Turnbull cannot be shadow Treasurer

I suspect there is some sort of scheme going to promote Malcolm Turnbull to shadow Treasurer. Last week he had an op-ed at the Business Spectator calling for a Sovereign Wealth Fund (SWF) and this week there is an op-ed calling for his promotion in shadow cabinet. Starting from the premise that the Coalition economics team looks a bit weak, we get to …

… what Abbott needs to do – and do very quickly – is to reshuffle.

He needs to make Malcolm Turnbull his shadow treasurer, and tell the world he will be treasurer in government. He also needs to bring former Howard chief of staff and respected bureaucrat Arthur Sinodinos into his front line and make him shadow minister for finance.

Let’s look first at the pro-Malcolm Turnbull argument.

Turnbull is widely respected in the business and wider community for his economic nous, his experience and acumen.

All true. There is a lot to like about Turnbull – he is a self-made man who has worked hard and achieved much. But those attributes are not necessary to be a good Treasurer. I am not convinced that good businessmen make good Treasurers.

By contrast to an excellent track-record as a private citizen, Turnbull has a mixed record as a politician. His legacy in office is expensive but dim light bulbs. He has been shadow Treasurer before. There he opposed Brendan Nelson’s cut in fuel excise in the 2008 budget reply speech. Then he was leader. He supported Kevin Rudd’s ETS. He proposed an increase in cigarette excise in the 2009 reply speech. Last week he was saying that budget surpluses should be invested in SWFs. He was talking about spending money in the national interest. This is a man whose political instincts are to increases taxes and not cut taxes. All the while he is actually shadow communications minister, yet has not laid a glove on Stephen Conroy or the NBN. So for that failure, he should be promoted?

If anything he should be demoted out of shadow cabinet. Now criticism of Turnbull doesn’t absolve the criticism that the Coalition needs to improve its economic credentials. But Turnbull is not the answer. The very first thing a Coalition Treasurer will be doing is dismantling the carbon tax and then the mining tax. Turnbull, however, supports the carbon tax. (I’m not sure about his views on the mining tax). Appointing him to Treasury would send the very strong signal that Abbott wasn’t totally committed to abolishing the carbon tax.

Update I: On Twitter Malcolm Turnbull has this response.

I fear Turnbull is going all lawyerly and drawing very fine distinctions. That’s fine. Here he is explaining himself to Tony Jones

MALCOLM TURNBULL: No, no – Tony, this is where the whole thing is an exercise in arid semantics.

Now, again, I’m not going to be disingenuous with you. You can argue it’s a tax whether it’s cap-and-trade or a fixed-price. I mean, from the point of view of industry and the public, putting a price on carbon involves a cost, and it’s a cost whether the cost is fixed or whether it fluctuates.

Now from a technical point of view, there is a difference between cap-and-trade and a tax, a fixed price, but from an impact on cost of living, impact on the cost of electricity, impact on industry, you know, it’s the same. You put a price on carbon, you make carbon intensive energy and products more expensive than less carbon intensive one.

TONY JONES: OK. Let me ask you a …

MALCOLM TURNBULL: So you can argue they’re all taxes, right? So, you know, let’s – this is the sort of …

So when confronted with the challenge of what he would do as Treasurer when the first priority of an Abbott government is repealing the carbon tax, he engages in ‘arid semantics’.

Update II: Gab finds this gem in Hansard.

The Jevons paradox is a reminder that there is no substitute for ensuring that the focus of policy be keenly directed to the objective of the policy. If that objective is, as it should be, the reduction in greenhouse gas emissions then we will need, whether by an emissions trading scheme, a carbon tax or by regulation, to put a price on those emissions and change the price of carbon intensive energy relative to less carbon intensive energy and thereby, over time, transition our economy to a low-emission economy.

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116 Responses to Turnbull cannot be shadow Treasurer

  1. Infidel Tiger

    Turnbull should go back to being an outstanding private citizen. Very private.

  2. I am not convinced that good businessmen make good Treasurers.

    Me either. Most of the time they bang on about “strong leadership” and have no concept of the government doing less rather than more.

    Turnbull is a classic statist – convinced of his superior intellect and determined to make damn sure we all benefit from it.

  3. brc

    I used to think Turnbull was a future leader. Until he became one, and made a string of style over substance policy utterings, and was unable to cause even a slight chink in the armour of Kevin Rudd, and now Conroy, both of whom display more faults than the Japanese coastline.

    Now I just hope Turnbull decides to spend more time with his family. And I hope someone in the Liberal party brings up that suggestion prior to the next election. Then he can get onto the ABC circuit with Malcolm Fraser and John Hewson and suck up the love.

  4. Barry

    But what to do with Hockey?

    He is one of Abbott’s true weaknesses.

  5. JC

    Abbott doesn’t do the pat on the back. He lets others talk to him and present the reasons why it hasn’t worked out well.

    Abbott needs to be there once it’s sunk in and help him through a hard time.

  6. Infidel Tiger

    But what to do with Hockey?

    I suggest we all pitch in and buy him a butcher’s shop. That is his true calling in life.

