The Wrap with Richard Denniss

Bring on 2023! It’s going to be a huge year for the country, and in turn for the Australia Institute. The Parliament will soon debate the only policy to tackle our biggest polluter’s emissions the Albanese Government plans to introduce in this term of office. To say it’s a modest effort would be an understatement. As Chris Bowen himself has highlighted, the Safeguard Mechanism is recycled Coalition legislation. “It’s even got the same name.”

While Labor’s proposed Safeguard Mechanism will impose some obligations on our biggest polluters to try and reduce some of their emissions, the scheme’s design means that polluters can rely on so-called ‘carbon offsets’ to meet 100 percent of their emission reduction obligations.

Even more concerning is that there’s nothing in the Safeguard Mechanism to safeguard Australia from the 118 new gas and coal projects seeking approval. Then there’s the research that shows that most of the carbon credits are dodgy. While people think that carbon credits represent things like new trees being planted, the vast majority actually represent accounting tricks and promises not to chop down trees that were never in danger of being cleared.

That’s why we are kicking off the year with our Climate Integrity Summit in Parliament House on February 15. We’ll be joined by leading experts and key parliamentarians to talk about whether a climate policy that allows new coal mines to be built can really be called a climate policy, the lack of integrity in the carbon credit market, and the revolving door between the people that sell carbon credits, the people that regulate them and the fossil fuel industry whose expansion plans rely on the legitimacy that ‘carbon offsets’ give them.

As the Summit concludes, we’ll turn our attention to Labor’s second budget which is expected to be delivered in early May. Needless to say, we will be using our research to make the case to the Parliament and the public that the Stage 3 tax cuts are bad for the economy and our society. Treasurer Jim Chalmers has made the point that we need to strengthen our economy if we are to strengthen our democracy, but unfortunately the Stage 3 tax cuts will fuel inequality, make it harder to invest in high-quality services, and in turn, drive the divisions that already exist in Australia. The research of our Nordic Policy Centre makes clear that the countries that collect the most tax and spend the most money on services don’t just have the strongest democracies and happiest populations, they have the strongest economies as well.

And then there’s COVID. While no one wants to go back to lockdowns, as I wrote recently COVID killed more people last year than lung cancer, breast cancer, prostate cancer, car accidents and drowning combined.

Australia’s performance on vaccination, testing, mask-wearing and air purification are all lagging well behind best practice, so perhaps it’s no surprise that our daily case numbers per head of population, are well above those of the United States, United Kingdom, New Zealand, and the average for all rich countries.

While it’s obvious why policy makers may feel fatigue when it comes to the challenges of keeping Australia safe from COVID, and it’s obvious why they have become tired of fighting with the fossil fuel industry about their coal and gas expansion plans, it’s not at all obvious how ignoring the biggest challenges Australia faces will help solve them.

This year our research will be focused on the big problems we need to solve, no matter how tired some people are of being asked to solve them.

— Richard Denniss

Big Stories

The Safeguard Mechanism and the dodgy carbon credit market that could undermine Australia’s emissions reductions

While the Australian Government is reforming the Safeguard Mechanism, a policy to regulate emissions-intensive projects, a major loophole for polluters is unlikely to be closed. Will polluters have to reduce their emissions, or be given free rein to buy carbon credits to offset their emissions? An inquiry into the integrity of Australia’s carbon offset industry recently claimed to find no substantial issues, yet failed to provide evidence to prove to the public and credit buyers that carbon credits are legitimate. It also recommended a broad suite of changes to the carbon market’s regulatory architecture, indicating the existence of problems worth fixing. If the Safeguard Mechanism gives polluters unrestricted access to dodgy carbon credits to balance their emissions, Australia’s emissions will increase and we risk missing our 2030 climate change target.

Read more in this explainer from Alia Armistead and Polly Hemming.

COVID remains a major public health crisis – so why isn’t the government talking about it?

If a pandemic killed 15,000 people & nobody seemed to notice was it really a pandemic? In Australia last year COVID-19 killed more people than lung cancer, breast cancer, prostate cancer, car accidents & drowning combined, so why isn’t the Government talking about it?

Read Richard Denniss’ latest piece in the Monthly.

Fairer and cheaper tax policies than Stage 3

Since the Stage 3 tax cuts were legislated by the Morrison Government in 2018, the world has changed radically. While inflation had made everyday Australians poorer, the rich are getting richer. Yet the government continues to stand by their promise to deliver them.

The Parliamentary Budget Office recently released a ‘build your own budget’ tool, a useful tool in showing just how expensive the Stage 3 tax cuts will be – and fairer, cheaper alternatives.

To recap, the Stage 3 tax cuts involve:

• Removing the $120,000 to $180,000 tax bracket.
• Increasing the top tax bracket threshold from $180,000 to $200,000.
• Reducing the marginal tax rate faced by the $45,000 to $200,000 tax bracket from 32.5 per cent to 30 per cent.

In effect, this will deliver enormous amounts of money to the highest income earners; 77% of the benefits will go to the richest 25%.

So just how much will they cost the Budget? The PBO’s tool shows that Stage 3 tax cuts are going to cost about $300 billion over nine years. To put this into context, in their first year they will cost $17.7 billion, more than we spend on the PBS ($16.4bn), childcare subsidies ($11.4bn), or public universities ($10.7bn).

For about the same amount, the government could raise the tax-free threshold from $18,200 to $27,100 and still have enough money to raise the top tax threshold from $180,000 to $200,000. This would also actually provide a better tax cut to middle-income earners than Stage 3.

But we can go further than just looking at tax cuts. The PBO’s tool also allows you to change the amount of jobseeker, disability support pension, and the aged pension.

