Windfalls go to fossil fuels

Deep pockets don’t pay taxes

The saga of the mining tax in Australia is a great tale of vested interests versus average Australians. With an apparent deal for the repeal sewn up, it appears that the vested interests have won.

The mining industry fought hard against it right from the beginning, when the first super profits tax was announced by the Rudd Government. Despite being an economically well-crafted tax that would have had no impact on jobs or investment, the mining industry ran hard  against it, succeeding in rewriting the tax into something that was going to collect far less revenue.

It is the duty of mining executives to act in the best interests of their shareholders, so it is understandable that they wanted to pay less tax. But it is in duty of the government to act in the best interests of its citizens. It’s hard to see how the government has done that.

Australia’s minerals are owned by the people. The government has an important role in ensuring they get the best deal for these non-renewable resources. It’s pretty obvious the government is failing in that duty. It’s equally hard to fathom why the government values the largely foreign-owned mining companies over those that elected them to stand up for their interests.

The government has not just been content to transfer revenue from the budget to the mining companies at a time when they claim we have a budget emergency; they have also decided to take another swipe at low income earners.

The deal that the government put together with the Palmer United Party will also include the scrapping over the next few years of a number of spending programs. These include the low-income superannuation contribution, which helps low income Australians save for retirement. It will also see the eventual scrapping of the schoolkids bonus and income support bonus. 

These measures disproportionally hurt those on lower incomes.

The repeal of the mining tax closes a sad chapter in Australian political history, when powerful lobby groups with deep pockets are able to trump the best interests of average Australians.

You might think that mining companies were able to convince ordinary Australians that the mining tax was bad news and should be scrapped. While they did try, they were spectacularly unsuccessful. The mining tax has always had majority support of the Australian people. In the most recent poll the Australia Institute asked a representative group of Australians what they thought of the repeal. Only 16 per cent thought it should be repealed.

Shows what deep pockets can achieve in Australia today.

Careful what you wish for – the Warburton RET review

The government got the opposite of what they wanted with Warburton’s RET review.

Climate sceptic Dick Warburton has tied himself in an ideological knot over the findings of his Renewable Energy Target (RET) review. Unfortunately for him it had the same findings as just about every other study into the RET; that it will lower electricity prices, boost employment and funnel billions of dollars of investment into an emerging industry.

The review modelled five options, all of which reduced the amount of renewable energy the target would otherwise produce by 2020. From these five options, the review recommended two. The first was ‘grandfathering’ the RET, or closing the scheme to all new entrants. The second was limiting growth in the target to 50% of new growth in the demand for electricity. Since electricity demand has actually been falling for four years, this is also likely to restrict growth of the RET.

Despite clear terms of reference to lower electricity prices, the review’s own report shows that these options are the most costly to households.

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Graph: Cost to households of review options over 10 years of (‘reference’ is maintaining the RET)

It has been an article of faith to many in the Coalition that renewable energy is expensive and unreliable. The Prime Minster even said as much (“the renewable energy target is causing pretty significant price pressure in the system”) at the time the Warburton review was announced.

The review itself shows he is dead wrong. With those pesky facts getting in the way, the focus has shifted to the RET’s impact on the electricity market.

Mr Warburton has said that the RET is a subsidy of $22 billion. That sounds like the tax payer is footing a $22 billion bill but, unlike subsidies to the fossil fuel industry, it doesn’t cost the taxpayer a thing.

Those paying, and therefore the only losers from the RET, are fossil fuel generators. They’re the ones being squeezed out of the market and facing lower wholesale electricity prices because of additional clean energy generation. And they’re the big winners if the government adopts the recommendations from the Warburton Review – a windfall gain of more than $9 billion, according to the report itself.

Pricing fossil fuel generators out of the market is not a mistake, it’s a design feature of the RET to transition Australia’s energy production from fossil fuels to renewable energy.

And that is precisely what the RET is doing. We now see coal fired power stations sitting idle. While that might be an expense to those who’ve invested in coal fired generation, it’s a plus for all the rest of us.

The RET is creating jobs, creating investment, reducing emissions and reducing electricity prices. It’s good news for everyone except the fossil fuel generators. But then aren’t they the ones we’re trying to transition away from?

Only the Lonely

The Australia Institute released All the lonely people in 2012, updating previous research into the prevalence of loneliness in Australia. This research continues to gain interest, most recently with a piece in the Fairfax Sunday Life magazine. On Saturday, research author David Baker was a panel member at the Festival of Dangerous Ideas, discussing loneliness and depression in modern life.

Loneliness is felt in the disconnect between the relationships we want and need, and those we perceive we actually have. The ongoing interest in this research indicates loneliness is an important social and public policy issue.

Analysing a longitudinal dataset in which more than 10,000 Australians were asked a range of survey questions each year, including questions about social support and feelings of loneliness, we were able to look at the trend in reported experiences of loneliness between 2001 and 2009.

In any given year over this period, one in ten (9 per cent) of us felt lonely. For many this was only temporary, with few survey respondents classified as ‘lonely’ in subsequent years. However, the proportion of people transitioning into, and out of, loneliness increased in this period, with three out of ten Australians experiencing loneliness. Thirteen per cent of respondents experienced repeated bouts of loneliness.

There are a number of demographic factors that can increase the likelihood of being lonely.

People living in lone person and lone parent households were, on average, almost twice as likely to feel lonely as people living in couple households. Loneliness was greater for adults living with children. Couples with children were lonelier than couples without children. Although household type was found to be a key determinant of loneliness, there was no real difference between the levels of loneliness recorded in urban, regional or rural areas.

Men and women experience loneliness at different times in their lives. In the period studied, more men (36 per cent) recorded episodes of loneliness than women (29 per cent). The intensity of loneliness increases for men up to the age of 60 years before reducing again. In contrast, the level of loneliness that women experience is greater in their younger years and decreases in later life. Amongst younger people (aged 25-44), men were four times as likely to live alone and were more than twice as likely to be lonely.

The effect that social networking sites may have on the experience of loneliness is a new field of study. Australia Institute research found that the relationship between online socialising and feeling lonely is not straightforward. Amongst those surveyed about their use of Facebook, people experiencing loneliness reported having fewer online “friends” and were also less likely to consider online friends as real friends. At the same time, however, users of social networking sites who are lonely were more likely to report increased communication with family and friends. This finding suggests that some people experiencing loneliness may be endeavouring to access social support through online social networking sites.

For more information including the influence of income on loneliness see All the lonely people

TAI in the media

NSW miners are fighting the cane toad factor
Menzies, a failure by today’s rules, ran a budget to build the nation
Australia Institute’s David Ingles calls for universal age pension
WATCH: Richard on Sky’s The Nation 
 

Infographic

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General Enquiries

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jake@australiainstitute.org.au

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