  7. Will Kane

    I suggest we all pitch in and buy him a butcher’s shop. That is his true calling in life.

    This has the ring of truth! 🙂

  8. JamesK

    I imagine the “some sort of scheme going to promote Malcolm Turnbull to shadow Treasurer” is from Malcolm Turnbull in the same way all sorts of “some sort of scheme going” in the ALP emananted from Turnbull’s nemesis Rudd.

    I imagine Turnbull uses the media in the same way Rudd does as well.

  9. Token

    Now Sinc, you will be writing an article on the Drum with this as the topic. The man is worshipped at that sheltered workshop.

    PS: If it helps, you’d beat your previous PB of comments from the fruit bats.

  10. On your Marx

    It would have been natural for Turnbull to support the ETS under Rudd ( as he would undoubtedly do now in private with the current ETS) as it is little different to his government’s proposed ETS.

    Fancy spending money in the national interest!

  11. there were some things that Abbott did, which were ferociously attacked at the time, but proved to be of excellent judgment:

    (1) vote down ETS

    (2) not to give in to the independants

    (3) never promote Turnbull to Treasurer

  12. JC

    WTF are you trying to say, homer?

    We’re back to the incoherence era now are we? Get back to the shelf stacking and stop wasting time here.

  13. .

    Homer – your national interest revolves around taking money off me without consent. We could nix carbon pollution by replacing power stations with nuke and getting rid of the uneconomic NBN.

  14. Biota

    This discussion raises an interesting quandary.

    On the one hand Labor ministers are lambasted for being union hacks/career politicians, never having created a dime in their lives (to borrow from Mark Steyn). Then MT, who has created several dimes, doesn’t seem to have the philosophical underpinnings to be a conservative treasurer.

  15. On your Marx

    Yes It would be hard to understand if you do not understand english.

    Nuclear power cannot work without an ETS and as for the NBN it is much more competitive than what it replaced.

  16. Woolfe

    As well as dim the light bulbs also contained mercury, which is not good for our environment….
    http://www.abc.net.au/science/articles/2008/10/29/2404292.htm

  17. JC

    and your far more effective stacking shelves than posting junk economics here Homer.

    Nuke can work without an ETS. Wait for the price to fall below that of coal and the introduction will be voluntary.

    How would you know it’s more competitive, as the secretary of the stackers union?

    Evidence please.

  18. Ivan Denisovich

    I suspect the desire to see Turnbull eventually usurp Abbott as Liberal leader is behind some of this chatter. First the Treasury, then the throne. What’s overlooked is Turnbull’s record of destabilisation. He was apparently quite brazen in his attempt to undermine Brendan Nelson and take his job when Shadow Treasurer under him. I haven’t seen anything to convince me he wouldn’t attempt the same against Abbott if re-installed as Shadow Treasurer. He would likely view elevation to the No.2 position on the Opposition benches as endorsement of him as heir apparent and that would only incentivise him again to such disloyal conduct.

  19. .

    Nuclear power cannot work without an ETS and as for the NBN it is much more competitive than what it replaced.

    You are a fucking lunatic. Nuclear is priced competitively. Read some reports from IBs, shit for brains. The NBN doesn’t pass a CBA and is off balance sheet – and about four years behind schedule.

  20. .

    Nuclear power cannot work without an ETS and as for the NBN it is much more competitive than what it replaced.

    You are a fucking lunatic. Nuclear is priced competitively. Read some reports from IBs, (let me help you – try Credit Suisse) shit for brains. The NBN doesn’t pass a CBA and is off balance sheet – and about four years behind schedule.

    Fucking dishonest c**t.

  21. Sleetmute

    I agree Sinc but I don’t agree about demoting him about of Shadow Cabinet. At least he has credibility when he speaks about the NBN. How bad was Tony Smith before the last election, sweating bullets Hockey-style while he stood there like a dufus as Andrew Robb announced the Opposition’s broadband policy.

  22. Feral Abacus

    Turnbull as Shadow Treasurer and then dinky di Treasurer would deprive Abbott of oxygen and constantly fuel leadership speculation. Ideal man for the role would be Arthur Sinodinos.

  23. Mark P

    Turnbull, however, supports the carbon tax.

    Sinclair,
    Is this correct? My understanding is Turnbull supports an emissions trading scheme. I did not know he is clear and on the records supporting a carbon tax.

  24. JamesK

    Sinclair,
    Is this correct? My understanding is Turnbull supports an emissions trading scheme. I did not know he is clear and on the records supporting a carbon tax.

    Try not to be so utterly and inanely dense on the imaginings that ur about to score a victory, Mark P.

    Turnbull supports a price on carbon.

    His preferred method is and ETS.

    What we have now is a carbon tax morphing into an ets.

  25. I want to comment but I can’t see the keyboard cause of the ‘Green’ light globes.

  26. Gab

    He says he opposes a carbon tax but then…

    As far as this particular proposal is concerned the Government’s proposing to have a fixed price for at least three years. Now, that’s what’s called a carbon tax, that’s a different approach. It’s one that I’ve never, whether in the past or today, I’ve never favoured a carbon tax, a fixed price, although some of my colleagues have done at different times.

