Bill’s tax has the power to hurt us
IF Labor wins the next election, power prices will rise. That, we’ll be told, will help combat global warming. In reality, however, pricier electricity will cut the living standards of most Australian households.
As revealed by the Herald Sun this week, Labor has designed a Carbon Tax Mk2 to reduce our collective CO2 output. Apparently, the tax will restrict the output of coal-fired generators (which currently produce the vast majority of power in Victoria), impose tougher exhaust standards on new cars and force businesses that exceed certain targets to purchase emission permits from overseas. In time, the Opposition plan assumes that fossil fuel use can be phased out in favour of renewables.
It’s great to have dreams for the future. Who wouldn’t want a world where wars are a thing of the past, no one goes hungry and energy is clean, cheap and abundant?
Unfortunately, real life rarely lives up to such high standards. Despite the fact most people agree wars are horrible, one glance at much of Africa and the Middle East proves that armed conflict is a daily reality for millions of people.
We now produce more than enough food to feed everyone. Notwithstanding that, pictures of starving children with distended bellies still attract donations aimed at fighting poverty.
And when it comes to energy, it’d be great if sunlight combined with silent, non-bird-killing windmills could heat our houses, power up our giant TVs and keep mobile phones, tablets and laptops fully charged. Again, reality has a nasty habit of intruding upon utopia.
During the foreseeable future there is simply no way that renewable technologies can meet our power demand. Irrespective of what Bill Shorten, the Labor Party and the Greens say, the electricity consumption patterns of most Australians are pretty simple. We expect to switch on the lights when and where we want. We demand wireless internet access 24 hours a day. Unlike our forebears, we neither shiver in winter, nor sweat in summer; central heating and airconditioning were designed to make such discomforts a thing of the past.
In short, we like to use electricity pretty much when we want. It is a staple of life in the 21st century. As a result, any politician who increases its price will lose popularity quick smart.
The first Carbon Tax unveiled in 2010 by former prime minister Julia Gillard produced a great deal of gobbledygook. Back then we were told that our reliance on coal could be phased out without pain. Yes, electricity prices might rise, but households would be adequately compensated using the very revenue generated by the tax itself.
Jobs were also to be protected via protection for “internationally exposed industries”. Frankly, I never understood what any of that meant. To reduce emissions, our overall electricity consumption had to be cut. Because we like using power in so many different ways, raising its price meant a drop in collective living standards. And has a new tax ever improved the lot of average Australians?
The Carbon Tax Mk1 cost both Julia Gillard her job as prime minister and Labor its position in government. Why then does Bill Shorten wish to repeat this failed experiment on voters in 2016?
THIS new version of the Carbon Tax will almost certainly differ in detail from its predecessor. Perhaps the phase-in period will be longer, or the new household compensation package higher; we’ll find out in a week or so.
What will not change is the fundamental purpose of this tax. In order to change our demand pattern for power, the Carbon Tax Mk2 must inflict pain. To pretend otherwise is to stick one’s head in the proverbial sand.
National statistics suggest that Australian incomes are barely keeping pace with inflation. As a result, every extra dollar that a carbon tax and its expensive renewable electricity removes from people’s pockets represents money subtracted from other parts of the household budget.
Every foreign emissions permit that an industrial power user is forced to purchase may contribute to job losses among its workers. And Labor’s alleged plan to make new cars more efficient (read expensive) will keep working families in older vehicles for longer.