The government could cut the 32.5% tax rate to 30% (for those earning between $45,000 and $120,000), raise the top tax threshold from $180,000 to $200,000, and raise JobSeeker from $668 to $1025 (which is where the Raise the Rate campaign is aiming to get it), and it would still cost less than the Stage 3 tax cuts.

The tax cuts were a bad economic idea in 2018, and they’re an even worse idea now. They should be scrapped, and if you agree you can add your name to our petition, or share it with a friend. And if Labor is determined to deliver tax cuts, there are far more equitable and sensible ways to distribute this massive amount of money.

As long as Australia fails to transition away from fossil fuels, its climate policy is meaningless

The Chubb review of Australia’s talks optimistically about ‘carbon credits’, but we wouldn’t need so many credits if we weren’t building so many new sources of pollution.

It’s tough for politicians when the science and the voters demand big cuts in fossil fuel use, but the fossil fuel industry wants to keep on growing. That’s where carbon credits come in. So what’s the problem?

The short answer: science and economics.

Read Richard Denniss’ piece in the Guardian.

Cotton industry bulldozing ahead in NT despite questionable benefit

Amid reports that unique savanna has been unlawfully cleared in the NT to make way for a cotton industry, acting Chief Minister Nicole Maniston defended the industry, “scratching her head” about opposition to the developments, and urged people to look for the benefits.

So we did.

Our research found the benefits in terms of jobs created and tax revenue raised to be severely lacking.

“What is the potential employment? Very low. What are the potential tax payments and revenue implications for the NT government? Near zero or negative,” said Rod Campbell.

Subsidising the cotton industry with free water and publicly-funded processing is bad economics and bad environmental policy. It is highly unlikely that a subsidised cotton industry represents a net economic benefit to Territorians.

The Quote

“You’re not idiots,” Conservative UK PM Rishi Sunak delivered a scathing assessment of the case for tax cuts in the current economic climate, underscoring the bizarreness of the Australian Government’s persistent support for Stage 3.

“I want to cut your taxes. But the reason we can’t is because of all the reasons you know. You’re not idiots. We had a massive pandemic…we’ve got this war going on which is having an enormous impact on inflation and interest rates.” 

“The worst thing I could do is promise you a bunch of things that sound great, but ultimately just make the situation worse.”

The Win

The Australia Institute’s Centre for Sex & Gender Equality has been a driving force in raising awareness of, and criminalising stealthing, a form of sexual assault involving the non-consensual removal of a condom during sex. Last year, the Centre’s director Chanel Contos convened a roundtable on stealthing with Attorneys-General and Shadow AGs, legal experts and academics that has led to real change. While the Centre’s report on stealthing, authored by Sienna Parrott and Dr Brianna Chesser from RMIT, shed light on the lack of public understanding of the issue, and the inconsistency in its criminalisation across Australia’s jurisdictions.

Marie Claire‘s latest edition ran a feature article on stealthing, featuring both Chanel and Sienna, helping to drive awareness of the recent changes to cirminalise the practice across several states, as well as the issue of stealthing itself.

The Bin

Greg Sheridan delivered a perfect example of structural misogyny with his response in The Australian about Jacinda Ardern’s resignation.

“All [Jacinda Ardern’s] economic instincts were bad, all her strategic instincts were bad. She had a great desire to undo productive economic reform and remove or shut down the engines of economic growth for what should be a nation of limitless opportunity.”

Crikey reported that despite The Australian’s foreign editor’s interpretation, New Zealand has just set a new record for its annual GDP growth. Sheridan truly earned himself a place in the Bin with his ‘woke’ strawman argument.

“She was young, unmarried, had a child in office and her partner was a stay-at-home dad, and she spoke the woke dialect with a native fluency.” 

Get Involved

Make fossil fuel producers pay a climate disaster levy

Over the weekend we saw Auckland hit by devastating floods after its wettest day ever recorded. It’s a stark reminder that the costs of climate change will continue to increase. That’s why we’re calling for fossil fuel producers to pay a climate disaster levy of $1 per tonne of CO2 for all coal, gas and oil produced in Australia, reducing the economic impact on our communities. You can help by adding your name to our petition and sharing with a friend to get the word out.

What’s On

Climate Integrity Summit: Bringing together leading experts to discuss and address integrity risks that could jeopardise Australia’s emissions reduction policies.
Wednesday, 15 February 2023 at 9:00 am AEDT.

Speakers include:

• Dr Bill Hare, CEO of Climate Analytics and member of UN High-Level Expert Group on the Net-Zero Emissions Commitments of Non-State Entities
• The Hon Anthony Whealy KC, Former judge of the NSW Court of Appeal
• Allan Fels, Former Chair, Australian Competition and Consumer Commission
• Professor Andrew Macintosh, environmental law and policy expert at ANU College of Law
• Karrina Nolan, CEO, Original Power
• Pamela Avusi, Program Coordinator at Forcert, an NGO based in Papua New Guinea (PNG)
• Senator Sarah Hanson-Young, Australian Greens Spokesperson for the Environment & Biodiversity
• Senator David Pocock, Independent Senator for the ACT
• Dr Sophie Scamps MP, Federal Member for Mackellar
• Dr Monique Ryan MP, Federal Member for Kooyong
• Kieran Pender, Senior Lawyer, Human Rights Law Centre

Nordic Talks: The Value of a Free Press

Norway is number one on the World Press Freedom Index, while Australia dropped 14 places in 2022 due in part to its highly concentrated media landscape.

Our webinar will discuss what Australia can learn from Norway in how to support public interest journalism.

Thursday, February 2 at 6:00 pm AEDT. Free, registration essential.

Nordic Talks: The Value of a Free Press

Thank you for supporting the Australia Institute. We’re excited to take on some massive issues this year and we couldn’t do it without supporters like you.

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