    But it’s been a contentious policy area in the Coalition but the current position of the Coalition is to be opposed to this scheme of the emissions trading scheme/carbon tax.

    KELLY FULLER: And you personally, do you think it has merit?

    MALCOLM TURNBULL: Well look I think that the best thing I can say is not express a personal view and just simply say that the Coalition’s policy is to be opposed to it. We’re part of a collective, I’m a member of the shadow cabinet and so all of us, whatever personal views we may have and as you can imagine people come to these things with a range of personal views, you form a collective position and that is the position of the Coalition. So the position of the Coalition is to oppose, is to vote against in other words this carbon pricing mechanism of the Gillard Government.

    KELLY FULLER: Is it difficult then to hold your tongue when you may in fact have a different thought or opinion on what’s happening?

    MALCOLM TURNBULL: Oh look I think that politics is a team sport. Now after I was replaced as leader of the Liberal Party by Tony Abbott, and of course Tony changed his view on emissions trading as you know, I mean he had supported a carbon tax at one point, he supported an emissions trading scheme and then… no doubt and I’m not suggesting he did so other than what were good reasons, he changed his position and resigned from the shadow cabinet and challenged me for the leadership and was successful. So the point is that as long as you are a member of the shadow cabinet, politics is a team sport and you stick with the team position. So I’ve given Tony Abbott a consistency and a loyalty that …. frankly I didn’t receive consistently from all of my colleagues while I was leader. But I’ve given him that consistency and loyalty and that’s why I’m saying our position is to oppose the Gillard Government’s carbon tax and I’m not deviating from the Coalition’s position.

    July 13, 2011.

    And also…

    “Just because somebody like myself is in favour of a market-based mechanism of putting a price on carbon, [it] doesn’t mean I’m going to support any variant on that theme,” he said.

    So maybe by “putting a price on carbon” Turnbull means ETS.

  27. Gab

    Twitterati…

    Malcolm Turnbull ? @TurnbullMalcolm

    @Trisha_Jha @sincdavidson he has no interest in the facts. unlike others I have always opposed pricing carbon with a carbon tax.

    Well that’s darn pretty definite.

  28. Art Vandelay

    Malcolm Turnbull ? @TurnbullMalcolm

    @Trisha_Jha @sincdavidson he has no interest in the facts. unlike others I have always opposed pricing carbon with a carbon tax.

    Semantics. A carbon tax and an ETS are exactly equivalent. The proof for this used to be taught in any second year economics course.

  29. blogstrop

    I will not endorse anyone who thinks we have to act on global warming and handicap our economy for no ultimate benefit. Whatever we do in useless sacrifice will make zero difference to the climate. It will also get harder to reverse the damage to industries the longer this idiocy goes on.
    Turnbull and Hunt are both way too ardent believers. The time may have arrived for the libs to openly oppose all anti-Australian measures as futile, and to question the whole scam. The commentariat want a policy? Give them that. The passivity with which an ETS was endorsed previously is now used like a symbolic Albatross hung around their necks.

  30. JC

    Pee’s back for another toasting, I notice.

  31. .

    Art I disagree. Do you think a quota is the same as a tariff?

    Actually, this means Malcolm is MORE wrong, on theoretical grounds.

  32. Al Terrego

    I’m surprised the Godwin Grech affair hasn’t been mentioned. Dispayed what Keating identified as Turnbull’s fatal flaw – lack of judgement.

  33. Mark P

    Art I disagree. Do you think a quota is the same as a tariff?

    Actually, this means Malcolm is MORE wrong, on theoretical grounds.

    Thankyou, and also to Gab for the research. I’m not sure why Sinclair has not corrected the error in the post, but I guess that’s coming.

  34. Pickles

    The enemy just want Malcolm in a position of authority in the oppostion so they can punch the piss out of him like they did last time.

    Until he get there they will raise “leadership tensions” and “front bench weakness”. This will give them a distraction.

    The quad bike needs to be ridden and the dawgs need to ride upon, it Malcolm. Surely you yearn for a bucholic existence rather than this shit?

  35. jmc

    A quota is a form of tariff in that both restrict imports.

  36. JC

    How about you go first and explain your position on Finkster, Pee, you obfuscating little grub.

    Man the hell up. If you’re a finkelstonian then say so. Or are you wanting to be seen as the coward you are?

  37. .

    Pee you realise this means Gillard’s approach is economic vandalism, don’t you?

  38. Robin of the Hood

    Of course Malcom has never supported a carbon tax, he supports an ETS. His Goldman Sachs genes tell him there could be a quid in it!

  39. Mark P

    How about you go first and explain your position on Finkster, Pee, you obfuscating little grub.

    Man the hell up. If you’re a finkelstonian then say so. Or are you wanting to be seen as the coward you are?

    Huh? This is like a circular reference.
    Totalitarians demand responses to questions that were never asked.

  40. Mark P

    Pee you realise this means Gillard’s approach is economic vandalism, don’t you?

