The carbon tax and RET

The European Union has decided that CO2 emission reduction targets will no longer apply to individual EU countries but to Europe as a whole.

Why should Australia commit to reduce CO2 emissions by 25 per cent below 2000 levels by 2020 when France, Germany, the UK, Italy, Spain, Greece etc do not make such a commitment?

We should simply renounce the commitment on the basis that European countries have walked away from their commitments.

Or we should just state that we will join collectively with Europe to reduce the total emissions of Europe, Australia and the United States without any individual binding commitment applying to each country.

Separately Australia should change its approach with the carbon tax and renewable energy target which have (in conjunction with ‘gold plating’ of the electricity distribution network and other poor policies) led to Australia’s electricity and other energy prices becoming among the highest in the world. Less than 10 years ago we enjoyed energy prices that were among the lowest in the world – we have by government policies destroyed a competitive advantage. As I noted in an earlier blog, In Celebration of Energy:

Energy is one of the most important contributors to civilisation and high living standards. Without energy we would be nothing, existing as primitive savages facing the vicissitudes of life, in the natural state of man as Hobbes wrote in Leviathan.

The Abbott Government is already acting to terminate the carbon tax.

The easiest way to solve the RET problem is to declare that all forms of energy are renewable as is the fact. Coal, uranium, gas, petroleum are all renewable energy. Every moment that passes, new stores of uranium, coal, gas and petroleum are created. It is being renewed. We won’t be running out of these energy stores (arguably we are now past ‘peak car’ and petroleum use will decline over time).

That’s right, 100% of Australia’s energy is renewable.

About Samuel J

Samuel J has an economics background and is a part-time consultant
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85 Responses to The carbon tax and RET

  1. Andrew

    We’re creating new U235? Where? Excellent – that should really annoy the Greens

  2. nerblnob

    We won’t “run out” but we might reach a point of diminishing returns. But that will happen gradually (and over a much longer period than popularly imagined – generations) and real alternatives will emerge as the business case for them becomes clear. Trying to force immature and inefficient technology like solar and wind into the mass provision of energy is both wasteful and dangerous.

  3. Samuel J

    Andrew – yes, new elements are being created in the universe continually and especially when there is a supernova. These include U235, U238 etc.

  4. JohnA

    The easiest way to solve the RET problem is to declare that all forms of energy are renewable as is the fact. Coal, uranium, gas, petroleum are all renewable energy. Every moment that passes, new stores of uranium, coal, gas and petroleum are created. It is being renewed. We won’t be running out of these energy stores (arguably we are now past ‘peak car’ and petroleum use will decline over time).

    That’s right, 100% of Australia’s energy is renewable.

    Sounds like a political Press Release – a clarifying statement that puts you in the clear.

    But don’t ask “is it true”? The only evidence I have read along that line is in my search for “Is Oil a Renewable Resource?” which includes gas by implication/association.

  5. Squirrel

    I hope we’ll be hearing a lot about this in Question Time over the coming week(s).

  6. Ant

    Or how about saying the truth? That AGW, as it’s been sold by lying leftist ideologues for years, is a complete crock.

    So by all means make energy use as efficient as practicable, but stop the BS.

  7. cynical1

    Trees.

    What’s more renewable than trees?

    Yahoo, the greenies are gonna love this idea.

  8. incoherent rambler

    Abiotic oil. The greens hate the idea. If true, oil is renewable (sort of).

    And how could we forget that the universe is going to run out of energy and shrink back to a cold dark nothing, the precautionary principle says that we should tax this, now!

  9. WhaleHunt Fun

    Andrew – yes, new elements are being created in the universe continually and especially when there is a supernova. These include U235, U238 etc.

    FFS if a supernova goes off near enough for us to gather the Uranium we will all be DEAD.
    Uranium is not renewable. Coal is. you’ve just got to wait ten million years. But Uranium, no.
    Greenies, yes. As fuel they’re very wet and low calorific, especially the vegetarians, but the objective is more to consume them than to generate power.

  10. WhaleHunt Fun

    And how could we forget that the universe is going to run out of energy and shrink back to a cold dark nothing, the precautionary principle says that we should tax this, now!

