The Prime Minister is fond of reminding us that the recently announced Carbon Tax package is the Labor way of doing things. Now taking the proceeds of a Pigovian tax to compensate some of those whose behaviour we wish to alter is strange economics – next time I have a gin and tonic, I am hoping for a bit of compensation from the excise tax paid on the gin – but the establishment of 20 new agencies and 20 new programs is pure, rolled gold Labor.
Just think of all those possies for their mates (and Bob and Christine’s mates)! And just the fun they will be able to have with other people’s money (nuclear and CCS proponents are urged – forced – to stay away).
These agencies are:
o Clean Energy Finance Corporation
o Climate Change Authority
o Energy Security Council
o Clean Energy Regulator
o Land Sector Carbon and Biodiversity Advisory Board
o Australian Renewable Energy Authority
I would like to call for cost-benefit analyses on all these agencies – something that all economists would surely endorse.
The idea that there could be net benefits from a government-run one-stop shop – take the Australian Renewable Energy Agency (ARENA) – controlling literally billions of dollars is fanciful, to say the least. This agency will dole out bucket loads of money to marginal renewable energy operators and to support dubious research. Has the government learnt nothing from its escapades into running things from Canberra? Waste, inefficiency, rorting – these have been the principal outcomes in recent times.
If the government is truly committed to a market mechanism to reduce the emissions of carbon dioxide, then it should have had the courage to junk schemes that clearly do not fit into that category. The MRET should have been abolished, for instance. But would the Greens have agreed to this? And ARENA and the other agencies should have been killed off before any were given cute acronyms.