    Did it ever occur to you that I don’t actually support a carbon tax?

  41. Art Vandelay

    Dot, they are equivalent (ie, they have exactly the same impacts).

  42. Gab

    Mark P

    I’m not sure I believe Turnbull, based on what he has said in the past. Okay, today he has tweeted the above but to be honest that’s the first time I’ve seen a positive declaration on the matter. Note the interview above where he is pushed to give his opinion on the carbon dioxide tax (they’re not really going to tax carbon, are they?)and he reverts to “it’s the party line”. Looking at a vast number of articles past, printed in the MSM, I’m not alone in thinking that Turnbull was not opposed to a carbon dioxide tax.

  43. Mark P

    Dot, they are equivalent (ie, they have exactly the same impacts).

    Who is this guy?

  44. JC

    Totalitarians demand responses to questions that were never asked.

    Hypocritical ones do you mean?

    . I’m not sure why Sinclair has not corrected the error in the post, but I guess that’s coming.

    You can choose not to answer it as we all know what it is, Pee. But try and not e a fucking hypocrite all the time as its currently putting me off my chocolate eclair.

  45. .

    Dot, they are equivalent (ie, they have exactly the same impacts).

    In a simple model, until there is a demand shock. Supply cannot adjust.

  46. m0nty

    Of course the Libs wouldn’t parachute Sinodinos into a plum frontbench role only months after being an unelected private citizen. That sort of stunt is only run by the ALP. Oh wait…

  47. Mark P

    Gab

    Thankyou. When he was opposition leader, he supported an ETS and clearly stated in the interview you posted that
    “I’ve never favoured a carbon tax”.

    I am much more interested in pareto efficient outcomes for pollution control and limitation on the emission of pollutants known to adversely affect human, plant and animal life. An ETS seems much more likely to achieve that outcome since burning coal is just about the worst possible thing imaginable for public health. Any switch from coal to gas, nuclear and renewable is a huge victory for public health.
    I’m not convinced a carbon tax which compensates consumers for any consumer price increase will incentivize correctly.
    An ETS, by contrast, provides a financial incentive to switch from coal.

  48. JC

    What stupid strawman are you erecting now, Monster?

  49. .

    ???

    No one criticized Gillard or Bob for that.

    He began a regime of great stupidity and waste, and Gillard is gutless and is not in charge and he didn’t fit into his role so smoothly.

    monty the farmer and boxing champ with corn between his toes. Another strawman beaten up.

  50. .

    I am much more interested in pareto efficient outcomes for pollution control and limitation on the emission of pollutants known to adversely affect human, plant and animal life.

    ???

    I don’t give a shit what it does to animal and plant life. Your modelling has to be invalid.

    I’m not convinced a carbon tax which compensates consumers for any consumer price increase will incentivize correctly.

    You don’t know the difference between the income and substitution effect.

    The carbon tax should be shelved because it has never passed a non rigged cost benefits test.

  51. Quentin George

    Eh, Paul Fletcher should be Comms Minister. Turnbull is clearly ineffective in the role.

  52. Mark P

    You can choose not to answer it as we all know what it is, Pee. But try and not e a fucking hypocrite all the time as its currently putting me off my chocolate eclair.

    Stop while you are ahead Jayzee. You are scoring multiple own goals by attempting to compel a comment on free speech.

    If you can’t see the ridiculousness, then there’s really not much I can do.

  53. Mark P

    Sinclair,
    What is your policy here?
    Do you issue corrections where an error is identified in a post?

  54. .

    What about you, Pee?

    I’ve corrected you. Start retracting. GO!!!

  55. JC

    You cowardly grub, Pee. There’s no compulsion but a request you answer the question.

    And apply your same standards and stop demanding answers from Sinclair too, you piss weak mental midget.

  56. JC

    I’ve corrected you. Start retracting. GO!!!

    You can’t ask the cowardly little grub a question though, Dot as Pee considers it compulsion and breaching his right to free speech.

    You ought to be banned from ever appearing on this site, pee, you little grub. A life time ban.

  57. Mark P

    What about you, Pee?

    I’ve corrected you. Start retracting. GO!!!

    Funny – all I saw was some blogianese.

  58. .

    No no no there will be no errors without errata on this blog. GO!!!

  59. Mark P

    drawing very fine distinctions

    Sinclair,
    Do you really think the difference between an ETS and a carbon tax is a ‘fine distinction’?
    Admit you have been caught out. It will be a lot easier, and I forgive you.

  60. Sinclair Davidson

    No Mark. Turnbull voted for the CPRS with a one year fixed period. Now invites us to believe he doesn’t support a three fixed period for same thing?

  61. JC

    Is Pee having a conversation with an imaginary friend now?

  62. Winston Smith

    Turnbull needs to be chucked out. He’s up to his old tricks of destabilising those around him. His position has been in favour of an ETS until today when he said he didn’t want one. He’s playing semantics games, and this is what he did with Nelson.
    Turnbull is in hock to Goldman Sacks, and I wouldn’t trust him as far as I could spit a dead rat. He’s the Libs equivalent to Rudd.