    It’s not. The dark energy is forcing it apart. The end will be a cold dark expanded universe, trillions of years old where little occurs while the black holes slowly evaporate and eventually even perhaps the protons and neutrons may even slowly evaporate to leave no conventional mass. A vast black empty absolutely frigid nothing.
    Yes, Sarah Hanson -Dumb is the fate of the universe.

  11. JohnA

    WhaleHunt Fun #1201986, posted on February 24, 2014 at 11:24 pm

    Yes, Sarah Hanson -Dumb is the fate of the universe.

    Argh! You have just given SHY a reason to continue bugging us as the personification of our future. YUK!

    [PS: I don't agree that she is, but let's not give her any more silly ideas, eh?]

  12. Rob

    Australia must show leadership and keep the RET. The environment is more important than profits, jobs and agriculture. At least that’s what the wankers from organisations like Fairfax & Westpac constantly tell us. Organisations that claim green credentials should be levied with special taxes that pay the entire cost of the RET for the entire country. The good thing is that these companies will clamour to pay the tax because they love to advertise their “good citizenship”, it can also be levied on unions and political parties, which union doesn’t want higher taxes for the privileged?

  13. Blogstrop

    Or, we could be like China and open a new coal-fired generator as often as we like. Seems to do them no harm in the left dominated media.

  14. grumpy

    The Russians are doing a lot of research into the theory of abiotic creation of crude oil. (It is not dead dinosaurs but is created by processes deep in the Earth’s crust). Required reading on the benefits of renewables is from Matt Ridley.
    http://www.rationaloptimist.com/blog/why-renewables-keep-running-out.aspx

    Tell all that to your greenie mates and sit back to watch the exploding heads.

  15. gabrianga

    Remove the “no go” areas for exploration and mining, on and off-shore, created by Governments of all shades at the behest of our “environmentalists” and Australia would have no energy problems.

    Building a few dams and constructing a couple of pipelines could also help solve our drought problems allowing our food growing farmers to produce every year without fear of years of drought.

    Labor and the Abbott Government must get together to rid Australia of the Latter Day Luddites in green clothing.

  16. cohenite

    Abiotic oil is a really interesting concept. Consider where the Solar System’s largest hydrocarbon deposit is: Titan.

    As far as I know there were no great forests on Titan nor Titan dinosaurs in the past which have now decayed to oil reserves.

    For those who are interested here is a technical discussion of abiotic oil which comes from magma processes not from decaying vegetation over geologic periods.

    It is interesting that Japan is now mining methane hydrates from the ocean floor. These are readily convertible into oil products.

    The world is awash with energy. Yet the greens, AGW Nazis and the left generally want to ration it. They are Luddite bastards who hate humanity.

  17. .

    No, monty and SFB told me it was a crackpot theory, therefore every time I corrected them of economics and psephology, I must have actually been wrong.

    Thus, Titan was once home to flora and fauna.

  18. cohenite

    Excellent; that would mean the dinosaurs of Titan were…titanic.

  19. incoherent rambler

    The world is awash with energy. Yet the greens, AGW Nazis and the left generally want to ration it. They are Luddite bastards who hate humanity.

    A near perfect summary of the dark age we live in.

  20. Elizabeth (Lizzie) B.

    All energy is renewable? Good. Of course it is. And there are many new energies to come.
    Let the kids learn that at school please and stop worrying them witless with Green fantasies of doom.

  21. Rabz

    we have by government policies destroyed a competitive advantage

    So forgive me for not taking labor/greenfilth dunderheads seriously when they start bloviating about the preposterous, anti-scientific, fact and evidence free horse shit known as catastrophic human induced climate change.

    Big polludahs, indeed.

    These people are insane.

  22. Mater

    The ‘Green’ issues are very important but let’s not overlook an essential truth when looking at costs.
    The electricity supply industry is as unionised as the car industry but without the ability to be moved offshore.

  23. .

    There is no myth. The carbon tax makes electricity more expensive. Anyone who argues otherwise is sociopathically dishonest.

  24. cohenite

    numbers mate, you’re a complete idiot. The fucking carbon tax raised over $4 billion, half of which was paid by the electricity producers, although many more companies than first envisaged were hit.

    Alcoa, Holden, Ford, Toyota, SPC, all hit by the tax, all closed.

    People who argue that the tax has had no effect ignore the fact that the tax was meant to make electricity so dear that the renewables could then compete.

