Tag Archives: the punch

Barnaby Punches On

14 Oct

Senator Joyce writes for The Punch today:

An unaffordable tax beyond all regional doubt

When I think of regional Australia, I think of long drives, lots of wildlife and lights in the sky not on the ground. There is another thing that now distinguishes regional Australia: an absolute rejection of the carbon tax.

Senator John Williams recently conducted a poll in the seats of New England (based around Tamworth) and Lyne (based around Port Macquarie). After receiving over 9,400 responses, 89 per cent of residents are against the carbon tax.

The reason for this is not that hard to fathom. When it comes to the carbon tax, the greater the distance, the greater the cost.

From 2014, the carbon tax will apply to transport fuels, making the costs of getting things out to regional Australia more expensive.

People in regional Australia already pay more for electricity too. Australians in regional NSW spend 25 per cent more on electricity than those in Sydney and Australians in regional Victoria spend 30 per cent more than those in Melbourne. There are already people out there who can’t afford the price of power as it is.

The carbon tax will make our industries less competitive. That is its whole point. That means some will lose their jobs, even if jobs are created elsewhere.

What sort of solace is that to the coalminer in the Hunter valley who must tell his wife and kids that they have to move to western Queensland to keep a job? They probably would like to stay in the Hunter where their family, friends and home are.

Most of the jobs forecast to be lost as a result of the carbon tax will be in regional Australia because that is where the mining, manufacturing and power generation jobs are.

Economic modelling by the Queensland Labor government found that the carbon tax would see 41,000 fewer Queensland jobs, with the biggest impact in regional areas. The Rockhampton and Gladstone area will see economic activity fall by 8.2 per cent, the Mackay area by 5.7 per cent, double to triple the impact of the carbon tax on the rest of Australia.

NSW Treasury figures show that the carbon tax will lead to 31,000 lost jobs in NSW but over 26,000 of these jobs would be in regional Australia, including 18,500 in the Hunter, 7000 in the Illawarra and 1000 jobs in the central West.

Some of Australia’s most competitive manufacturing companies are in the food processing industry located near Australia’s world-class agriculture. The carbon tax will add $3.3 million per year to the costs of just one of JBS Australia’s abattoirs. JBS employs over 4000 people in regional Australia. After the live cattle fiasco, the last thing our beef industry needs is a carbon tax.

Unemployment in regional Australia is already higher at 6 per cent, compared to 5.1 per cent in the rest of Australia.

Given all this you would think that a government seeking to introduce a carbon tax would carefully analyse its impact on the smaller towns and communities which may not be able to recover if their local abattoir or mill cannot survive the higher costs of a carbon tax.

But, no, the government has not released any economic modelling of the impact of the carbon tax on regional areas. That’s despite the Queensland, New South Wales and Victorian governments doing so, although they haven’t had access to the same economic models that Canberra has used because Wayne Swan refuses to release them.

The Government is treating Australians, particularly regional Australians, with absolute contempt. The people of Rockhampton want to know what the carbon tax means for them, the people of Newcastle want to know what the carbon tax means for them and the people of the La Trobe valley want to know what the carbon tax means for them. The government, though, is refusing to give them any answers.

When the last Coalition government faced heat over National Competition Policy in the 1990s it asked the Productivity Commission to evaluate what its impact had been on regional Australia. It made these results public, including the finding that employment was lower in 33 out of 57 Australian regions because of national competition policies. Not everyone liked NCP but at least the government was up front about its impacts.

Another poll released the other day showed that one out of every two Australians think that minority government has been bad for Australia. Is that any wonder when we have a government which goes back on its promises and fails to be up front with the people about its own policies.

And for the Canberra Times yesterday:

Mad carbon tax burns hole in Labor’s credibility

It is a frightening thought that our nation is about to recalibrate its economy on a colourless, odourless gas at a time when the global economy is on the edge of a precipice.

