Malcolm the merchant banker creates a sub prime market in renewable energy assets

With the announcement of the Clean Energy Innovation Fund (CEIF), Malcom Turnbull has killed several birds with a single stone.  He has

  • warmed the cockles of the hearts of the renewable rent-seekers who are such a valuable source of campaign finance
  • conned all the ABC/Fairfax/Guardian journalists into thinking he has actually increased government spending when actually, “The $1 billion Clean Energy Innovation Fund will be established from within the CEFC’s $10 billion allocation”. Though at Reneweconomy Giles Parkinson has twigged
  • Retained the subsidised $10 billion Clean Energy Finance Corporation (CEFC) and the Australian Renewable Energy Agency (ARENA) about $200 million a year but previously budgeted to more than halve; this is on top of the renewable energy subsidy for up to 33,000 gigawatt hours a year of (mainly) wind energy, plus about 12,000 GWh of rooftop solar, meaning an annual subsidy of about $3.5 billion.
  • Locked in his personal commitment to spending ever greater resources on overriding the energy market and replacing all those ever so twentieth century coal plants with twenty first century renewable energy that cannot be made reliable and cost three times as much.

But, sadly, it is not all smoke and mirrors.  Malcolm, being a merchant banker, has learned from the Goldman Sachs hymn book about how to leverage equity investments with loans.  Banking on a rock solid government guarantee to an investment, lenders will roll up to offer finance to the Clean Energy Innovation Fund.  That way the CEIF can attract loan funds of maybe four times the value of its $100 million a year in government capital.

And so we have created our very own version of sub-prime securities that, even with the renewable subsidies, could not justify loans from prudent bankers.  With the government offering a subsidy through the renewable program which trebles the price that commercial energy obtains plus a subsidy to the investment capital through CEFC and CEIF what could go wrong?

Perhaps the sheer power of government controlling the energy market as well as its preferred source of energy will mean the negative value-adding renewable investments are secure.  But we are placing a large chunk of the nation’s investment resources into venues that are unproductive.  At the very least this is a dilution of the capital productivity so essential to the better paying jobs we all seek. Add to this the penalty that businesses have to pay for the dearer energy being mandated and we will need a whole lot of Malcolm’s much vaunted high tech revolution that he announced in his Innovation Statement a few months ago.

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73 Responses to Malcolm the merchant banker creates a sub prime market in renewable energy assets

  1. feelthebern

    Horse bolted.
    You don’t like paying a gazillion bucks for parking at Sydney Airport?
    Offset that by being a part owner.

    You don’t like billions of dollars being pissed away & our children’s children being lumped with the debt?
    Participate.
    The clean energy rorts are everywhere.
    Get thee to the trough.

  2. Bruce of Newcastle

    I sad months ago that I was watching Turnbull and if he did anything on fraudulent CAGW that would be it. It is now it. His party is a party of the left just like the Greens and the ALP. I won’t allow my vote to pass to them. Wake me up when the Libs come to their senses.

    Vote #1 informal.

  3. Louis Hissink

    Lending money to operations that a prudent banker would not do in a zillion years means those operations will go belly up, put into bankruptcy and the bank(s) becomes mortgage in possession as it were. As the banks are essentially tools of government, Marc Faber would be on the money when he interprets these scenarios as the means by which private property is transferred from the private sector to the public via the mechanism of bankruptcy.

    It’s socialism by monetary manipulation instead of at the end of an AK-47, or whatever the favourite persuader is these days.

  4. Elizabeth (Lizzie) B.

    A rort is a rort is a rort.

    Malcolm keeps on getting worse and worse.
    This is not politics, it is sheer lunacy for the Liberal Party.
    On top of Unsafe Schools, it is a total sell-out to Labor and the Greens.
    Hope the ALA is putting up someone in Wentworth. Vote Mal out.

  5. A Lurker

    Vote #1 informal.

    Only in the HoR
    Vote below the line #1 ALA or FF in the Senate, followed by other pro-Australia parties and Indies.