    Its complete bullshit; a tax is designed to raise electricity and then its defenders have the gall to say its had no effect.

    If you look at this stuff logically your brain will explode or at least turn into a leftie because this is how they ‘think’; no logic, no sense, no meaning.

  25. .

    cohenite – anyone who says that cognitively dissonant nonsense and believes it is sociopathically dishonest.

    No need to lose your head over their duplicity.

  26. Louis Hissink

    Dot,

    I thought the word “stupid” would be enough to describe them.

  27. Anyone who argues otherwise is sociopathically dishonest.

    The sociopaths are those who chant three word slogans that abandoning it will make any meaningful difference to the cost of living, at the same time advocating privatization which will have the opposite effect.

  28. incoherent rambler

    I thought the word “stupid” would be enough to describe them.

    Facts, evidence, science and empirical data are ignored by RET/Carbox tax supporters.
    They instead quote; feelings, popular(at Fairfax) vote “science”, misrepresented or manufactured data and missing evidence.

    Some amongst us would call this obfuscation, others would call it lying. Some like yourself would say “stupid”.

  29. jupes

    So Numbers you claim the ‘Carbon’ Tax doesn’t make electricity dearer.

    In that case what is the point?

  30. incoherent rambler

    Well done jupes. I am sure he feels the element 6 tax is the right thing to do.

  31. .

    1. Privatisation has made utilities cheaper. The PC and Hilmer reports found this at the outset of the agenda of Keating and the PC confirmed this whilst Howard was PM. measures of deadweight loss such as lost days waiting for connections went down significantly.

    2. The tax makes things more expensive. This psychotic dishonesty of the left these days to deny this basic fact ought to make them unfit for office.

  32. lotocoti

    I hope you realise jupes, our friend will now argue that the absence of a comma after case will completely invalidate any point you had, have or will ever make.
    (Did anyone else notice our friend was 47 across in crossword #9939 from the Oz?)

  33. brc

    We are nowhere close to peak car yet. India and China both aspire to have levels of car ownership matching the rest of the world. Both are manufacturing one car every 10 seconds currently. Peak car is a long, long way off.

    I don’t agree with the premise of the article – the statement should be that renewables have not contributed to any reduction in co2, but have materially contributed to higher costs. Therefor they should be scrapped. There’s no need at all to try and be clever.

  34. Privatisation has made utilities cheaper.

    Put simply, that is bullshit.
    Consumers and government lose, and producers gain – that has been the experience in Victoria (and in the UK).
    It is about ideology, not economics.

  35. .

    Privatisation has made utilities cheaper. Credible reports from the Productivity Commission confirm this.

    Blaming the privatisation for the cost of new taxes and the accommodation of counterproductive “renewables” is simply delusional. Ignoring the frequency of blackouts prior to privatisation is another example of psychotic dishonesty.

  36. Privatisation has made utilities cheaper.

    Again – ideological bullshit. Reference your reports.

    The productivity commission report (26 June 2013) states inter alia -

    State-owned network businesses have conflicting objectives, which reduce their efficiency and undermine the effectiveness of incentive regulation. Their privately-owned counterparts are better at efficiently meeting the long term interests of their customers.

    And uses that statement to recommend –

    State-owned network businesses should be privatised.

    Without offering any economic argument to support that statement of ideology.

    For example -

    It is unclear from these data whether private network businesses are strictly more cost efficient
    than state owned networks, as the increased use of contractors may account for the decreased
    use of in house labour among private businesses. What is clear is that the state owned network
    businesses appear to differ from private businesses in terms of hiring and procuring.

    Chapter 6 – The Efficiency of Networks – p 259.

    Read the report, and explain where it makes definitive statements that privatisation is the solution.
    Then look at the history in Victoria and the UK.

  37. .

    If someone has read the reports and doesn’t understand them, I feel sorry for them.

    Privatisation has made utilities cheaper.

    The carbon tax, along with the RET, made electricity prices rise for generation and network cost reasons.

  38. The Beer Whisperer

    Or, we could be like China and open a new coal-fired generator as often as we like. Seems to do them no harm in the left dominated media.

    But plenty of harm to people. I’ve been to Xian, and I held my wife’s hand so I wouldn’t lose her in the smog.

