Yesterday, the Herald Sun ran an ostentatious double page spread under the tagline “Carbon Pain” as a prelude to Julia Gillard’s long-awaited tax announcement.
Next to an opinion piece by state energy minister Michael O’Brien sat an uncritical re-hash of a presser sent around by the Baillieu government on Wednesday examining the impact of a $25 a tonne carbon tax on Victorian battlers. According to the paper, the average “Melbourne residence with gas hot water” and the good old pizza shop were going to be slugged hard.
But it seems the figures underlying the government’s number crunching are dubious at best. Working backwards from the helpfully provided table (below), it can be rapidly deduced that O’Brien and the Hez back the assumption that generators will pass on the full $25 (now $23 according to reports), despite luminaries like Ross Garnaut suggesting otherwise.
Even more damning is the idea that, under a carbon tax, Victoria’s highly competitive electricity market wouldn’t reduce the amount of Co2 produced per megawatt hour by Victorian generators. O’Brien infers that generators would continue to emit between 1.1 and 1.17 tonnes of carbon dioxide per megawatt hour. Compare that with 0.4 tonnes of CO2 for gas-fired power and 0.8-0.9 for other coal sources.
The government reckons that with a carbon price of $25 per tonne, Victorians would end up paying an “extra $2.5 billion” to the feds, which is the same as Canberra yanking “$450 from the pocket of each Victorian.” The cost of electricity used by public hospitals and public transport would jump by “$27.7 million”.
Yesterday’s Herald Sun
The gas hot water household would see a “$129” increase in their annual power bill, while the pizza dude would be slugged with an extra “$550”. This is, of course, before the federal government’s generous compensation package is factored in that will probably leave most of those featured better off.
By sticking with the brown coal-fired status quo a suburban hairdresser might well expect an $825 jump in their power bill — but if, and only if, Victoria maintains its addiction to brown coal which currently produces 90% of the state’s power. Hazelwood, which produces up to 25%, is slated to be shut down completely and is currently asking the corporate regulator to overlook breaches in its license.
According to this informative document produced by the Australian Conservation Foundation and Environment Victoria in 2005, Hazelwood emits 1.6 tonnes of carbon dioxide per megawatt hour. It has actually increased its emissions intensity since 1998 and would rapidly turn to dust if the carbon price was ratcheted higher, as planned.
And in this paper published in March by ROAM Consulting, the economic impact on Victorians would be substantially less, perhaps $250 for a family using 7300 kilowatt hours per annum but only if the carbon price was increased to $30 a tonne.
Greens MLC Greg Barber slammed the assumptions underpinning the analysis this morning, telling Crikey that O’Brien’s table was a “primary school-level effort at economic modelling by abacus.”
He said it was built on the false assumption Victorian consumers would continue to choose dirty sources of power like Hazelwood.
“If you believe in the free market like me, the assumptions are totally unsustainable. You’d assume that with a carbon price in place other, less polluting, electricity generators will take market share off Hazelwood. That’s how the market works.”
The source for the modelling remains a mystery. O’Brien has said his “department” was involved, however interested parties are believed to be immediately seeking the working documents under Freedom of Information.
Baillieu government spinner Simon Troeth did not respond to a message left on his voicemail this morning.
Isn’t it sweet the State Liberal Government is helping out its Federal big brother with its ministerial resources?
Was there this much negative press about the GST before it came in?
You know how the line is been thrown around at the moment: “At least Howard took his GST to an election and won a mandate to bring it in”
– I have been thinking long and hard about that. I think it is nonesense. I would be interested to have the following analysis criticised if it is incorrect. But this is how it seems to me:
2001: Howard wanted to bring in the GST. All indications were that he was going to lose the election. Until two things happen just a couple of months before the election:
1) late August – Tampa and the “children overboard” lie
2) Sep 11 – and the fear it sent around the western world
The 2001 election if reduced to a key issue, at the time of voting, was about border security – NOT the GST. In fact, had not those two things happened above, Howard would probably have lost that election because the majority of Aussies never want new taxes.
The proof of this (as far as it can be proven) is in the way the upper house panned out. The Democrats ran on the “we will stop the GST with Labor in the Senate” platform – and they grew significantly that election. People voted Liberal in the lower house (for “border security”) and the majority voted Labor and democrat in the Senate (“to block the GST”). And the GST would have been blocked if the Democrats had kept their word! (Their resultant demise is not a good omen for Gillard admittedly).
So… when all is said and done, history has been rewritten yet again by the popular media. Howard did not have a mandate to bring in the GST. He actually had a mandate to be racist and cruel to refugees – but he did not have a mandate for the new tax. That issue nearly cost him the election. (I guess he was pretty happy about Tampa and Sep 11 … in a sober and caring way of course).
The great News Ltd, Abbott, Liberal, ABC, Shock (horror) Jock, mass of misinformation and scare mongering gathers pace aplenty as the details of the Carbon Pricing announcement gets closer.
These would be rulers of our lives are a sickening collection of liars who, like little kids who can’t get their own way, are using every means at their disposal to convince the population at large the details that are coming from the legitimate Govt, re the Carbon legislation, will send this country into bankruptcy, millions will be on the poverty line, life as we know it will be finished.
Quite frankly the use of free speech in a democracy, is being pushed to the very limits by these agitators who believe they and only they have the right to decide the direction this country should headed. To hell with the millions who actually want this legislation, they don’t figure in the great plan.
While not a Green voter, I am with Bob Brown and his move to have a thorough investigation of the media. The trouble is it wont happen, the Coalition and the Govt haven’t got the balls.
Random fact:
“The largest shareholder in GDF Suez [70% owner of International Power/Hazelwood] as of 31 December 2009 is the Government of France with 35.9%”.
David: my concern is that contempt for democracy and freedom of speech is the likely outcome from all this nonesense about the carbon tax. People will deepen in their cynicism and actually grow to despise free speech. Definitely not a good direction for the future.
Reality check (1): the GST came and took more money off Australians than the Carbon tax will.
Reality check (2): Privatisation of govt industries has caused prices to rise more than the carbon tax will.
Get a grip liberal voters. The sky will still be up there next month. The carbon tax will come, compensation (probably too much of it) will flow, and life will continue.