  6. Fred Lenin

    I wonder if any financial trusts based in the Cayman islands ,owned by orominent Australians ,have any shares in ” renewable subsidised energyv” ,who have “invested ” in Australia ? The Sole purpose of money in places like the Caymans ,is Tax evasion . All Australians who posess such accounts should be investigated . Its another if those crooked scams promoted by the crooks of the corrupt law trade .

  7. ACTOldFart

    You had better get used to a lot more of this sort of thing. Turnbull, moral and political vacuum and opportunistic chancer that he is, will steal as many Labour-Greens policies as he can between now and the election. That way he ‘appeals to all parts of society’ largely by selling out everything that decent and frugal government should stand for and racking up an even more gigantic bill for future taxpayers.

    My guess is that about the only thing he won’t go spineless on would be turning the boats back, but even there, if an opinion poll told him otherwise, he would (yet again) sell out. He is already making noises about billions to the States for hospitals, just stand by folks for lots and lots more between now and June 2nd.

  8. Habib

    Does the fanclub still think Current Chairman Dear Leader had headed off the cats at the pass, and is herding them in the right direction?

  9. Megan

    The Usurper is a dead set tosser, and for those previously in doubt, this latest brain-fart proves it.

    #istandwithbruce #vote1informalHOR

  10. johanna

    Complete waste of potentially productive investment funds and lots of ticket-clipping for the finance industry.

    That’s Malcolm to a tee.

  11. Jo Smyth

    He is just looking after his future business interests. He is a forward thinker. Btw, did you know most of the world is at war.

  12. val majkus

    Huh! I’m not voting for him … and I’m in the New England … who’s the alternative? Tony Windsor … nope … might have to vote informal

  13. Dave R

    After this raft of decisions (did they go through the Liberal caucus?) Turnbull now probably does not even qualify as a Liberal.

    Conservative voters now have a big problem in how not to vote for Shorten, but give Turbull a major kick in the teeth, or even remove him. The answer is to vote for other conservative candidates, such as independent liberals or Nationals who will give the Liberals their preferences. Do not vote for any of the 55 Liberals who voted to knife Tony Abbott.

    If only Tony Abbot would form a conservative party all would be easy.

  14. Dr Faustus

    You get a very clear picture of exactly how sub prime these [ahem] ‘investments’ will be when the beneficiaries are worried about the quality of the innovation:

    Staff within ARENA are believed to be horrified by the changes, particularly the decision to bring a halt to funding to start-up technologies and research. They say the focus on the new fund, and the need for it to get a return on investment, will effectively rule out a whole category of funding requirements.

    How many early stage renewable energy projects out there are in a position to one, pay back the money, and give a return on investment,” said one.

    This is what happens when a political slogan escapes from the laboratory.

  15. James in Melbourne

    Why, oh why, was Abbott so freaking terrible, to allow this to happen?
    Had he been a half-decent PM, we would not have been sold out like this.

  16. Art Vandelay

    This will be a thoroughly liberal government. It will be a thoroughly liberal government committed to freedom, the individual and the market.

    Malcolm Turnbull, 15 Sept 2015

    And to think that some commenters here actually believed him.

  17. Ragu

    Very interesting post. I’ve forwarded it to my broker

  18. gabrianga

    Oh! won’t Goldman’s be happy with Lord and Lady Waffle ?

    This prick ,Lord W. set the stage for a rent seekers bonanza many moons ago and the braindead in his own Party either didn’t wake to, it or even bought into it.

    To think “Conservative” stalwarts like Howard urged Lib Party voters to support Turnbull and admonish Abbott in the same breathe is ugly, very ugly.

  19. Tom

    the CEIF can attract loan funds of maybe four times the value of its $100 million a year in government capital.

    So just exactly what is our liability? Sounds to me like it could $400 million p.a. on top of the $100m p.a. we’ve already committed through the CEIF to pay for the carpet-bagging spivs’ homes, Mercs, yachts, etc. Or will the $400 p.a. of other people’s money be pissed against the wall by the union muppets who control the super industry?