  63. Mark P

    Sinclair,
    The ‘cap’ was never a tax. The ‘trade’ in year 2 was the issuance of permits.
    An ETS is simply not a carbon tax. I’m mystified why you are not just making a correction and moving on.

  64. Sinclair Davidson

    Mark – move on where? How? Why? Turnbull is has a long history is this area. Where is the error in pointing to his well-known policy position and concluding that this view combined with others makes him unfit to be shadow treasurer? Pray tell.

  65. Mark P

    Mark – move on where? How? Why? Turnbull is has a long history is this area. Where is the error in pointing to his well-known policy position and concluding that this view combined with others makes him unfit to be shadow treasurer? Pray tell.

    Sinclair, you said he supports a carbon tax. A carbon tax is very different from an ETS both politically and economically. It’s disingenuous to pretend otherwise.

  66. Gab

    When we talk about putting a price on carbon, what we are seeking to do is to make carbon intensive energy more expensive relative to less carbon intensive energy.

    As most of our energy in Australia is generated from burning coal and as low-emission generation is—at least in the present state of technology—more expensive, it follows that any policy to cut greenhouse gas emissions, unless it is funded directly from the taxpayer’s purse, will increase the cost of energy. This will offset the impact of the Jevons paradox and result in any rebound in energy usage stimulated by the increase in efficiency being at least moderated to some extent by the price increase.

    The Jevons paradox is a reminder that there is no substitute for ensuring that the focus of policy be keenly directed to the objective of the policy. If that objective is, as it should be, the reduction in greenhouse gas emissions then we will need, whether by an emissions trading scheme, a carbon tax or by regulation, to put a price on those emissions and change the price of carbon intensive energy relative to less carbon intensive energy and thereby, over time, transition our economy to a low-emission economy.

    http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22chamber%2Fhansardr%2F2010-06-22%2F0091%22

  67. Helen Armstrong

    Jees, Gab, you are good!

  68. brc

    Turnbull is splitting hairs on the same policy.

    Abbot tagged the ETS as a ‘great big new tax’ which effectively crystallised this unknown beast in the publics mind, and torpedoed it.

    For Turnbull to say he supports an ETS but not a tax is just wordplay. The same policy goes from fixed price to floating, effects the public in the same way.

    Effectively what Turnbull is trying to do is say : he supports the coalition policy to dump the carbon tax, but doesn’t support the policy to dump the ETS that follows it.

    Abbott needs to pull him in here, and quick smart. Read him the riot act – on board or walk the plank. It’s the one thing Abbott can show leadership on.

    The entire universe of ‘carbon pricing’ is a futile, stupid, regressive policy beloved of economic modellers and socialists, but nobody with a rational brain interested in living standards or observant of what happens in the real world.

    Even if co2 was a problem – which it patently is not – then these policies do nothing to stop it.

    The European ETS has been trading for years now and has done precisely zero for both co2 emissions and for ‘alternative energy’ investment. Turnbull and his ETS loving cohorts would do well to explain this complete and utter policy failure before starting out.

    Sorry Malcolm, but you got caught up in global warming hysteria, and nothing short of a full retraction of carbon pricing thoughts will save you now.

    Take Hunt with you and go form your own tax and spend party.

  69. JamesK

    Effectively what Turnbull is trying to do is say : he supports the coalition policy to dump the carbon tax, but doesn’t support the policy to dump the ETS that follows it.

    I’m no fan of Turnbull b ut ur verballing him brc.

    He’s a member of the Coalition front bench and as such he supports the Coalition policy.

    He acknowledges that he is personally in favour of a market mechanism price on carbon dioxide production as it is undeniable.

  70. JamesK

    Effectively what Turnbull is trying to do is say : he supports the coalition policy to dump the carbon tax, but doesn’t support the policy to dump the ETS that follows it.

    I’m no fan of Turnbull b ut ur verballing him brc.

    He’s a member of the Coalition front bench and as such he supports the Coalition policy.

    He acknowledges that he is personally in favour of a market mechanism price on carbon dioxide production as it is undeniable.

  71. Sinclair Davidson

    A carbon tax is very different from an ETS both politically and economically. It’s disingenuous to pretend otherwise.

    No. That’s not Malcolm’s view at all.

  72. Gab

    Turnbull voted for the CPRS with a one year fixed period. Now invites us to believe he doesn’t support a three fixed period for same thing?

    Turnbull even refers to the one year fixed as a carbon tax.

    The Prime Minister has now said it will not start until 2011 and when it starts it will not actually be a trading scheme at all because the permits will have a fixed price. It will be a carbon tax for the first year and the trading will not actually begin until 2012

  73. Winston Smith

    “Abbott needs to pull him in here, and quick smart. Read him the riot act – on board or walk the plank. It’s the one thing Abbott can show leadership on.”

    And if Abbott doesn’t pull him in, he will suffer the death of a thousand leaks.
    No, this has become a defining issue for me – Abbott sacks Turnbull or my vote walks. I’m not going to tolerate another softcock Liberal victory of the same quality as in Victoria.