  39. incoherent rambler

    Modern coal fired plants trap almost every piece of particulate. They are very clean. Possibly cleaner than gas (depends on your coal source).
    The China issue seems to be a mix of a) old plant b) who gives a donkeys about the operations manual c) what regulations?

  40. If someone has read the reports and doesn’t understand them, I feel sorry for them.

    Yes, you have a comprehension problem.

    Privatisation has made utilities cheaper.

    That is a glib statement of ideological opinion with no basis in fact.

  41. .

    Privatisation has made utilities cheaper, the PC has shown this to be true repeatedly.

    The carbon tax and RET has made electricity prices increase for generation and network cost reasons.

    Both of these statements are true and have been proven with empirical data.

  42. incoherent rambler

    Don’t worry dot. Ignore the zit.
    Next it will be “97% of economists agree …”

  43. Bruce of Newcastle

    Numbers is talking about privatisation of the power industry failing even as we’ve shown on the other thread that the cost blowout in power is entirely due to the government enforced RET and carbon taxes.

    Numbers, do you realise that the links you keep invoking disprove your own thesis?

    As for whether privatisation makes things cheaper, that can be debatable depending on how it is done. But it always makes things better. Governments cannot run enterprises for crap! They always produce inefficient outcomes compared to the private sector – because governments have no competitor and private owners do. If the private owner screws up they can have their asset removed from them, so they are always forced to perform reasonably well, even if they are monopolists. But government owned enterprises have no one to make them perform, so they fill up with dead wood and incompetent rent seekers.

    If you don’t believe me, go try buying a roll of toilet paper in Venezuela. Or for that matter try for yourself the wonderful power supply reliability in that country.

  44. .

    Their privately-owned counterparts are better at efficiently meeting the long term interests of their customers.

    And uses that statement to recommend –

    State-owned network businesses should be privatised.

    This seems logical. However, some pitiful people object to logic.

    Without offering any economic argument to support that statement of ideology.

    Is public debate in Australia really that strained where we have to prove that “lower cost” or “lower price” for the retail market is the same as “cheaper” or “long term interest of customers”…

    Poor fella, my country. It would be great if there were less innumerate fellows demanding that self evident truths (a smaller number is less than a bigger number, for example) be proven for the approval of their mathematically and logically challenged “minds”.

    How these people are entitled to vote is inexplicable.

  45. incoherent rambler

    Did we mention government enforced adoption of smart meters?
    Costly and a dud to boot!

  46. The carbon tax is a contender for the stupidest policy Australia has ever had.
    It exponentially drives up the price of everything in regional areas.
    For-what-reason?

    Membership of the ALP should be a notifiable mental illness. It is difficult to comprehend that people can be so stupid, yet able to get their pants on of a morning.

  47. Privatisation has made utilities cheaper, the PC has shown this to be true repeatedly.

    The carbon tax and RET has made electricity prices increase for generation and network cost reasons.

    Both of these statements are true and have been proven with empirical data.

    You should have no problem providing that data. Go for it.

  48. If you don’t believe me, go try buying a roll of toilet paper in Venezuela.

    Hilarious.
    Only on the Cat is the price of toilet paper in Venezuela a predictor of the benefits of privatisation of electricity generation and retailing in Australia .
    Glibertarianism at its finest…..

  49. .

    Privatisation has made utilities cheaper, the PC has shown this to be true repeatedly.

    The carbon tax and RET has made electricity prices increase for generation and network cost reasons.

    Both of these statements are true and have been proven with empirical data.

    Numbers has also unwittingly provided evidence of the above.

    QED.

