Ideas are the new roses this Valentine’s Day

It’s the month of love and we’re taking this opportunity to propose to you! We want to be your Valentine and not just for February. We’ve been doing some of our best work and trying to catch your eye, but the best research from the best people is expensive, so we thought it was time to just come out and say it – please be our monthly donor.

We’ve noticed how you like to keep the ‘independent’ in your think tank, and how you appreciate us taking on issues that others would prefer us to avoid (like how repealing the mining tax will end up slugging the poorest in our community, and how a free trade deal could see our government being sued for trying to protect the environment).

Our work is only possible through the generous support of people like you. One-off donations are wonderful (and we’re always pleased to receive them!), but it’s hard to plan for the future when you don’t know what it will bring. With you, we can nurture our ideas into full-grown, independent research papers. We can give a voice to the things you care about.

Say I do, and become a monthly donor. We’ll love you for it!

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Powering down your electricity consumption
Trading secrets
Who loses from the mining tax repeal?
Not all subsidies are created equally
A message from Richard

Powering down your electricity consumption

The rhetoric we’re hearing from the Abbott government about climate change isn’t matching our lived experience. As we swelter through heat wave after heat wave this summer, Australians have been actively reducing electricity consumption, reducing greenhouse gas emissions, and making an effort to keep the planet from cooking.

Research by Hugh Saddler for The Australia Institute has found that the trend of household energy use increasing every year for more than a century has been reversed. From 2005 electricity use remained static, and since 2010 electricity use has actually fallen every year.

From the report:

“All of the decline in consumption has in fact been at the expense of coal-fired generators, with the result that many are now barely profitable. Greenhouse gas emissions fell by 9.2 Mt CO2-e, roughly two per cent of Australia’s total emissions, in 2012 alone.”

Increases in electricity prices, which are largely the result of a massive increase in expenditure on infrastructure, have been met by the community with a more efficient use of energy. While electricity prices rose an average 17 per cent, household spending on electricity only increased by 2.4 per cent.

Households account for only 30 per cent of all electricity used but have been responsible for more than half the reduction in use. Clearly it’s time for business to step up and at least match the efforts of the community.

There have been many theories around why electricity consumption has dropped. The Australia Institute report found that the three largest factors contributing to the recent changes in demand for electricity are:

• energy efficiency programs
• structural changes in the economy away from electricity intensive industries
• the response of electricity consumers to higher prices.

Falling consumption of electricity is having major impacts on Australia’s total greenhouse gas emissions. At the same time as electricity consumption has been falling, electricity supplied by gas, hydro and wind generators have been rising. The total reduction in generation has come from coal – and especially black coal – generators, with the consequence that a number of smaller, older power stations have been withdrawn from the market. This is a win both for the environment and for clean power generators.

Download Hugh Saddler’s report Power Down here

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Trading Secrets

Imagine that an international company decides to build a waste dump just down the street from your home. Your community opposes it, but the Federal Government has already given them a permit to go ahead. It becomes an election issue; your local member is elected on a platform of preventing the dump and revokes the permit.

The corporation isn’t happy that it can no longer build its waste dump and sues the government for the future profits they would have made if they had been allowed to go ahead. Even if the government wins, it will still have to pay its own costs for international arbitration, and the bills run high.

This scenario isn’t as hypothetical as it seems. Under the Trans-Pacific Partnership (TPP) agreement currently being negotiated behind closed doors by the Australian Government, US, Japan and nine other countries around the Pacific, this outcome is a very real possibility.

The TPP’s so-called ‘Investor-State Dispute Settlement’ system would allow foreign companies to sue Australian governments which change laws in ways that reduce the profits of those companies. This system would be both additional to, and sit above, the Australian court system.

Put simply, if the Australian Parliament passed a new law, and the High Court confirmed that such a law was Constitutional, a foreign tribunal may decide otherwise and impose sanctions on the Australian government. Put even more simply, it gives international corporations more power than citizens, and more power than democratically elected governments.

A recent survey by The Australia Institute found that very few of us know about the TPP.

It also found:

• 87 per cent think free trade agreements should be made public before they are signed by the government.
• 67 per cent do not trust the federal government’s promise that free trade agreements won’t increase the cost of medicine.
• 76 per cent would not support Australia being prevented from mandating labelling of genetically modified foods.
• 64 per cent would not support a trade agreement that allowed Australian television stations to show fewer Australian made programs.

