Wednesday, October 24, 2018

Today by Paddy Manning

Fair dinkum alarming
The Coalition could open the taxpayer up to massive compensation


In the weeks leading up to the Victorian election of 2014, the then premier, the Liberal Party’s Denis Napthine, signed contracts with a Lend Lease–led consortium to build the $7 billion East West Link tollway. It was a controversial project, opposed by Labor and the Greens, and one of the biggest issues in the looming election campaign. Daniel Andrews and Labor duly won the election and cancelled the project, and the state was on the hook for a billion dollars to cancel the hastily signed contract. The Coalition, including the then PM Tony Abbott, slammed Labor for wasting money. The signing of the contracts was an outrageous attack on democracy – why not wait until after the election, give Victoria’s voters their say?

Now the Morrison government looks set to try to repeat the exercise at a federal level, rushing to tender for a new “fair dinkum” coal-fired power station before giving voters a say, because they all know it will never get past the people. Once again, nothing will be built, somebody makes money for jam, and taxpayers will be left smarting.

To back up a little, yesterday the new energy minister Angus Taylor – memorably described by one Liberal as “Tony Abbott’s brain” and by the AFR’s Rear Window column [$] as one of the hard right’s “proper maddies” – announced a series of measures aimed at getting electricity prices down urgently, ASAP, before the next election. That is supposedly the minister’s laser-like focus, after the Coalition dumped the National Energy Guarantee, which was designed to do the same thing as well as put in place a mechanism to meet Australia’s international emissions reduction obligations. Never mind that, as Labor’s energy and climate spokesman, Mark Butler, pointed out this morning on ABC RN Breakfast, electricity prices in the wholesale market have jumped again after the NEG was dumped, as a result of investor uncertainty. 

The headline measures announced yesterday have nothing to do with emissions reductions but are to do with, for example, reducing the over-priced and confusing “standing offers” to residential and business customers by electricity companies. If the minister can achieve actual in-the-hand lower prices this side of the next election, he deserves plaudits, although in a statement this afternoon Mark Butler accused the government of deliberately over-stating the potential savings. Given the biggest cause of rising electricity prices has been the “gold-plating” poles and wires, it is probably going to take more than that, like a writedown of those networks as the ACCC recommended.

Where things start to get strange is the government talking about keeping the lights on, taking up another ACCC recommendation to underwrite investment in new “dispatchable” electricity generation, which the PM talks about as “fair dinkum” power. On the ABC’s 7.30 last night, Leigh Sales put it to Taylor straight:

SALES: So is “‘fair dinkum’ power” code for “coal-fired power”?


TAYLOR: No … there’s no code. It’s dispatchable power. It’s power when customers demand it and we have got to get that balance right. This is really critical. There’s been challenges in South Australia as they’ve gone down this track in keeping that balance right and we determined across the National Electricity Market to make sure we have got that right balance and that is why we are backing investment in generation that will get that balance right.

The government’s climate deniers want to build new coal-fired power but, as has been written endlessly, and as the government knows, renewables with storage are now more competitive than any new coal-fired power station. So they are trying to prop up uncompetitive new coal by offering cheap finance or, as is flagged in this interview with The Guardian’s Katharine Murphy, by indemnifying new power generation projects against the future risk of a carbon price.

Exclamation mark. If that happens, with the stroke of a pen, the government will be pouring serious taxpayer money down the drain. The future carbon price liability of a coal-fired power station that could run for decades would be enormous, and opens up taxpayers to a massive compensation payment. It would vastly overshadow one-off expenses like topping up the pork-barrelling, pay-the-polluter Emissions Reduction Fund (which Environment Minister Melissa Price does not even seem to want to spend on reducing emissions, but wants to use for drought relief, going by this radio interview [$] today).

Taylor is rushing to get his legislation through before the end of the year. Would a government on the nose really consider going to such a controversial tender before the next election? If the Victorian example is anything to go by, yes. We are watching something remarkable: politicians like Angus Taylor adopting populist policy positions that aren’t even popular.

since this morning

On The Australian’s PoliticsNow blog [$] Liberal scrutineers are said to have abandoned posts in the Wentworth count after noting that a new batch of 500 postal votes appears to be in support of independent candidate Kerryn Phelps.

The ABC reports Prime Minister Scott Morrison has fired back at critics over his decision to send his predecessor Malcolm Turnbull – now an ordinary citizen – to represent Australia at an international conference in Bali, partly due to Turnbull’s close personal relationship with Indonesian president Joko Widodo.

in case you missed it

In a speech to a security conference in Canberra, former foreign minister Julie Bishop warns that populism is on the rise around the world, and that the resurgence is “coinciding with a crisis of confidence in democracy”.

Fairfax Media reports that Julie Bishop could be in breach of strict rules that stipulate ministers must pay for extravagant gifts, after she received a pair of shoes designed by high-end fashion designer Jimmy Choo, which may be worth as much as $25,000.

A report commissioned by Master Builders Australia estimates that Labor’s plans to remove negative gearing for existing homes and to cut capital gains tax concessions for residential properties would lead to a fall in new housing construction of up to 42,000 dwellings over five years and 32,000 fewer jobs, The Australian reports [$]. Labor counters that the report ignores “grandfathering” of existing investments.

Also in The Oz, Nationals deputy leader Bridget McKenzie will shift [$] her electoral office into the federal electorate of Indi, setting up a bid for independent Cathy McGowan’s seat and a potential tilt at the party leadership.

The AFR reports [$] that almost $200 million has been cut from the Australian Securities and Investments Commission budget since the Coalition came to power in 2013, according to Parliamentary Library research for Labor.

by Michael Lucy
The Nation Reviewed
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by Erik Jensen
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Paddy Manning

Paddy Manning is a contributing editor (politics) at The Monthly. He is a writer and journalist who has worked for the ABC, Fairfax, Crikey and The Australian. He is also the author of three books, including Boganaire: The rise and fall of Nathan Tinkler.

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