  50. Mater


    The absence of detailed analysis of the impact of distribution network costs on electricity prices has lead to a relatively uninformed debate on appropriate reform measures. Too often the evidence and analysis prepared by governments, regulatory agencies and the media is based on information emanating from New South Wales (NSW) or Queensland. However, time series analysis of the components of electricity prices reveals that the contribution of distribution networks in Victoria and South Australia is well below that reported by PC, AEMC, government and media.
    The PC states that:
    … nationwide, retail electricity prices rose by around 50 per cent in real terms from June 2007 to June 2012. The rising costs of the electricity network … have been a major driver of these prices. Network costs are around 40–50 per cent of an average household’s electricity bill, so any cost pressures on the network have a major impact.
    The PC then provides data on changes to NSW household electricity bills which demonstrate a 130% increase in the network charge component of the bill from 2007/08 to 2012/13.3 It is unclear to the Businesses whether the data for this graph is sourced from the retailers, and represents their recovery of input costs from the retailer’s customer segmentation for pricing purposes, or whether it has been derived from the average of the DNSPs’ tariffs charged to the retailers, or from another source such as the standard offer tariffs. Further transparency would better inform debate with the public and industry stakeholders.
    Unfortunately, the implications of this generalisation are misleading, given that it unfairly depicts outcomes seen in Victoria and South Australia. The Businesses acknowledge that there have been significant increases in the retail price path over the past decade but note there is insufficient differentiation between the observed outcomes for DNSPs from different jurisdictions in the PC’s Draft Report. The inference from the PC analysis that the Victorian and South Australian DNSPs are inefficient and are the primary cause of retail price rises in these States is demonstrably incorrect.
    Victorian data
    Figure 1.1 below shows the time series of the two prime cost components, retail4 and distribution network costs, components from the cost stack for a small residential customer using the average of the CitiPower and Powercor Australia standard offer tariffs in real terms (2012 dollars).5
    For CitiPower and Powercor Australia distribution network costs have fallen in real terms in the eleven years from 2001 to 2012. In 2012, the distribution network charges at $183 pa were still $44 pa lower than they were at $227 pa in 2001. This reduction in cost to customers is one indicator of increasing business efficiencies.

    Bob, remind me again which states still own their Distribution Businesses.

  51. Both of these statements are true and have been proven with empirical data.

    Provide this “empirical data”.
    Otherwise, what you posted is an opinion, and opinions are like arseholes. Everyone has one, and they’re full of sh**.

  52. incoherent rambler

    And trolls are like farts. Ignore them and eventually they will waft away.

  53. Pyrmonter

    Poor fella, my country. It would be great if there were less innumerate fellows demanding that self evident truths (a smaller number is less than a bigger number, for example) be proven for the approval of their mathematically and logically challenged “minds”.

    “Fewer” perhaps.

    The unfortunate reality is that reformist politicians of the generation 1985 – 2000 tended to emphasise the “benefits” of releasing capital from one form of public investment to permit its use elsewhere, either as debt reduction or alternative government outlay. Now there seem to be almost no reformists – Labor having turned its back in 1996, most of the Coalition in 2001.

  54. cohenite

    The carbon tax is not the only cause of increased electricity prices; renewables generally and specifically and indirectly through the cost of infrastructure to cater for the renewables also come into play; see:

    http://catallaxyfiles.com/files/2012/07/carbon-battle-1.jpg

    From this we can 29% of electricity prices are from the tax and AGW policies generally. “Poles and wires” are 51% and much of that has been to set up the infrastructure for wind and solar installations. I don’t know how much of that 51% is due to renewables but if we assume 50% then 57% of electricity prices are due to the tax and AGW policies.

  55. I don’t know how much of that 51% is due to renewables but if we assume 50% then 57% of electricity prices are due to the tax and AGW policies.

    An assumption of that nature is the perfect example of the aphorism that an assumption makes an ass of u and me.

  56. The absence of detailed analysis of the impact of distribution network costs on electricity prices has lead to a relatively uninformed debate on appropriate reform measures.

    Absolutely.
    Hence the catch cry “privatise” based on opinion and ideology.
    Privatisation simply increases the opportunity for spivs, pimps and ticket punchers to milk consumers.
    That’s the experience in Victoria and the UK.

  57. Only on the Cat is the price of toilet paper in Venezuela a predictor of the benefits of….

    Not just on the Cat.
    The toilet paper shortage (and the black market price) is quite a big deal in Venezuela too.

  58. .

    Mater and numbers have both provided empirical data, to wit:

    Privatisation has made utilities cheaper, the PC has shown this to be true repeatedly.

    The carbon tax and RET has made electricity prices increase for generation and network cost reasons.

    QED., ad inf.

  59. Gab

    Only on the Cat

    are you allowed to comment. You’ve been banned from most other sites.