It is deeply saddening that the warrants, given before the last election on the banks of the Brisbane River to national television, that ”there will be no carbon tax under the government I lead”, mean nothing and that by reason of this the dignity of the office of prime minister has been sullied.

It is a very bad day for democracy when the views of the Australian people as voted for at a federal election, then reinforced in all the polls since, are to be ignored.

It is historically momentous that the oldest party in Australia has been dragged so low that they are now the captive to the peripheral extremism of the Greens party, which is quite evidently determining substantial sections of the Labor Government’s policy.

Former Labor leader Kevin Rudd is obviously on the move against Prime Minister Julia Gillard and there is no love lost between the two or reason for any dtente. Australia is suffering all the signs of a government which is in critical and dangerous demise as they fight each other, rather than sail the ship which is now heading toward a rather large economic iceberg.

Last week we borrowed an extra $2billion, again, and we are now $212billion in gross debt. Our manufacturing industry is in real trouble and the final thing our nation needs is a tax that removes the strategic advantage we have, cheap power.

Industry lobbyists have been literally running around desperately trying to cover the multiple exposures coming down the path to them. Their frustration is palpable.

The banks are happy, however, they are about to score a ticket to billions of dollars in commissions. This is the new world that the Greens have forced on a capitulated Labor, which is now stumbling around making excuses for this complete and dangerous policy fiasco.

As Manufacturing Australia’s Dick Warburton said, the commodity boom will one day end then our economy will be one of services, banks and agriculture. This trio will be trying to pay off a massive debt left by a party that maxed out the credit card when there was a minerals boom.

May the divine spirit have mercy on us, as our nation tries to pay the debt off when China decides that it does not wish to pay us as much as it used to for our coal and iron ore.

The key issue is this, whether you are the most fervent supporter of the argument on human induced global warming, or alternatively believe that human capacity to change the climate is vastly overblown, there is one unifying fact; Australia’s action on carbon reduction will have no effect whatsoever on the climate, it is merely a gesture.

So how much do you wish to pay for this gesture? Labor’s political position is that on the one hand it will have little price effect, which if that is true then the carbon tax as a pricing mechanism is pointless, yet it comes with a multiple $100million bureaucracy.

On the other hand, if it does have a bad effect then Labor promises to compensate you. People only get compensated if they have been unjustly hurt. So who by this statement does Labor believe will be hurt? Pensioners, steel production, coal mining, power companies, low-income earners all by Labor’s own admission of compensation will be hurt by this pointless gesture to placate the policy desires of the Australian Greens.

The final lunacy is that Australia signs up to send up to $57.9 billion a year to the very dubious carbon credit market overseas. Your loss of lifestyle will support the most lucrative scam market in the history of the planet.

So good luck finding the mythical green jobs they promise, good luck paying back the debt and, most importantly, the best of luck finding one Labor member who will say that they will campaign at the next election knowing they are personally responsible for the predicament this mad tax put us in.

UPDATE:

If only it were true.

And … if only Senator Joyce sent his knockout punch in this direction too –

Barnaby: The Economic Illuminati

9 Jun

Opinion piece for The Punch – Senator Barnaby Joyce, 7 June 2010:

The Mining Tax:  Treasury’s Own Love Formula

Every now and then, a select group from the economic illuminati retire to their monastic study and devise a splendid idea to try and pay off their previous splendid idea.

Splendid idea number one was to borrow so much money that we put ourselves in more strife than the early settlers in our desire to adorn the nation with an eclectic mix of rubbish that apparently was going to save us from Asia ceasing to purchase our minerals. The relationship between our stimulus and mineral exports was as clear as mud, but there was an emphatic defence of this fantastic proposition by Labor.

The Treasury corruption of the graphs depicting the relationship between our and other nations’ fiscal stimulus packages and the effect on their respective economies shows that when the graphs were corrected the relationship was hardly apparent. We really were sold a lemon on Labor’s “go hard, go early, go household strategy” in response to the North American and European financial crisis and are currently lumbered with in excess of $144 billion gross federal debt while on our merry way to in excess of $220 billion gross federal debt.