    Will every project be fully audited by the Auditor-General on our behalf so that when the shit inevitably hits the fan we will have a precise accounting of how much Lord Waffle has cost us and whether he should face charges?

  20. Leo G

    And so we have created our very own version of sub-prime securities that, even with the renewable subsidies, could not justify loans from prudent bankers.

    Sub-Prime Minister leveraging his government’s reelection or post-parliamentary career prospects?

  21. Motelier

    Big fans on the coastline of the Fraser Coast, Wide Bay and Burnett Coast.

    Lots and lots of prime beach front property that is exposed to South Easterly winds during the day and nice and calm of a night time.

    Now. I must hurry. I am sure I can get the BIL Professor Green to help me with the submission. It is sure to be a success. Those other big fans around the world that are either not working or just chopping up flying wildlife have just been placed in the wrong location.

    The advantage of my location is that I will donate the land underneath the big fans as parkland.

    Wins all round.

    Doncha see?

  22. old bloke

    Weren’t the Nats supposed to keep the bastards honest? Is Barnaby asleep at the wheel or has this con just slipped past unnoticed?

  23. Squirrel

    “…..warmed the cockles of the hearts of the renewable rent-seekers who are such a valuable source of campaign finance….”

    All I heard today was complaints about how it’s not enough, and besides, it’s all an evil con job – so clearly a billion bucks of warmth is not nearly enough.

  24. GK

    Heard all day Greg Hunt state how this will make money for the government (all i have ever read is green schemes failing). He was always avoiding answering the question on explaining the 8% return the government will make. And when finally pressed on the positive return there was no examples given, just a quick “Treasury modeling showed”. As usual useless interviewers does not pick this up.

    PS. Heavan forbid a scheme actually works, you really think they will manufacture in Australia?

  25. Ross B

    Imagine Turnbull driving policy if he secures an election win in his own right.

  26. egg_

    Sub-Prime Minister leveraging his government’s reelection or post-parliamentary career prospects?

    Which could be in the very near future?

  27. Aussiepundit

    Does the fanclub still think Current Chairman Dear Leader had headed off the cats at the pass, and is herding them in the right direction?

    My position was that Abbott needed to be removed asap, and Turnbull was the only viable replacement at relatively short notice.
    That was absolutely true at the time, and isn’t less true in hindsight.

    And of course, the full scale of the emergency going on behind the scenes is now public knowledge (even if some diehard Abbott loyalists refuse to believe it).

    As for Turnbull’s performance since then, yes, it’s rather disappointing.

  28. Joe

    As for Turnbull’s performance since then, yes, it’s rather disappointing.

    As for Turnbull’s performance since then, yes, it’s rather disappointing was predicted by various cats from the beginning of the farce.
    We were warned the member from Goldman Sachs would gift money to the embezzling class. Followed through, he did.

  29. Bruce of Newcastle

    Aussiepundit – Bishop was ready, willing and more-or-less able. On hindsight she would’ve been a genius compared to Lord Mal. I’s said over and over that with her as the softy in front of the camera, and Morro to hold the strings, the Libs could win the election and run Abbott policies. Since Turnbull has now been caught pulling swifties on his own Treasurer my original suggestion is looking absolutely ace.

  30. H B Bear

    Aussiepundit – Bishop was ready, willing and more-or-less able.

    Let’s not forget Bishop’s outstanding performance as Shadow Treasurer for those few weeks. Madame Defarge is the trannie Lord Downer of the Libs – best left flying around on the cocktail circuit and only appearing when the hard work is done.

  31. Bruce of Newcastle

    Bear – You are appraised of the phrase ‘travelling shrine’? The Japanese liked to use it to describe the Emperor. They were careful people, and never gave the Emperor any actual power, thereby allowing those in the rear echelons to do that hard work whilst the population adored the front man. Or in my suggestion, woman. Sadly not to be since Lord Mal is carefully erasing any possible alternatives to his enlightened rule.