  60. You’ve been banned from most other sites.

    Like most of what you post, Gab, that’s rubbish.
    The only site that won’t post my comments is Bolts.
    That happened because he posted a graph which proved the opposite of what he was arguing.
    I’ve stopped posting on Michael Smith’s and Pickering’s site, after receiving death threats.
    It doesn’t bother me, but I’m away from home a lot and it’s not fair on my family.
    Apart from Brian of Moorabbin (who claims to be a copper) people generally don’t operate like stalkers on this site.

  61. .

    I’ve stopped posting on Michael Smith’s and Pickering’s site, after receiving death threats.

    Does anyone believe this bullshit artist? Is anything he says actually true?

  62. Mater

    Numbers,
    You’ve got your circular reporting going full steam ahead. Sinc puts up an extensive blog yesterday pointing out the short comings of John Quiggins’ report, and you link to this very report as evidence against his conclusions.

  63. .

    Sinc puts up an extensive blog yesterday pointing out the short comings of John Quiggins’ report, and you link to this very report as evidence against his conclusions.

    Utterly moronic, frenetic idiot with nothing better to do.

  64. Sinc puts up an extensive blog yesterday pointing out the short comings of John Quiggins’ report, and you link to this very report as evidence against his conclusions.

    Actually, he didn’t say what you claim he did. Read it again..

    He agrees with Quiggin on a number of points –

    A couple of thing where we agree:
    Economists, at least when they were thinking clearly and speaking honestly, were as one in rejecting the most popular political reasons for privatisation: as source of cash for governments or a way of financing desired public investments without incurring public debt.

    Sinclair’s final conclusion was -

    Based on his argument to date, I think it is premature to suggest that there has been a record of failure in privatization.

    You are saying that privatization is the answer to soaring utility costs.

    Sinclair is saying that he doesn’t necessarily agree that privatization has failed.

    There is a great gulf between these two positions, and you have failed to provide any empirical evidence to support privatization.

    Try again….

  65. Utterly moronic, frenetic idiot with nothing better to do.

    I don’t know if he ever had “it”, but he’s been losing it for some time. Descending into muttering eccentricity.

    Nothing he says can be relied upon, as he is not objective, instead he’s a highly subjective bigot with little (if any) scientific rigour applied. Some of the stuff he has written stretches credulity so much that you’d wonder how anybody could write it & maintain a straight face. Turns out he’s deadly serious.

    He’s quite gullible too.

  66. Nothing he says can be relied upon, as he is not objective, instead he’s a highly subjective bigot with little (if any) scientific rigour applied.

    Well there you go. If I disagree with you I’m a subjective bigot.
    Here’s some more bigotry -

    Privatization in the UK –

    Railways

    The national rail system was dismantled for privatisation. Railtrack took over responsibility for track and signalling, train services were franchised to train operating companies who lease the rolling stock from three rail leasing companies. Maintenance, depots and freight services were also privatised to other companies.

    Railtrack PLC, was placed in administration on 7 October 2001 and replaced by Network Rail, a non-profit company, which owns and maintains the tracks, signals, bridges and 2,500 stations. Network Rail stopped outsourcing maintenance and transferred 16,000 maintenance staff, over 5,000 road vehicles, 600 depots and 11 training centres to in-house provision. The South East train franchise was terminated in 2003 following years of poor performance and the company operating the London-Edinburgh franchise defaulted in 2006. Poor performance and overcrowding continues on many services despite large public subsidies.

    Hospital cleaning

    The NHS market testing programme led to a series of contract failures and reduction in cleaning standards in the 1983-2000 period (Public Service Action, 1983-1997). By 2002 some 52% of domestic services contracts were outsourced with an estimated value of £94m according to an unpublished NHS outsourcing study. However, standards had declined to such an extent that by 2004 an additional £68m had been invested in higher standards, revised frequencies and best practice guidance to control infection, thus eliminating so-called savings.

    British Energy

    The privatised nuclear power generator, supplying 20% of Britain’s electricity, had to be bailed out by the government to the tune of £410m in 2002 to meet the company’s debts. A restructuring deal was agreed in which the company’s creditors agreed a debt-for-equity swap leaving the existing shareholders with just 2.5% of the shares. British Energy was delisted from the London Stock Exchange.

    Bus services, prisons and social care

    The deregulation and privatisation of municipal bus services, new private prisons built by public private partnerships and the transfer of social care to private companies and voluntary organisations were all declared ‘successful’ because they achieved ‘savings’. But staff wages were cut between 15% – 25% with longer working hours and frequently no pensions..