The TPP also has the potential to significantly increase the cost of medicines and our ability to regulate coal seam gas. America’s pharmaceutical industry association has flagged modifying programs for subsidising medicines as one of its key objectives. And in Canada, a US mining company is currently suing the Canadian government for the damages it believes it has suffered as the result of the Canadians wanting to collect more scientific evidence before agreeing to ‘fracking’ under a major waterway.

The TPP could seriously impact on Australia’s ability to make decisions based on the best interests of its citizens. It is time that the Parliament and public is given full access to the draft text of the TPP and an opportunity to debate its content before it is considered and signed by Cabinet.

To find out about the TPP and what it could mean for Australia, read our full report “A democracy deficit?” here or visit http://tppaustralia.org/ or http://aftinet.org.au/

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Who loses from the mining tax repeal?

In the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013, it’s the ‘other measures’ that really pack a punch, and they’re aimed at some of the most vulnerable in our community.

First to the winners, and you already know who they are. Yes, it’s Big Mining, and they walk away with $5.3 billion less tax to pay plus they will continue to receive $4.5 billion in government subsidies!

On the other side of the ledger, the list is much longer.

Workers on low incomes will be worse off as they’ll lose the low-income superannuation contribution. The philosophy behind this contribution is that high income earners receive a large tax concession for money they put through the super system but low income earners are often disadvantaged. Bill Shorten has noted that the contribution ‘benefits 3.6 million Australians on low and modest incomes, including 2.1 million women’. They’ll be around $37,700 worse off when it comes time to retire.

The Income Support Bonus will also go. It is a twice yearly payment to people on some income support payments, such as ABSTUDY, Austudy, Newstart Allowance, Transitional Farm Family Payment, and Sickness Allowance – some of the poorest people in Australia. There are some 1.5 million people at any time who rely on these payments and all will be affected.

Small business will lose some assistance measures in place to support them and ensure their ongoing viability, despite many of them having been disadvantaged by the mining boom which has made much of the Australian economy uncompetitive.

Parents eligible for Family Tax Benefit Part A or government income support will lose the Schoolkids Bonus if the MRRT is repealed, and all workers with super will be affected by delaying the increase in super contributions to 12 per cent.

You can read more about the winners and losers of the mining tax repeal here and check out our infographic here

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Not all subsidies are created equally

There has been a lot of talk recently about subsidies. While the current government is trying to look tough on corporate welfare by rejecting calls to subsidise the car industry and food processor SPC Ardmona (but strangely not Cadbury – someone in the Coalition must have a sweet tooth), the enormous subsidies given to the fossil fuel industry seem to be a protected species.

Subsidies to the fossil fuel industry are estimated to be around $10 billion per year and rising. At a time when the government is planning on spending money to reduce emissions through its direct action plan, cutting subsidies to fossil fuels is a no-brainer. Reducing emissions and improving the budget position should be seen as a win-win.

So it is great to see the mainstream media finally talking about the cost to the budget of fossil fuel subsidies for example here and here.

We’re particularly proud of this at The Australia Institute because we have been working hard for a number of years to bring this to the nation’s attention. Two years ago the extent and cost of fossil fuel subsidies was not a part of mainstream debate. Now discussion of this important issue is becoming more and more common. If the Treasurer is serious about ending “the age of entitlement” then the fossil fuel industry should be where he starts.

You can read more of the Institute’s research on mining here

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A message from Richard 

One of the most common questions I get asked is “how can you tell if your research makes a difference?” Well, some days it’s easier than others.

Last week SuperRatings released a report that estimated that Australians will pay billions of dollars less in superannuation fees thanks to the MySuper reforms which were first developed by The Australia Institute, recommended by the Cooper Review of Superannuation and passed by the Gillard government.

Indeed, the analysis by SuperRatings and reported in the Australian Financial Review, estimates that a person with $50,000 in super will see their fees fall from $932 to $593. When you realise that millions of people will make those sorts of savings in the coming decades you can see why the finance sector is often so critical of our work.

I was incredibly proud when I read those figures in the paper. TAI might be a small organisation but we really do have a big impact, not just on public debates but on public policy.

To all of you who provide financial support that keeps us going, thank you! And to those of you who are looking to support an organisation that really does make a difference please consider supporting us. I really do believe that we do ‘research that matters’.

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Click here to view our latest research and here for our recent media

P.S. Thank you for your support and for loving our think tank this Valentine’s Day.

General Enquiries

Tanya Martin Executive Assistant

02 6130 0530

mail@australiainstitute.org.au

Media Enquiries

Jake Wishart Senior Media Adviser

0413 208 134

jake@australiainstitute.org.au

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