrating. It seems to me that if you vote for the Greens, and possibly Labor (Bernie Sanders Division), you are a prime candidate to take your country in a Venezuelan direction with not a clue in the world about what you are doing wrong.

BTW an extraordinarily clever cartoon.

Posted in Economics and economy, International, Politics of the Left | 43 Comments

Joint sitting wasted

It is perhaps premature, but should the Coalition win the election with a sufficient margin in the House of Representatives to offset a deficit in the Senate there will be a joint sitting of the Parliament for the second time in Australia’s history.

Only three bills meet the criteria for being considered at this potential joint sitting:

  • Building and Construction Industry (Improving Productivity) Bill 2013
  • Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013
  • Fair Work (Registered Organisations) Amendment Bill 2014.

What a wasted opportunity. In the previous Parliament the Government could have put forward any number of bills that would have been in the interests of the people of Australia for resolution at a joint sitting – there is no limit to the number of bills that could have been decided at a joint sitting. Bills such as:

  • Repeal of section 18C of the Racial Discrimination Act or perhaps even better a Freedom of Speech Bill
  • Balanced Budget Bill – requiring Parliament to balance the budget each year
  • Abolition of compulsory superannuation
  • The ABC and SBS privatisation bills
  • Repeal of the Fair Work Act to return Australia’s labour market laws to the pre-2007 provisions
  • Governance reforms for superannuation funds (which now would have no superannuation guarantee due to the abolition of compulsory superannuation)
  • Removal of cabotage restrictions on coastal shipping

And so on. It’s disappointing that the Abbott and Turnbull Governments didn’t have the courage and foresight to stack up bills such as these.

Posted in Uncategorized | 43 Comments

Elections – the betting markets

I know the del-cons, who despise Malcolm Turnbull, are praying for a Labor victory or hung parliament. Opinion polls are interesting, but it is the betting markets where the action is. And the Coalition is at 1.28 and Labor at 3.60.

Meanwhile, in the United States, a Democratic President is at 1.42 compared to a Republican President at 2.80.

And in the UK, the betting markets have the odds on Brexit at 5.00 compared to 1.14 for Britain to remain in the European Union.

While these may all end up being wrong, at least they show where the money is.

Posted in Uncategorized | Leave a comment

Guest Post: Terry Barnes – Regulating e-cigarettes: read all about it!

Professor Emeritus Simon Chapman is a curious chap.

Having signed aboard a team of academics commissioned at considerable cost by the federal government to review the regulation of e-cigarettes and related policy, and co-author of a related discussion paper circulated to a select few, he leapt into print this month to state his views on what that regulation should be, and take aim at respected public health and tobacco control experts and agencies who happen to have a different world view to his.

In a commissioned editorial in the Medical Journal of Australia, and written with fellow masters of objective analysis Martin McKee and “Carmen is an opera that glamorises smoking and should be banned” Mike Daube, Professor Chapman made four points.

First, he said “the use of e-cigarettes in some countries seems to be plateauing”, using a PowerPoint presentation from a single UK academic to make his point. Second, he condemned the “naïve embrace of e-cigarettes by some in tobacco control” and poured acid on the authoritative Public Health England 2014 analysis of the evidence that concludes that vaping is at least 95 per cent safer than smoking. They’re all deluded fools, says he.

What he made of the even more powerful Royal College of Physicians’ compelling report coming down on the side of vaping is unrecorded. Although the RCP report appeared before the MJA published, perhaps its truths were too in convenient?

Third, Professor Chapman implied research concluding e-cigarettes are effective quitting aids is of poor or very poor quality. Fourth, he declared e-cigarettes are a “a means for the tobacco industry to circumvent restrictions on promoting both their image and their tobacco products”.

The MJA editorial concludes “Australian governments and health authorities should not be distracted from existing approaches to reducing smoking, which are bringing such encouraging results”: in plain language, that they should regulate e-cigarettes to make them unviable and unavailable, as they as instruments of the Big Tobacco devil.

In his regular column for The Conversation website, Professor Chapman cross-promoted his co-authored editorial. He urged Australia to follow US and European Union regulatory moves to constrict access to, and the sale and marketing of e-cigarettes (although the EU under its new Tobacco Products Directive is allowing e-cigarettes containing nicotine, unlike their Australian and New Zealand cousins). He argues for Australian regulation to put e-cigarettes on a “tight leash” that could be loosened if their promise is fulfilled and tightened if not.

That sounds reasonable but, clearly, from both his editorial and article, Professor Chapman is already convinced of the latter. It’s hard from what he’s written this month not to conclude that his mind clearly is made up on favour of heavy-touch e-cigarette regulation being not only desirable, but essential. He no doubt will be applauding the Andrews Labor government in Victoria going down the heavy-touch route in legislation tabled last week.

Professor Chapman is entitled to his on-the-record views, and to advocate them as he sees fit. What he has done, however, is pre-empt the conclusions of the expensive policy review of which he is a part, and presumably is the driving force. That is very unfortunate.

That taxpayer-funded policy review, and any claims for its impartiality and open-mindedness, have now has been fatally compromised and, as for the consultations with invited experts that have been going on for some time, why on earth is the review team bothering if they’ve already decided what they’ll recommend?

Seeing it has been made irrelevant, and is now no more than an item of academic curiosity, the discussion paper might as well be fish and chip wrapper. Given this, and knowing it already has gone beyond the charmed circle of invited experts, I thought it could also be shared with Catallaxy readers as well.

So you can access the discussion paper here. Read it for yourself, and form your own views about what it says and how it says it. Personally, I think the regulatory fix is in.
Terry Barnes consults and writes on social policy and politics, including substance abuse harm reduction and related regulation. He is an Australian fellow of the UK Institute of Economic Affairs .

Posted in Guest Post, Oppressive government, Take Nanny down | 10 Comments

Libs ahead by minus four

Everyone seems to think that a Labor lead in the polls should not be taken seriously. Why worry about this, we are asked: Election 2016: Labor surges in the polls as campaign focus turns to economic credentials. The details:

At the end of the third week of the 2016 campaign, Labor surged to its largest lead of the contest to date in a Seven News/Reachtel poll published Friday night, taking a 52-48 lead in the two-party preferred vote.

Meanwhile, over at The Australian: Labor’s reckless economic strategy starting to unravel; Why Turnbull has a wealth of advantage over Shorten; and Malcolm Turnbull must revel in secrets of his success.

I know that aggregates don’t mean everything, and that it is a seat-by-seat battle. And being ahead only counts on election night. And the only poll to take notice of is when the votes are counted, and etc. etc. etc. Nonetheless, down 48-52 does not look to be such a great place for a team that is looking to sweep to victory, or even to win by a single seat.

Posted in 2016 election | 36 Comments