    Public Private Partnerships fail information technology

    Following a series of major failures Public Private Partnerships have not been used for information technology projects since 2003. A hundred outsourced public sector information technology contracts have suffered long delays, cost overruns and system failures.

    Strategic partnership failures

    Three large long-term local government contracts (14%) for corporate services with a £685m value have failed since 2005. Two contracts, Bedfordshire County Council and West Berkshire Council, were terminated and a 1,000 staff transferred back in-house and a third, Redcar and Cleveland, has been substantially reduced. In addition, a £100m education contract to manage the education service in the London Borough of Southwark was also terminated because of poor performance.

  67. .

    ‘How to win class war’ is the first book which comes up.

    This is a communist website we were linked to. They have no credibility until they admit to horrors such as the Holodomor and Lenin’s Hanging Order.

  68. FFS, go to a private school and learn to read for comprehension.
    Nowhere did I say “anyone who disagrees with me is a subjective bigot”.
    I said the person being referred to, when confronted with a choice between a political philosophy, and intellectual rigour, will always choose to promote the political philosophy.

    Scientific fail. Intellectual fail. That is all.

    Nothing to do with his bigotry, which shows very readily when the right spot is scratched.

  69. Bruce of Newcastle

    I love how Numbers only ever takes a small snippet out of a comment and ignores the rest. He never answers the question, never accepts or even looks at the data provided and if pressed says Look a Unicorn Toilet Roll!

    Numbers, I really don’t care what you say, but do you like breathing sand every day when the data is quite clear? We showed Prof Quiggin was wrong. We gave evidence that government control of the means of production causes inefficiency. Catastrophic inefficiency in the case of the glorious Bolivarian Republic of Venezuela. You choose not to address any of that. Well I hope you enjoy your intimate inspection of the underside of a desert because mate, you have head-in-sand syndrome bad.

  70. Mater

    Sinc: ‘Based on his argument to date, I think it is premature to suggest that there has been a record of failure in privatisation.’
    1735099: ‘Put simply, that is bullshit. Consumers and government lose, and producers gain – that has been the experience in Victoria (and in the UK)’

    I said Sinc identified the ‘short comings’ of the Quiggins Report. I didn’t say he rejected it.
    I did say that you are linking to it as evidence that consumers and governments lose. Sinc’s conclusion indicates that this is not necessarily so.
    I never said that privatisation is the answer to soaring utility costs, I simply linked to a report which clearly shows productivity gains and cost reductions HAVE resulted.

  71. brc

    Its interesting to me that privatization was almost a necessary input to carbon taxing. If the generators were all still state owned, essentially the pitch would have been ‘we’re going to put up the cost of power, steel and aluminium to stop you lot from using so much of it’. Not am electoral winner. Instead they thought they could demonize ‘big polluters’ and hope the public went along with it.

    As it turns out intentionally raising the cost of energy isn’t a vote winner at all, no matter how you try and position it. Not that bill shortern seems to have internalized that yet.

    A lot of attention gets paid to how much the government got for their infrastructure when they sold it, but that, to me, is less important than making sure generators are subject to market forces in order to promote efficiency. In theory, a government owned generator shiuld be able to out-compete private generators. But that never happens because of the tendency of government owned corps to be captured by meddlers and people with a different motive to the one the orgnaisation is ostensibly focussed on.

    The frequency of strike related power outages during the government owned days precludes the government from really ever doing it properly.

    Still, to the topic at hand. The real problem is that the market is not allowed to operate, as always. A real market would have bankrupted the renewable generators in the first fiscal year. Because that was obvious, a special-needs class was created for the renewables, so that they wouldn’t have to be marked in the same way as the rest. Eliminate this, restore certainty for investment and the never-ending upward trend of prices would at least stabilise, if not start t reverse in real terms.

  72. Privatization has failed in Malaysia, Indonesia, and internationally.
    Advocating for privatization is delusional if it is based solely on ideology, as it is here -

    We gave evidence that government control of the means of production causes inefficiency.

    I’m not sure why you’re using the royal plural, but nothing posted on this thread or Sinclair’s thread is “evidence”. It’s all projection based on dogma.