  74. JC

    Pee:

    Answer my question you grub. Do you support Finkelstein’s attempt to muzzle people?

  75. brc

    I’m no fan of Turnbull b ut ur verballing him brc

    OK, point taken.

    Let me rephrase.

    Publically as a frontbench shadow cabinet member he supports the Coalition plan to dump the tax, but privately he would like to reinstate an ETS as coalition policy. If he were to be reappointed leader, I’m sure ‘bipartisan support’ of some type of carbon pricing would be his first action.

    My overriding point is that any type of ETS is dead politically because, just like Keynesian policies, they sound fine on paper but just don’t work when someone tries to implement them. In the case of an ETS it requires a worldwide comprehensive and adopted plan of everyone agreeing to do the same thing. Any casual look over the history of free trade shows how impossible that is, and at least free trade has the ability to improve the quality of life of the people who implement it.

    A global ETS means that everyone must suffer equally. So it’s got no hope. And a unilateral ETS is a disaster as you export industry to lower cost and lower efficiency nations.

  76. Tiddly Pom

    brc @6.24pm is closest to the mark imho.

    There is a difference in mechanistic terms between an ETS and a tax as a way of CO2 equivalent) pricing. The tax fixes a price level and hopes like hell that translates to the ostensible objective of the exercise, a reduction in CO2 equivalent emission levels of a certain quantum. An ETS sets the quantum by issuing permits to that level and lets a market (a pretty artificial one of course) come up with the price. There is little doubt that for anyone who believes markets are better at producing desired outcomes than governments, that at this level there is a difference and an ETS is better.

    BUT, an argument at this level entirely misses the point about why a CO2 reduction is required by Australia in current global circumstances, at what level it should be set, and (in the case of the Gillard tax) how the level of the tax translates to the desired quantum of reductions – she has just plucked a tax level out of her capacious arse, in fact; how that produces a reduction of any particular quantum is at best concealed in the bowels of a Treasury model that no-one has seen and more likely doesn’t exist even there.

    And this is why the likes of Mark Pee want to debate the issue at this level. It is a level that by implication accepts all the assumptions about objectives and desired outcomes that they believe in and don’t want discussed. Trollery, or arid semantics if you prefer.

  77. Elizabeth (Lizzie) B.

    I’m in Turnbull’s electorate and I won’t vote for him again unless he unequivocally says he is against commiting Australia to a CO2 tax or an ETS; also he needs to tell me that he will support all efforts to completely undo (not just ameliorate) Labor’s existing CO2 tax legislation and its ETS flow on.

    You are losing lots of votes on this Malcolm, perhaps more than you realise in your own electorate. Labor and the Greens will blandish you, but they won’t vote for you. Pick up litter and clean up waterways if you really want to be green, and leave it at that.

  78. JamesK

    brc @6.24pm is closest to the mark imho.

    Turnbull voted against the Carbon Tax legislation Tiddly.

    He believes in IPCC and catostrophic anthropgenic global warming.

    He lost his leadership because of it.

    What more do you want from him?

    A recant ala Galileo?

    Don’t get me wrong, I reject AGW alarmism.

  79. sdfc

    JC

    You ought to be banned from ever appearing on this site, pee, you little grub. A life time ban.

    JC again

    Pee:

    Answer my question you grub. Do you support Finkelstein’s attempt to muzzle people?

    What a hypocritical pansy.

  80. oil shrill

    Art I disagree. Do you think a quota is the same as a tariff?

    A tariff will increase the price of the imported good on which is then paid by the end consumer. A lower quantity (Q1) will be demanded as a result.

    A quota will restrict supply, and will be economic rent to the holders of the quota who will sell at a market price that clears the market.

    If this quota is Q1, then the market price will be the same as the price of the good plus tariff.

    Assuming a perfect market.

  81. JC

    If you didn’t have this chronic drinking problem, SDFC, you would have realized that he’s been asked numerous times (by me) if he’s a Finkelstinian. However he refuses to provide an answer despite asking questions of Sinc and demanding answers.

    It’s his hypocrisy that causes me to conclude he ought to be banned. There’s nothing pansy about demanding someone man up a little and answer a question let alone holding himself to the same standards he expects of others.

    In fact you’re the one acting like a pansy, by offering the hypocritical grub an out.

  82. sdfc

    You frequently call for people to be banned because at the end of the day you are a fragile twelve year old girl who resorts to name calling when you don’t get your way.

  83. .

    Actually sdfc I want you banned until you can show us you actually passed microeconomics I and II.

  84. brc

    A recant ala Galileo?

    Actually, given the trillions that have been wasted, a few recants would be a good start. An apology for the light bulb ban would be a good start for Turnbull, something along the lines of ‘I was wrong, it wasn’t a good idea, and it will not affect the climate one iota, and sorry about all the Mercury waste’.

    If the stake isn’t put through this green beast now, politicians are going to keep trying to revive it as a good idea.