  32. Paul

    “Malcolm, being a merchant banker, has learned from the Goldman Sachs hymn book about how to leverage equity investments with loans.”

    Not for nothing do they continually meddle in the affairs of Sovereign Nations to install their own in positions of power.

  33. H B Bear

    That doesn’t sound like any PM since Hawke in his Old Jellyback phase, who happened to have one of the deeper and wider talent pools in Cabinet.

    You are kidding yourself if you think that an Australian government is going to function like that.

  34. Entropy

    Nats will no doubt be busy working out how producers can upgrade their watering points with copious OPM out of this scheme. Actually, now I think about it, that might actually be a good use of his scheme.

  35. Dr Faustus

    Imagine Turnbull driving policy if he secures an election win in his own right.

    Thank you RossB. I’m trying not to do exactly that.

    We are in a bad position when an ALP Opposition, wholly-owned by the union movement, starts to look like a sensible alternative. Ultimately we are relying on the good sense of AWU/CFMEU’s base to realise that all this ‘progressive’ shite is shite – and issues instructions in the usual way.

    I think that will cost at least 3 elections and $550 billion.

  36. The GREEN thing. It was always the main reason to resist this preening turkey. You could add that he appears to know nothing (“I thought the Saudis were your friends”), makes no sense (but if he ever finishes a sentence, maybe), has never been elected (except by the doctors’ wives and luvvies of Wentworth), schemes relentlessly for his team of 1, promises abstract nouns…and doesn’t do anything.

    Apart from that, he got where he is by sucking up to the harpies and finger-waggers of the ABC, when he should have been giving them new careers at Uber.

  37. Lloyd Dobler

    old bloke
    #1984779, posted on March 23, 2016 at 7:29 pm
    Weren’t the Nats supposed to keep the bastards honest? Is Barnaby asleep at the wheel or has this con just slipped past unnoticed.

    After Barnaby made Uncle Mal sign a legally binding agreement between the Libs & the Nats in order to secure government, Uncle Mal realised that ideologically he doesn’t like the Nats & would much rather have di Natale as DPM & The Greens as the new Coalition partner.

    If you think I’m joking look at what he’s just announced.

    Much more Green than Nat.

  38. Gab

    The GREEN thing. It was always the main reason to resist this preening turkey.

    You ain’t seen nothing yet. If he wins the next election, he will go full-on Greentard.

  39. Token

    You ain’t seen nothing yet. If he wins the next election, he will go full-on Greentard.

    This election really needs to be a bloodbath for the Labor-Lites, especially the NSW party which does not deserve to be anywhere near government.

  40. Token

    After Barnaby made Uncle Mal sign a legally binding agreement between the Libs & the Nats in order to secure government, Uncle Mal realised that ideologically he doesn’t like the Nats & would much rather have di Natale as DPM & The Greens as the new Coalition partner.

    If you think I’m joking look at what he’s just announced.

    Mal always like Lefty Dave of the Not so Nasty Tories. What you are saying is the Tory / Lib Dem coalition.

    Lord Waffler is never, ever original. He’s always ripping off other people’s ideas and repackaging them as his.

  41. Dave Wane

    But we are placing a large chunk of the nation’s investment resources into venues that are unproductive.
    Isn’t that pretty much what ALL Australian governments (local, territory, state and federal) continually seek to do in various other ways, including this latest MT nonsense?
    Big Government and all that goes with it is of course the favoured way of all governments to throw vast sums of taxpayer’s and borrowed funds at unproductive crap.

  42. With all due respect I cannot see how an informal vote in the HoR helps anything. I prefer sitting member LAST, telling them beforehand, and seeking to convert 100 others to go and do likewise.

  43. wreckage

    Well, that’s the current government done.

    Better gear up for an ALP win at the coming election.