    Sinclair poked a few holes in Quiggin’s report, but didn’t make a case for privatization based on empirical data. He analyzed Quiggin’s data and made some inferences. An inference is not empirical data.

    What I have posted are studies after the event which show that generally the effects are negative for the bulk of consumers, and positive for the oligarchs.

  73. Privatization has failed in Malaysia, Indonesia, and internationally.

    Shorter list:
    What actually has worked in Malaysia, Indonesia, et al.

  74. .

    People who object to privatisation should be honest and step up and admit they want to nationalise banks, rail, ports, roads, water, communications and power assets.

    Then they need to explain why they aren’t arguing for communism.

  75. Then they need to explain why they aren’t arguing for communism.

    You have a one track mind.
    You can’t discuss anything (including economics) without reverting to binary left-right conceptualizations.
    Us and Them, Goodies and Baddies, Cowboys and Indians.
    The world is far more complex than that.
    The only ideology of value is no ideology.

  76. .

    People who object to privatisation should be honest and step up and admit they want to nationalise banks, rail, ports, roads, water, communications and power assets.

    Then they need to explain why they aren’t arguing for communism.

    Will no one advocating an anti privatisation position answer these points?

  77. cohenite

    An assumption of that nature is the perfect example of the aphorism that an assumption makes an ass of u and me.

    Right and you’re Thomas Love fucking Peacock? Aphorism my arse.

    The fact is the carbon tax ripped over $4 billion from the economy, mainly from electricity producers. The tax was a crucial factor in the closing of the smelters, car producers and SPC. The chart I gave you showed AT LEAST 29% of the price of electricity was DIRECTLY caused by AGW factors. Noone knows how much of the power and poles was due to AGW but given the taxpayer funded surge in wind and solar farms financed through the taxpayer funded clean energy funds to the tune of $13 billion plus state based initiatives like the FIT scheme which gobbled up another $2 billion in NSW alone the % of the power and poles of 25% devoted to AGW expenditure sounds pretty conservative.

    Only a jaded fanatic could pretend those non-assumptions were irrelevant.

  78. 2dogs

    Privatization has failed in Malaysia, Indonesia, and internationally.

    Privatisation has worked really well in Russia since 1990. They went from having a GDP per capita of about half the world average to now above average.

  79. Jim Rose

    does this make the targets harder or easier?

  80. Bruce of Newcastle

    The fact is the carbon tax ripped over $4 billion from the economy

    $7.6 billion last financial year. China’s carbon tax was zero. Guess where all the aluminium production went when it closed down here? This is so beyond sanity that the ALP and Greens should be put in padded rooms and straight jackets before they do more harm to us.

  81. sabrina

    Alcoa actually benefitted from the carbon tax, if an article published in the AFR is right.
    Carbon tax or not, aluminium production would have gone out of this country anyway, we can not compete with Indonesia or China or India on cost.
    Having said that, introduction of this tax was unnecessary; the sooner it goes, the better it is, it has turned out to be a bonanza for accountants and lawyers.

    Enjoyed reading the robust exchanges between one cat and other cats, nice after dinner reading.

  82. .

    Carbon tax or not, aluminium production would have gone out of this country anyway, we can not compete with Indonesia or China or India on cost.

    Yes…maybe.

    Productivity AND labour costs are what matter – unit labour costs.

    Remember, ours are 90% higher than wages due to regulation, compulsory levies and taxes.

    With our quantity and quality of coal reserves, we should be the lowest cost producer at scalable volume.

    It is alarming that people do not blame the carbon tax or RET etc for this at all.

  83. nerblnob

    Natonalised industries inevitably run out of cash to modernise because they spend it all feather-bedding their employees.

    Then the only way to modernise the infrastructure without bankrupting the country is to privatise.

    The consequences of that sequence of actions provide innumerable statistics for proponents or opponents of privatisation (i.e proponents of nationalisation) to use in whatever way they see fit.

    What needs to be measured is performance against what would have happened otherwise, (subject to conjecture, but one can look at trends domestically and elsewhere) rather than against what happened in the past.

    As for carbon tax , of course it put energy prices up . That was its intention. To reduce CO2 emissions by making people use less energy from hydrocarbons, the main source of energy.

    It boggles the mind to think anyone can pretend otherwise and expect to be taken seriously.

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