The next chapter in the Labor Party Magnus Opus was called “massive debt” and the next problem for Treasury was “how do we pay it off?” The Labor Party thought to increase their revenue stream in the most politically parochial way. They explained to Australia that the big miners are morally lacking, are exploiting the workers, and they as a government, Robin Hood – like, would restore the balance of fiscal morality. It would mean the partial nationalisation of our whole mining sector, however. They had it on good advice from the Secretary of the Treasury, that he had studied a theorem at high school that no matter how you flog this mining sector, it’s going to hang around and continue to support you.

The sobering reality is this, despite the Secretary of the Treasury stating that you can put taxes up in the mining sector and not affect the investment profile, he is wrong on this occasion. If taxes go up at an exponential rate to where they formerly were, people will make the logical decision to go where the taxes are less. If the Secretary of the Treasury tells you that a new tax will assist in cooling the planet, you really have to ask yourself if this is necessarily so. If you surround yourself with hedges of economic theorems and carpets of policy papers and spend your nights fanatically trying to turn human emotion into predictable mathematical models, and don’t recognise what is yelled to you as common sense by the peak industry groups, you will come unstuck when you find that your models don’t match their experience.

During Estimates one can get quite frustrated with well meaning pontificating by well paid bureaucrats about a perfect world they have created and what happens in it. This world has created a Newtonian expectation of preciseness to economics as required to match government policy desires. It supposes that gravity and economics are the same and that people’s actions are as predictable as other items of physics- like a mathematical model for love. Commonsense expectations on actions and reactions are put aside for superb anodyne reflections on economic issues. The basic premise that must be first applied when analysing the RSPT is this – if a miner can make more money in another venue, then to that other venue they will go. Unfortunately it appears that this statement of the bleeding obvious, that one cannot predict the economic speed of sound, has meant that a realistic gut instinct of what happens when you put a 40% tax on mining has not been followed.

The reality of the RSPT, which was blatantly obvious to virtually everyone, has now of course come to be in the actions of such companies as Xstrata in the reduction of their investment decisions in Australia. How can we believe the Labor Party’s lauding of their so-called management of the GFC and take for granted their endorsement that it was their school halls program that saved us from a recession, when it is the same Labor Government inspired brains trust that is creating this stuff up?

Dr Henry, in answer to my question at the Economics References Committee Inquiry earlier this week, stated that it didn’t matter whether the RSPT tax was at 40, 60 or 70 percent, as to how it would affect investment in Australia. I was left no choice but to believe that he was correct in his description of a theory but had completely departed from reality as to what was actually going to happen.

This new tax will not only be a bombshell to such mining areas as Gladstone, Townsville, Wollongong Newcastle and Mackay and the whole of WA, but ultimately it will affect those other big coastal towns such as Brisbane, Melbourne and Sydney as they come to the startling reality that these Labor Party splendid ideas are going to have dire consequences to the investment and export structure of our nation.

In the town of Wandoan, there are some farmers who are happy today due to the fact that a major mine is not going ahead and yes we should not be mining prime agricultural land because this is the ultimate non renewable resource. This Labor Party package was not to protect prime agricultural land but to prop up Treasury with a new tax. In fact the Labor Party hoped the mining would go ahead in Wandoan. However, there are some other families who were hoping that the income from the mine will increase their standard of living, and they are very unhappy, because Labor Party hopes are not their reality.

There were people who were going to build a $1 billion railway line from Wandoan to Banana and they are unhappy today as they are not going to build it anymore. There was supposed to be the development of a massive income stream to support lots of shops, chemists, school teachers, nurses, contractors, metal fabricators, diesel fitters and they are all going to miss out. They are all very unhappy. They are all unhappy because some group of individuals in Canberra decided that they were beyond questioning and resolute in a desire to inflict on the Australian economy what would have to be the most incongruous economic policy since the 1949 desire by the Labor government to nationalise the banking industry.

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