  44. Tim Neilson

    Chris
    #1984908, posted on March 23, 2016 at 10:02 pm
    Voting informal and telling them why you’re doing so may get the message through. Nothing else will.
    Putting Labor/Greens ahead of the Coalition will just lead the imbeciles and spivs to announce that the Coalition needs to go harder left. (They’ll either be too stupid to understand or too dishonest to admit that a vote for a conservative/libertarian minor party, with Coalition preferenced last, is actually a message to steer away from the left). Informal is the way to go, with one proviso. If your sitting member is a National or an Abbott supporter maybe you should vote for them.

  45. sabrina

    This move will buy votes………………..unfortunately.

  46. AP

    That snivelling little shit Greg Hunt was there looking up to Maocolm like gollum when this was announced. That bloke is first-class beta-male.

  47. AP

    Who did know that the budget was being brought forward if the Treasurer did not?

    Goldman Sachs?

  48. Iren

    I prefer sitting member LAST, telling them beforehand, and seeking to convert 100 others to go and do likewise.

    That is certainly so in my case in Wentworth, although I’ll probably still put the Greens dead last, just on principle, with Maocolm in his natural place, right next to them.

  49. memoryvault

    With all due respect I cannot see how an informal vote in the HoR helps anything. I prefer sitting member LAST, telling them beforehand, and seeking to convert 100 others to go and do likewise.

    And the message you send is . . . ????

  50. Notafan

    The matching luggage emergency.

    It’s 2016; if Margie wasn’t happy she’d have packed up and left.

    Talk about flogging a losing horse.

  51. MareeS

    There has to be a market, and I won’t be going there with my money.

  52. cynical1

    Imagine Turnbull driving policy if he secures an election win in his own right.

    It may be President Turnbull by Christmas…

  53. Herodotus

    I’m waiting for the Clean Energy Agility Fund.

  54. A Lurker

    As for Turnbull’s performance since then, yes, it’s rather disappointing.

    Disappointing is one word to describe it.

    Malign, malignant, malicious, malware, maladministered, maladjusted, malaise, malevolent are others, but you get my drift.

  55. Aussiepundit

    Why didn’t Abbott abolish this?

  56. Mr Skeletor

    Aussiepundit should get a job at the Australian with his Abbott666 fuckwittery.

    He’s gone mate, and the asswipe you replaced him with is proving to be a bigger dud than Rudd.

  57. A Lurker

    Why didn’t Abbott abolish this?

    Why didn’t Abbott do a lot of things?
    I guess you need to ask the man himself.
    My own assumption is that part of the reason being that not only was he fighting enemies in front of him, but he was also being undermined by enemies behind him; add in the Christian mindset of turning the other cheek and Abbott was incapable of a. viciously defending himself, and b. going on the offensive and brutally eliminating his foes. In other words he never possessed the killer instinct.

    If I can refer back to my termite analogy – Abbott would have made an excellent ‘carpenter’ but what Australia needed was an ‘exterminator’. Trouble is, Australia no longer has an ‘exterminator’ or a ‘carpenter’ but we’re instead being asked to elect the Queen Termite herself – Turnbull.

    Btw, Trump on the other hand does possess the killer instinct, and also lacks the mindset of turning the other cheek – which is why Trump is proving to be so popular to so many people.

  58. Aussiepundit

    I didn’t replace him. The Liberal caucus replaced him.

    I didn’t expect this, though.

  59. Bruce of Newcastle

    Just in time for Turnbull’s ‘renewable’ energy brainwave one of the biggest ‘renewable’ energy companies is about to go bankrupt:

    SunEdison Plummets On Imminent Bankruptcy; Axiom Sees “The Beginning Of The End” And 85% More Downside

    Tell me about that 8% return on investment again Mr Turnbull.

    Meanwhile as I mentioned last week the giant Google-owned Ivanpah solar thermal plant is teetering on the edge, and Obama’s list of wasted subsidies to failed green companies just gets longer and longer.

    But what’s another billion or ten wasted?

  60. goatjam

    Finally the real Malcolm emerges. Just in time for an election too.

  61. ella

    “I didn’t replace him. The Liberal caucus replaced him.

    I didn’t expect this, though.”

    Two key words in moral philosophy are ‘intention’ and ‘know.’

