Tony Abbott tells firms: don't buy carbon permits

Thus destroying the "certainty" that Gillard claimed to offer

TONY Abbott has warned businesses not to buy future carbon emissions permits, in the light of his plan to scrap the carbon tax, while industry is lobbying every federal MP for changes to the government's scheme to protect companies' competitiveness.

In an address to the Menzies Research Centre taxation roundtable in Sydney yesterday, the Opposition Leader said the repeal of the carbon tax legislation, which passed the House of Representatives on Wednesday, would be the "first order" of parliamentary business under a Coalition government.

"We will repeal this legislation," Mr Abbott said, a day after his refusal to back Julia Gillard's Malaysia Solution legislation forced the government to effectively abandon offshore processing of asylum-seekers.

"We will dismantle the bureaucracies it has spawned. We would take the upward pressure off people's cost of living and the threat to workers' jobs. And we give businesses fair warning not to buy forward permits under a tax regime that will be closed down."

The electricity industry said Mr Abbott's hardline position presented a risk, and any policy that reduced the use of forward contracts would fuel higher prices.

The industry warning came as a leading financial analyst told The Weekend Australian that ongoing uncertainty over the future of carbon pricing policy could continue an investment strike that has prevented the addition of new baseload generating capacity. It would complicate writing new long-term electricity supply contracts, which would also push up prices.

Climate Change Minister Greg Combet attacked Mr Abbott's comments as a continuation of a "hysterical, negative scare campaign". "Business needs certainty over carbon pricing to underpin investments in the clean energy sources of the future," he said.

The row over Mr Abbott's speech came as Australian Industry Group chief executive Heather Ridout and Business Council of Australia chief executive Jennifer Westacott, in a letter to all 226 federal MPs, said amendments to the Clean Energy Future Bill were essential to include safeguards to protect Australia's competitiveness. "It is not economically sensible for Australia to see industries that would be competitive in the context of a global price on greenhouse gas emissions go into premature decline," the letter says.

"Ahead of that eventuality, policies are required to maintain the relative competitiveness of Australian industries in the absence of global action."

Under the government's package, a fixed carbon price of $23 a tonne will be imposed from July 1 next year, rising at 2.5 per cent a year in real terms for three years. In 2015, the package will convert to an emissions trading scheme with a floating price.

When the floating price starts, a floor price of $15 will be imposed and a ceiling price, $20 above the expected international price, will also be imposed to prevent volatility.

The business groups' letter called for a lower starting price in the fixed-price period and improvements in arrangements for trade-exposed industries to ensure they did not face additional costs their competitors did not.

It also called for the replacement of the 80 per cent emissions reduction target by 2050 with a clause outlining the evaluation process to determine the target and a requirement that parliament agree to the target.

The business groups called for the Climate Change Authority's remit to be expanded to allow it to consider all Australian emissions reduction policies - such as solar feed-in tariffs - and for it to recommend whether these be wound back.

In the wake of Mr Abbott's call for business to stop buying future carbon emissions permits, National Generators Forum executive director Malcolm Roberts said forward contracts allowed generators and customers to manage the risk of volatile spot prices. "Policies which reduced the use of forward contracts would fuel higher prices," he said.

He was also concerned about the opposition's intention to abolish forward permits with the carbon price. "As generators write post-2014 contracts, they will have to protect themselves against the risk of losses on any forward permits they hold; this is another risk to manage," he said.

Electricity generators have already been critical of the policy to limit the number of forward permits on offer and the demand for upfront payments.

"This could raise prices by 10 to 15 per cent," Mr Roberts said. "Generators are urging changes to the Clean Energy Future Package to prevent this problem."

Deutsche Bank analyst Tim Jordan said ongoing carbon policy uncertainty had two effects on the electricity sector. "It prevents generators from hedging their costs, which means more risk, higher prices and more price volatility for consumers," he said.

He warned uncertainty also weakened the signal for investment in new capacity.

"If the carbon price isn't locked in to support investment in new lower carbon baseload generators, then investors will hold off, putting pressure on existing high-carbon plants to meet growing electricity demand. Both of those mean higher costs for electricity customers in the long term," he said.

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How to scrap the carbon tax

Here’s what Richard Denniss, head of the leftist Australia Institute, said on The Drum on Wednesday night. Declaring that Tony Abbott could not unwind the carbon tax if he becomes prime minister, Denniss declared:

Richard Denniss: …Even if there’s a 2013 election, the new Senate doesn’t take office until 2014. And you can’t use your double dissolution triggers until the new Senate arrives, you’re not going to have a double dissolution before 2015. The idea that we introduce a carbon price, scrap it in 2015 or 2016, even Greg Hunt says the direct action scheme is an interim measure and by 2020 the Liberals might support a carbon tax. It’s good politics, it’s good theatre. But we’re putting politics ahead of democracy and politics ahead of the economy here.