  85. Brisbane Bob

    Tony should make Malcolm treasurer and Sinodinos finance spolesman
    Tony does not want to be opposition leader. He wants to be PM. Hockey and Robb whilst good in their own ways are not cutting through. I become incandescent when I hear Swan and Wong go on about coalition black holes when no one reminds them of their deficit and Labors pathological inability to spend less than they earn. Malcolm is articulate and would boost the coalition’s chances. There are voters in the middle who are attracted to Malcolm as every q&a shows Every great pm has had a great treasurer and yes they often have leadership tension but so what. Tony will be leader until the 2pp tanks or the election whichever comes first. If he wins, he will be leader for as long as he wants Malcolm would do a lot of good in that time With regards to the carbon tax/ ets. Even with a landslide Tony won’t be able to repeal it and will have to wait until a double dissolution is possible. Malcolm couldn’t oppose repeal if he wanted to be treasurerotherwise he’ll be left languishing in some meaningless portfolio . It’s simple really

  86. sdfc

    Actually sdfc I want you banned until you can show us you actually passed microeconomics I and II.

    So says the man who doesn’t seem to know our subsidies affect markets and who thinks negative real interest rates and deflation can co-exist.

  87. Sinclair Davidson

    Nobody is getting banned. Let’s get back on topic.

  88. Entropy

    There are voters in the middle who are attracted to Malcolm as every q&a shows

    Bwaahahahaa

  89. Infidel Tiger

    There are voters in the middle who are attracted to Malcolm as every q&a shows

    Abbott better promote Bob Brown to the Treasury portfolio if that is the criteria.

  90. .

    So says the man who doesn’t seem to know our subsidies affect markets and who thinks negative real interest rates and deflation can co-exist.

    I don’t know subsidies effect markets? Stop drinking. You can’t hold your liquor. Honestly what the fuck are you talking about?

    As for your other comment, uneducated dumbarse, do a search on the literature on the Fisher hypothesis breaking down during very tight or very loose monetary conditions (it happens, you are dead wrong). I also showed you the empirical data/evidence from the US and I am obviously correct. I know you read it but you are too cowardly/stubborn/tied to cherished nonsensical leftwing positions to admit you were wrong.

    The problem with you sdfc is you assumed every lecture note you slept through held like an immutable law of the universe and you can’t use a search function on Blackwell or SSRN.

    I would actually like you banned from drinking and voting.

  91. Gab

    WHy does Brisbane Bob sound like SoB?

  92. sdfc

    The Fisher equation “1+i = (1+r)(1+?)” says you are wrong. The US has not had deflation and a negative real interest rate. It is an absurdity in the absence of negative nominal rates. And even then the nominal rate has to be more negative than the deflation.

    I was hoping you had come to your senses.

  93. TerjeP

    Turnbull as Shadow Treasurer and then dinky di Treasurer would deprive Abbott of oxygen and constantly fuel leadership speculation. Ideal man for the role would be Arthur Sinodinos.

    Spot on. On both counts. Turnbull as treasurer would be bad for Abbott and Sinodinos would be terrific.

  94. .

    The Fisher equation “1+i = (1+r)(1+?)” says you are wrong.

    No shit dickhead but it can break down under very loose or very tight monetary conditions. Read the literature. Read the US monetary data and accept reality.

    Stupid c**t.

  95. JC

    SDFC,

    It’s tongue in cheek, you doofus. Go away and get drunk.

  96. Turnbull will not be treasurer again.

    He did not get into parliament to become Treasurer. If he is given the position he will use it for his next tilt at Abbot.

    Fact is, Abbott does not need his votes to control the party room. The conservatives are in the majority and will back him over Turnbull in any spill.

  97. .

    Get rid of him. He does not see the necessity of tax cuts.

  98. sdfc

    The US went into deflation in late 2008, not a negative real yield in sight.

    http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldYear&year=2008

    Can we leave this whole episode behind and never speak of it again.

  99. .

    You are ignoring data I posted before. You dishonest fuckwit.

  100. sdfc

    You have never posted data showing the US has ever had negative real interest rates and deflation. The TIPS yields I have linked to are proof.

    Spitting your dummy doesn’t change the facts.

  101. sdfc

    You will notice that JC has been silent on the matter. That surely must tell you I am correct.

  102. TerjeP

    You will notice that JC has been silent on the matter. That surely must tell you I am correct.

    JC rarely shuts up. So by that logic you must be wrong most of the time.

  103. JC

    You will notice that JC has been silent on the matter. That surely must tell you I am correct.

    I haven’t followed the argument, SDFC, but if I had to guess Dot is right and you’re drunk.

    What a stupid way to try and sway the argument your way. Pathetic.

  104. sdfc

    Terje

    Just because JC thinks I am wrong on any subject doesn’t mean I am.

    You’re usually smarter than that.

  105. wreckage

    I am not convinced that good businessmen make good Treasurers.

    It’s the temperament. Businessmen (equally, businesswomen) have to believe they’re better, smarter, and more all-round knowledgeable than average, and make a lifestyle out of ignoring advice.