    For example: If you ‘intend’ to undo Operation Sovereign Borders and allow millions of Muslims to flow into Australia, and you ‘know’ that Australians will be raped and murdered, then you are corrupt.

    The extent of Turnbull’s corruption is being revealed to you, Aussiepundit.

  62. Cannibal

    And the Australian ETS platform continues to be bolstered but never mentioned. Would we find significant Mal and GS money sitting there?

  63. sabena

    And now he has decided to reappoint Rod Sims to the ACCC!

  64. John Michelmore

    old bloke

    #1984779, posted on March 23, 2016 at 7:29 pm

    “Weren’t the Nats supposed to keep the bastards honest? Is Barnaby asleep at the wheel or has this con just slipped past unnoticed?”

    Oh damn someone else has noticed; voting Nationals is not the solution to the “Liberal” problem, it only prolongs it. Unless of course Johnny Depps dogs were so important that it will save Australia from this lunacy!!

  65. John Michelmore

    Token

    #1984870, posted on March 23, 2016 at 9:12 pm

    “After Barnaby made Uncle Mal sign a legally binding agreement between the Libs & the Nats in order to secure government,”
    What the hell else is in this agreement that makes the Nationals so useless at achieving much for their constituency? Or is it that they are just under performers?

  66. Cannibal

    What the hell else is in this agreement that makes the Nationals so useless at achieving much for their constituency?

    I thought Truss signed the agreement, and then departed the leadership. The Nationals got a billion dollars for (and I quote from the glossy Nationals pamphlet delivered to my mailbox yesterday) the National Stronger Regions Fund. Apparently we’re all much stronger out here as a result. My aging body doesn’t seem to have got the memo.

  67. mundi

    Australia has always been about government wasting money.

    I was just reading about the first fleet and it’s settlement. 27 private families grow half as much crop as 5,000 convicts, 150 employees, and over 500 corps men. And that was achieved despite the government ruining many families by forcing them to do things like jury service on Norfolk island for 6 months at a time, or just flat stealing their livestock and grain when supplies ran low.

    Intact nothing of what the government did in farming ever reached self sufficiency or net export, something the first settlers achieved in 18 months. The country only established itself by taxation on the successful settlers.

  68. herodotus

    Re lurker on Abbott:

    In other words he never possessed the killer instinct.

    You might be forgetting his work to get Pauline Hanson jailed, and his tough approach to industrial relations.
    But that was then.

  69. Habib

    As for Turnbull’s performance since then, yes, it’s rather disappointing…that’s rather polite for predictably shithouse, or Gillard-Rudd proportions.

  70. JohnA

    I am a bit late to this but:

    Bruce of Newcastle #1984564, posted on March 23, 2016 at 2:56 pm

    I sad months ago that I was watching Turnbull and if he did anything on fraudulent CAGW that would be it. It is now it. His party is a party of the left just like the Greens and the ALP. I won’t allow my vote to pass to them. Wake me up when the Libs come to their senses.

    Vote #1 informal.

    Well, it’s off to Magrathea for you then BoN.

  71. Andrew

    Does the fanclub still think Current Chairman Dear Leader had headed off the cats at the pass, and is herding them in the right direction?

    My position was that Abbott needed to be removed asap, and Turnbull was the only viable replacement at relatively short notice.
    That was absolutely true at the time, and isn’t less true in hindsight.

    Bullshit. What was the emergency that meant A666ottSatan needed to go right there and then? Oh that’s right, he was about to win Canning 57/43 and disprove the lies coming from…Maolcolm.

    There was absolutely no rush. Do another Budget, then call a July election with A666ott not recontesting. If the polls are still bad he will probably stand aside.

    Virtually everyone with basic cerebral function said Maolcolm would be dreadful – lurching to the Greenleft to appeal to HisABC’s set. Virtually everyone said if he MUST parachute in to save an election, do so with as little time to fuck up as possible and use his honeymoon. Now there’s destroyed finances, destroyed honeymoon and destroyed donor base. Given 3 more months add destroyed border protection to that.

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