What a load of tripe. Richard Denniss reckons it is putting politics ahead of democracy to respond to the wishes of a majority of electors. Fancy that. And his political calculations are simply incorrect. If, say, a Coalition government won an election in August 2013 it could put legislation through both the House of Representatives and the Senate by the end of the year. If the legislation is defeated, it could be re-submitted after three months. A further defeat would set up a double dissolution trigger – which could be held by mid-2014.

And Richard Denniss reckons that double dissolution triggers do not apply until a new Senate is in place. Can you bear it?

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Gerard Henderson is right above but omits that Abbott also has other options. He could simply refuse to collect the tax, for instance, or remit to the payer as ex gratia payment any taxes paid





Climate Liars Hurting Real People

A SELF-FUNDED retiree has been told he cannot develop his land at Marks Point because rising sea levels will inundate his property by 2100.

Lake Macquarie City Council staff have recommended refusing Rob Antill’s plan for four two-level dwellings on a 1300-square-metre site.

A council staff report said the development site would have ‘‘a small area permanently inundated by 2050’’. ‘The entire site may be permanently inundated by 2100,’’ it said.

A number of prominent sea level groups pay their bills by making up absurd numbers about current sea level rise. Others make up even more absurd numbers about future sea level rise.

Sea level is not rising significantly in Newcastle. That man’s property will not be underwater in 2050 or 2100. It is time to make dishonest scientists accountable for their actions, just like every other profession.

The entire city of Los Angeles is doomed due to earthquakes. Do they build houses there anyway?


Graph of Newcastle sea levels from here

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Bureaucracy at its most incredible

Queensland Health director-general Mick Reid, who oversaw the long-running payroll debacle, wins Sidney Sax Award for public health administration

THREE years at the top of possibly the state's most disaster-ridden government department and former Queensland Health director-general Mick Reid has won an award for public health administration. It was Mr Reid who oversaw the long-running payroll debacle which left tens of thousands in financial hardship.

Yesterday he was named the recipient of the prestigious Sidney Sax Award for "a notable contribution to the protection and promotion of public health, solving public health problems, advancing community awareness of public health measures and advancing the ideals and practice of equity in the provision of health care".

Mr Reid was at the helm of Queensland Health when he opted against renewing his contract in June, 15 months into the debacle. His final annual salary was $646,000, including a $128,000 payout.

The payroll debacle was one of the worst failures of public administration in Queensland history. The cost of fixing it stands at $219 million and counting.

But in a citation, Australian Healthcare and Hospitals Association president David Panter, called Mr Reid "a leader in health reform".

The citation also praised Mr Reid's work on performance and accountability and said he had "revitalised the information technology". It made no reference to the new computerised payroll system.

Opposition health spokesman Mark McArdle described the award as a "nonsense". "I can't believe the award was given for expertise. The man couldn't get a simple payroll system right," he said.

But some believe Mr Reid was one of several people within Queensland Health who took the full brunt of the payroll failure, despite the key role played by Public Works Department body CorpTech.

Former Queensland Health deputy director-general Andrew Wilson said Mr Reid had been a leader in the health field for decades. "It's easy to forget the breadth of the man's contribution to health leadership over 30 years at every level of government and as a consultant to every aspect of the health system," Professor Wilson said.

Mr Reid is still working in health, as a part-time consultant with management consulting firm McKinsey.

The award was given to Mr Reid by the Public Health Association of Australia.

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Aggressive response by homosexuals to Bible message

CHRISTIAN street preachers and a pro-gay rights group are a push or shove away from causing violence in Rundle Mall. That's the warning from the chairman of the shopping precinct.

Theo Maras told The Advertiser yesterday that the groups had been involved regularly in "guerrilla warfare" throughout the Mall, triggering customers to keep clear of shops because of safety fears.

"There is a real potential for violence," Mr Maras said. "All you need is a group of people to push and shove on both sides and you will have a fiasco." He said the groups seemed to care more about seeking attention for themselves than their causes.

"We are not against the Bible or the pro-rights group," Mr Maras said. "It is not about who is doing it; it is that nobody should be doing it. "People have a right not be intimidated or yelled at."

Street preachers representative Caleb Corneloup said the group's Friday night preaching had attracted protests from the gay community for about six weeks.

He said the protesters claimed the preachers were exercising hate speech. "I've asked them what they say is hate speech, and the only issue they told me is that we believe that homosexuality is a sin and those who practice it will go to hell for eternity if they don't repent," Mr Corneloup said.

"I disagree with that because we have a standard biblical position towards homosexuality."

He said his group refused to stop preaching, despite the controversy and ongoing protests. "Street church is there to stay, we're never going to leave," he said.

Mr Corneloup said he believed the presence of the gay community was in response to his group preaching at a pro-gay marriage rally earlier this year.

The preachers have been at the centre of a legal stoush with Adelaide City Council over the group's presence in Rundle Mall. Yesterday, the council asked the Supreme Court to settle its feud through mediation.

Council lawyers said they wanted the dispute set down for a private mediation - presided over by a judge - before the matter returns to court in two weeks. However, Justice John Sulan adjourned the matter to be heard at the next scheduled hearing.

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