Here were some good news items from this morning’s newspapers.
- The government is abolishing the Social Inclusion Board
- The government will tackle the coastal shipping issue (the Labor government imposed union cartel has pushed up costs dramatically). Granting permits to foreign flagged ships will sort out the problem quickly.
- The government will move to finalise a number of free trade agreements including with Japan, South Korea and China (what was the Labor government doing? Emmo – not a good start for your business)
- Small business to be in Treasury portfolio – ostensibly to deal with the red tape issue but hopefully to fend off the worst of the small business wishlist eg. unfair contracts
- Causing the CEFC to cease to operate (but see below)
- Prohibiting party officials from acting as lobbyists (see Clive, you were right on this topic, Santo eat your heart out).
On the CEFC, there is an article in the Fin in which the board and the green groups want the CEFC to continue to operate and the latter will take legal action to ensure this happens. In the meantime, the board is threatening to resign. Go on, make my day.
(It is interesting to note that the only major transaction that the CEFC has entered into thus far has been a refinancing of an existing project – so much for overcoming market failure, the financiers were just after a better deal guaranteed by government.)
The Abbott government’s plans to abolish the Clean Energy Finance Corporation could spark a legal battle with green groups and force the resignation of the CEFC board.
Green groups are considering court action, and the CEFC itself has sought advice, which casts doubt on whether it can legally comply with an interim directive to cease operations.
It has also emerged that during the election campaign, the CEFC offered the Abbott Coalition a compromise in which it would continue to invest in clean energy projects, consistent with the Coalition’s Direct Action climate policy, but received no response.
After being sworn in on Wednesday, Prime Minister Tony Abbott, as a priority, ordered the drafting of legislation to repeal the carbon tax to abolish the CEFC, a $10 billion statutory authority that provides loans to develop clean-energy projects.
The CEFC was funded from revenue raised by the carbon tax and the Coalition counted its abolition as a $545 million budget saving.
The CEFC must be abolished by legislation and, in the interim, its board has been instructed by Treasurer Joe Hockey to “suspend operations and cease making payments”.
Labor and the Greens will refuse to pass the legislation in the Senate abolishing both the carbon price and the CEFC, meaning Mr Abbott must wait until at least July 1, 2014, when the new Senate comes in, to pass the bills.
Greens leader Christine Milne furnished advice before the election which says the body can only be made to stop operating by legislation and “a minister who declined to carry out a statutory function, and whose action effectively prevented statutory bodies from carrying out their statutory functions, contrary to the will of the Parliament, would risk serious legal consequences, in addition to any legal action that could arise if lack of funding led to defaulting on specific contracts”.
CEFC chairman Jillian Broadbent wrote to Mr Abbott on August 5, just after the election was called, saying under the act, it was “not improper” for the CEFC to continue its operations “and apply the law as is presently in force”. Ms Broadbent said during the caretaker period of the campaign, the CEFC would not approve new investments but would “continue to fulfil its obligations in meeting its existing legal and contractual obligations, including in relation to payments”.