    Turnbull made his money in finance and the dot-com boom. A grocer would make a better treasurer. What was the quote about economics trying to teach people exactly how much they don’t know? That’s not going to work on this guy.

  106. sdfc

    So JC the self proclaimed market guru thinks negative real interest rates and deflation can co-exist. What an embarrassing twat.

  107. JamesK

    Terje

    Just because JC thinks I am wrong on any subject doesn’t mean I am.

    You’re usually smarter than that.

    Wow.

    That’s even more pitiful than ur usual keynesian dross sdfc

  108. sdfc

    Nothing subtantial to add I take it James?

  109. JC

    So JC the self proclaimed market guru thinks negative real interest rates and deflation can co-exist. What an embarrassing twat.

    So lets dissect what SDFC is saying here that he thinks I am.

    Negative real interest rates is the rate of return expected to be received below the rate of inflation.

    SDFC suggests that I believe that is possible to have negative real rates and deflation, when in fact I don’t.

    The reason for him thinking this way is because he’s a Keynesian blowhard who thinks the lowest effective interest rate a central bank can go is zero and isn’t able to achieve much beyond that point.

    I have been nice to SDFC over this as I’ve explained to him that the only way this can happen is if the CB refuses to act beyond this point as they have numerous tools at their disposal and the central banks has virtually unlimited ability to print money if they so chose. Therefore it is a theoretically impossible scenario if a CB is doing its job.

    In short SDFC is a well cooked prime rib moron.

  110. JamesK

    Nothing subtantial to add I take it James?

    More substantial than an example of you being even more pitiful than even ur wanting norms?

    No

  111. sdfc

    Just a cry for attention then James. Tell us your thoughts on negative real interest rates and deflation.

  112. .

    You have never posted data showing the US has ever had negative real interest rates and deflation. The TIPS yields I have linked to are proof.

    So what? I’m saying the Fisher hypothesis isn’t valid under QE. I found several articles on Taylor-Francis last night also showing that the Fisher relationship can break down in times of really loose or really tight money supply.

    Applied Economics Letters

    Volume 4, Issue 11, 1997

    DOI:10.1080/758530649
    James E. Paynea & Bradley T. Ewingb
    pages 683-687

    This paper examines the Fisher hypothesis for a sample of less developed countries. Recognizing the possibility of spurious regression results, tests of the Fisher hypothesis are undertaken utilizing the Johansen-Juselius cointegration procedure. Of the nine countries studied, only Malaysia, Pakistan, and Sri Lanka provide evidence to support the full Fisher effect in which a unit proportional relationship exists between nominal interest rates and inflation.

    Applied Economics Letters

    Volume 3, Issue 1, 1996

    Is the Fisher effect robust? Further evidence

    DOI:10.1080/758525514
    Ky-Hyang Yuhna
    pages 41-44

    New international evidence exists on the Fisher effect in the United States, the United Kingdom, Japan, Germany and Canada over the modern (post-March 1973) floating exchange rate experience. Some puzzling data has been observed which suggests that the Fisher effect appears to be strong only for particular sample periods. It has also been reported in the literature that the Fisher effect is more likely in the long run, and that it is not common across economic regimes. This study sheds some light on these controversial issues taking advantage of more powerful tests for unit roots and cointegration. The findings for the Fisher effect contrast with previous results, especially those of Mishkin. The empirical results appear to accord with historical observations on interest rate movements in the five countries. Some important results are as follows: (1) the Fisher effect is not robust to policy changes; (2) there is strong evidence of a long-run Fisher effect for the United States, Germany, and Japan, but little evidence for the United Kingdom and Canada; (3) the short-run Fisher effect is only detected in Germany.

    Applied Economics

    Volume 29, Issue 8, 1997

    The Fisher hypothesis revisited: new evidence

    DOI:10.1080/000368497326444
    Yu Hsing
    pages 1055-1059

    The nominal interest rate is examined with the IS-LM model incorporating the Fisher hypothesis. Eight different interest rates are considered for different sample periods ending in 1993. When the Livingston survey data are used, the coefficients for the expected inflation rate, real quantity of money and government spending are significant in most cases. When the adaptive expectations model is applied, the coefficients for real quantity of money and government spending are insignificant in most cases. The Fisher hypothesis only holds for the federal funds rate or the AAA bond rate. The linear-form regression can be rejected at the 1% level in favour of the Box-Cox general functional form.

    The Fisher equation doesn’t make sense under ZIRP and inflation. It belies what interest rates compensates us for. How is printing money forgoing current consumption for some future consumption?

  113. Cory Olsen

    When will Malcolm Turnball take his rightful place as leader of the ALP/Greens Alliance?

  114. sdfc

    The Fisher Effect is simply that the real rate of interest is determined by real factors and not by monetary factors. With the real rate assumed to be stable, changes in nominal rates are driven by inflation expectations.

    That those authors have tested the hypothesis and found the relationship breaks down in certain cirumstances has nothing to do with your contention that real interest rates can be negative in the presence of deflation.

    The only way you can have negative real interest rates and deflation is if the nominal rate is more negative than the expected deflation.

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