Funding our Future

Karl FitzgeraldCommentaryLeave a Comment

The reason the Richmond recommendations failed
Creative Commons License photo credit: publik15

Renegade Economist Podcast 91

As broadcast on the almighty 3CR on Wed May 27th, 2009.
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Funding our Future: Age journalist and Co-Editor Dissent magazine Kenneth Davidson discusses deficit misnomers, the French reclaimation of public water rights and the debt trap cost-hello engineered.

Show Notes:
JOAR – Uranium Corporation of India Ltd stolen land at Jadugoa, but govt forcing them to pay the Land Tax. 

Thailand – Land tax seen as a tool to reduce land holdings of the rich

Economic Trickery Award of the week – FHOG goes International – US Treasury now providing a $8000 tax credit to subsidise property market.

GMO Banned for 5 years in Tas
David Llewellyn MP, Press Release:

Tasmania’s ban on the release of genetically modified organisms to the environment will continue for at least another five years under a Bill passed by Parliament.

Permits would double money given to business
In its annual report on government assistance to industry, the Commission says the $8.2 billion hand-outs originally proposed for carbon-intensive firms in 2011-12 would virtually double Federal Government spending on industry support. Even under the Howard government, it says, budget spending and tax breaks for business shot up from $5.1 billion to $8.4 billion in the five years to 2007-08.

The Rudd Government’s spending plans for research and development, the car industry and the farm sector would add another $20 billion in coming years, it says. But the emissions trading scheme would put all that in the shade.

The commission says free permits to emission-intensive firms alone would cost taxpayers $6.5 billion in 2011-12 under the original plans — now postponed for two years due to the global financial crisis.

The Government says the free permits are needed to stop firms shifting production to countries without carbon caps — “carbon leakage” — and the Coalition and industry say they are not generous enough. But the Commission says they will be too expensive and wasteful, and make other firms bear the burden of reducing emissions.

“Policies that counteract carbon leakage will most likely transfer the abatement task to other sectors,” it warns. “This will impose additional costs on other firms that must buy permits to emit greenhouse gases.”

The ETS: our very own pig with lipstick (and a touch of kohl)
Bernard Keane, Crikey:
Based on a RiskMetrics report

During what was to be the first year of the scheme, of course, they now face no signal at all as it has been delayed. In the first year of the revised scheme, the aluminium smelting industry will face a total net permit obligation of $23m. In 2012-13, when we move to an actual emissions trading scheme, it will face an obligation of $82m. Alumina refining will face an initial permit obligation of $57m, rising to $171m in 2012-13.

In 2007, the aluminium and alumina industry produced over $11b in export revenue. It is responsible for 9% of Australia’s greenhouse emissions by itself.

The cement industry does even better. It faces a bill of $4m in 2011-12 and $14m the following year. In 2008, the industry generated turnover of just under $2b, and 1.4% of the nation’s emissions.

Steel: $6m, then $23m, for an industry with $21b turnover and just under 4% of emissions.

Woodside’s Don Voelte called the recent amendments “lipstick on a pig”. Some pig. The whole LNG industry faces a bill of $41m in the scheme’s first year — more than $200m less than it would have paid under the previous iteration of the scheme. Woodside itself, courtesy of Voelte’s incessant whingeing and the lobbying efforts of the APPEA, has gone from getting nothing under the Government’s Green Paper to getting $64m worth of handouts in 2012-13.

Note, by the way, that the biggest polluting industry of all, the cattle industry, which accounts for 11% of emissions, won’t be in the scheme until 2015 at the earliest either.

Get the feeling we’re running out of candidates to actually do something substantial about climate change?

It provides a fascinating contrast with the Government’s treatment of the coal industry, which it has steadfastly refused to include as an emissions-intensive, trade-exposed industry. The Government claims that coal is below the lower threshold for inclusion as an EITE (1000 tCO2/$m revenue. Industry figures show an average emissions intensity of more than 1300 t/$m, comfortably in the range that would qualify it for 60% (initially 66%) assistance. An industry-commissioned reported by ACIL Tasman says the coal industry faces total cost increases from the ETS of over $1b a year.

Water lot of PPPosturing over desal Kenneth Davidson
THERE are three reasons why the $3.5 billion desalination plant at Wonthaggi is unlikely to go ahead: there is no appetite by financial institutions to back infrastructure plants of this magnitude; there has been no credible environmental effects statement which gives the project a clean bill of health; and the two French finalists in the bid to build, own and operate the plant — Veolia and Suez — will lose their Paris water licences when they come up for renewal on December 31.

The “re-municipalisation” of water services is popular in France. The Mayor of Paris since 2001, Bertrand Delanoe, was voted most popular politician in France last year and more than 40 French municipalities and urban communities have taken water services back into public hands over the past 10 years, according to the Rome-based news service IPS.

Capitalism in Wonderland: Why mainstream economists can’t deal with the ecological crisis
If we cannot rely on orthodox economists to avert crises in financial markets, an area that is supposedly at the core of their expertise, why should we rely on them to avert ecological crises, the understanding of which requires knowledge of the natural environment that is not typically covered in their training?

Political stupidity and hydrocommerce madness – Kellie Tranter
If it’s good enough for international marketeers like Summit Global Management to see water as a “stable, non-cyclical, low-risk investment”, why isn’t it good enough for the New South Wales State Government?

Premier Nathan Rees was quick off the mark to announce that Sydney’s water supply is secure for the next 50 years with Veolia Water – a private company – being granted a licence to draw from the Fairfield Sewage Treatment Plant, recycle the waste and sell it. On top of the desalination plant – which coincidentally is also being built by Veolia Water and John Holland Group Pty Ltd – this will, we’re told, have a positive effect on dam levels.

Brazil and China eye plan to axe dollar – Jonathan Wheatley
Brazil and China will work towards using their own currencies in trade transactions rather than the US dollar, according to Brazil’s central bank and aides to Lula da Silva, Brazil’s president.

The move follows recent Chinese challenges to the status of the dollar as the world’s leading international currency.

Mr Lula da Silva, who is visiting Beijing this week, and Hu Jintao, China’s president, first discussed the idea of replacing the dollar with the renminbi and the real as trade currencies when they met at the G20 summit in London last month.

Music

Pataphysics – Cloaked Guerilla
Boom Bip – The Birdcatcher’s Return

Material We Wished to Have Covered

Crisis leaves apartment sales crippled – Bridget Carter
POCKETS of suburban Australia are being littered with empty, unsaleable concrete shells, as pricey apartment projects fail to find buyers.

The economic downturn has seen 16,623 apartments and townhouses abandoned or deferred in Sydney, Brisbane and Melbourne between January last year and this year. Figures from BIS Shrapnel show the number of apartments and townhouses abandoned or deferred in Sydney between January to July last year was 4072, but between August and January this year it rocketed to 5326, taking the total to almost 9400.

In Melbourne, numbers of deferred apartments almost doubled over six months and in Brisbane, the number rocketed from 691 in the first half of the year to 4686 in the second.

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