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La la Libs

Pursuing the RET, ignoring Abbott - is the Liberal party pushing the wrong envelope?

4 March 2017

9:00 AM

4 March 2017

9:00 AM

The commentariat are almost unanimous that Tony Abbott should not have launched our book Making Australia Right: Where to From Here. Well, it was me who asked him to and non, je ne regrette rien.

More than anything I was guided by the Prime Minister who, as a humble backbencher wrote on December 7, 2009 that: ‘While a shadow minister, Tony Abbott, was never afraid of speaking bluntly in a manner that was at odds with Coalition policy so as I am a humble backbencher, I am sure he won’t complain if I tell a few home truths about the farce that the Coalition’s policy, or lack of policy, on climate change has descended into.’

Who could argue with that? Tony’s inconvenient home truth is that it is not Labor’s mind boggling 50 per cent Renewable Energy Target that has plunged South Australia into state-wide blackouts, it’s the existing 23.5 per cent target. Abbott calls this a policy-driven disaster. Turnbull calls Abbott a sad distraction. The government is committed to the target. But the trouble with business as usual is that it is putting business out of business.

The CEO of Bluescope Steel warned last week of an ‘energy catastrophe’. Rio Tinto will cut jobs and reduce output by 45,000 tonnes at its Boyne Island aluminium smelter because of internationally uncompetitive, exorbitantly-priced, unreliable power which can spike, in some states, at more than 6 or 7 times the price of power in Germany or the US. Last October, blackouts, at Olympic Dam, cost BHP Billiton over $30 million. At a nearby Port Pirie lead smelter, a diesel generator kept the blast furnace operating for hours but as the blackout dragged the slag solidified doing more than $5 million damage.


The crazy thing about the government’s target, as Abbott pointed out, is that wind generation is meant to double over the next three years at a cost to consumers of $10 billion. Madness. What Australia needs is not more intermittent energy that is so uneconomic it can only be built with massive subsidies from fossil fuel – what it needs is access to base-load power to keep the smelters running. If Victoria were to keep its coal-fired power stations open, SA could invest in upgrading its interconnectors to access Victorian base-load power. But Victoria is shutting down its base-load power stations for the same reason that SA is – the RET forces coal-fired power stations to pay such huge subsidies to renewables or to pay such onerous fines to the government that they cannot make enough money to stay open and provide backup power for windmills and solar panels.

That’s right. The shortage in Australia that is driving up the cost of electricity is not a shortage of power, it’s a shortage of renewable energy certificates, which are now selling at $85 per megawatt/hour, up from only $35 two years ago. That’s $20 more than the fine the fossil fuel providers must pay the government if they don’t buy the certificates. So, coal-fired power plants are going broke but that is the whole point – to drive them out of business. And power bills are being driven up by the millions of dollars in fines paid by coal-fired power stations to the government.

Thus, the PM is lamenting the soaring price of electricity while profiting from the fines, and is proposing subsidies for smelters and coal-fired power plants to counteract the impact of his own RET.

It is this farce ‘that the Coalition’s policy, or lack of policy, on climate change has descended into’ that prompted Abbott to say at our book launch, ‘Wouldn’t it be better to abolish subsidies for new renewable generation and let ordinary market forces do the rest?’

Abbott’s other proposals are equally sensible. Our immigration program should obviously be calibrated so that it meets the demand for labour without putting excessive pressure on infrastructure. Every immigrant needs not just a job and a home but transport, schools, hospitals and all the other services state governments supply. All Abbott pointed out was that if we ‘scaled back immigration (at least until housing starts and infrastructure have caught up), we can take the pressure off home prices.’ Contrast this with Labor’s dangerously confused plan to make housing affordable by preventing taxpayers who invest in housing from consolidating all income earned and deducting all the costs of doing business so that they only pay tax only on profits.

Equally, Abbott’s call to rely on the parliament, courts and press to protect human rights, rather than a commission which has distinguished itself by its errors rather than the protection it has afforded anyone, should not give the government conniptions. His call for parliamentary reform, so that a joint sitting of parliament can be called without going to a double dissolution was first mooted under the Howard government and given the grid-lock the government faces in the Senate, should be a welcome suggestion. As for his call to take budget repair seriously, avoiding all new spending and cutting out all frivolous spending, who could argue with that?

It seems the Liberal party has become so intellectually fragile that it cannot tolerate common-sense policy proposals from a former prime-minister. Well, as the eminently sensible Mathias Cormann should have put it the other day, that is sad.

Still, how can anyone be sad for long when we have the press gallery to entertain us. Just a word from Abbott and a pundit was lurching for the smelling salts writing: ‘Politics is full of catastrophic debacles and tragedies that nonetheless finish up in weed-covered, neglected dead ends. The Soviet Union comes to mind. All that butchery. All those millions killed. And then pfft! It was gone. Similarly, Tony Abbott.’

Really? ‘Okay, not the millions dead,’ they conceded, ‘But.. can you remember anything positive that he has contributed to our polity…?’. Well, apart from putting an end to more than 1,100 deaths at sea, inking three FTAs, getting rid of a carbon tax, premised on a world carbon price of $29 a tonne when the current price is only $7 a tonne, putting a stop to business welfare, yes, what did Abbott ever do for us?

Rebecca Weisser is a research associate at the Centre for Independent Studies

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