Tuesday, November 21, 2023

Labor’s electric dreams running on empty as new car sales tank

Australia must be running out of elitists with money to burn

Chris Bowen’s electric vehicle strategy is on track to fail after government department officials predicted fewer than a third of new car sales would be battery-operated by 2030, casting doubt on Labor’s modelling underpinning its green agenda.

The latest estimates from the federal transport department are that electric cars will make up 27 per cent of new car sales by 2030, well below the 89 per cent forecast in Labor’s pre-election modelling that helped boost its 43 per cent emissions reduction target.

The 89 per cent prediction in Labor’s modelling conducted by RepuTex was based on Anthony Albanese’s pre-election policies that have been implemented since the government was elected, including exempting electric cars from import tariffs and fringe ­benefit taxes.

The department also estimates electric cars will account for 5 per cent of nation’s small vehicle fleet by 2030, a third below Labor’s pre-election modelling of 15 per cent.

Mr Bowen, the Climate Change and Energy Minister, waited until after the election to unveil plans to implement vehicle efficiency standards but this was not part of the modelling that formed the basis of Labor’s targets that are now Australia’s international commitments.

The RepuTex modelling predicted Labor’s policies would lead to 82 per cent of Australia’s electricity being powered by renewables by the end of the decade and a $275 reduction in household ­energy bills by 2025, with analysts arguing Australia is not on track to meet these forecasts halfway through the government’s term.

Energy experts cast doubt over Labor’s electric car projections ­before the election but Mr Bowen refused to release the detailed modelling that underpinned the assumption.

RepuTex head of research Bret Harper told The Australian that the government’s electric car sales forecast “seems about right”, ­despite being less than half predicted by his company ahead of the election.

Mr Harper said his modelling included plug-in hybrid sales in its figures – but federal Labor agreed to end tax breaks for all hybrid cars by 2025 under a deal struck with the Greens.

“A few years ago plug-in ­hybrids would have been considered a green vehicle but since then it has been ruled out because it has a combustion engine and runs on fossil fuels,” Mr Harper said.

“The department figures sound perfectly plausible, anything in between the 20 to 30 per cent range seems about right.”

Ahead of the election, the Prime Minister said Labor did not make a political decision about landing on an emissions reduction target of 43 per cent by 2030, ­despite it being marginally below the uncosted 45 per cent target that hurt the party in regional areas in the 2019 election. Instead, Mr Albanese said ­RepuTex modelled the party’s policies announced in opposition and that figure came out as 43 per cent.

“What we didn’t do was adopt a target and then work back,” Mr Albanese said after announcing Labor’s 43 per cent target in 2021. “What we did was work through what are the good policy mechanisms … and then see where that came up through the modelling.”

Mr Harper revealed Labor workshopped its policies with the modelling agency and “settled” on a suite of measures that would lead to an emissions target the party was confident of taking to an election.

He said the ALP were interested in “the outcome of each of the models individually” with some having a larger impact on emissions reductions than others.

“They gave us the policies and we gave them the outcomes, there were lots of different iterations and then we settled on one,” Mr Harper said.

“Lots of different policies were considered and they were making decisions about which ones would be worth it for them.

“In an election campaign they wanted to keep their policies ­focused and wanted to get good bang for their buck in terms of what they committed.”

In a Senate estimates hearing last month, officials from the ­Department of Infrastructure, Transport, Regional Development, Communications and the Arts revealed their latest forecasts found electric vehicles were on track to make up 27 per cent of new vehicle sales by 2030.

“In 2030, it’s forecast that electric vehicles will make up (5 per cent) of the total vehicles on roads and 27 per cent of new car sales,” Surface Transport Emissions and Policy first assistant secretary Paula Stagg told estimates.

When Greens senator Janet Rice noted this was “way short of 89”, Ms Stagg said: “Yes it is”.

A spokesman for Mr Bowen said Labor’s electric vehicle strategy was “off to a flying start” with EVs jumping from 2 per cent of new car sales in May last year to almost 9 per cent.

The spokesman said the ­department’s forecasts did not take into account “all policies under the National Electric ­Vehicle Strategy, including the government’s decision to introduce fuel-efficiency standards to improve Australians access to cleaner, cheaper-to-run cars”.

The ALP is expected to introduce fuel efficiency standards – which set obligations for car suppliers to lower the total emissions of their stock to meet a national goal — by the end of the year.

Opposition climate change and energy spokesman Ted O’Brien seized on the modelling discrepancies between RepuTex and the government, saying Labor had “failed to deliver against its own targets and promises”.

“This is what happens when you pluck arbitrary political targets out of thin air and then refuse to have Treasury or the Department assess them,” Mr O’Brien said.

“Its 43 per cent emissions reduction target, 82 per cent renewable energy target, 89 per cent electric vehicle target and the all-important $275 reduction in power bills are all set to fail.”

The opposition last year raised concern a key plank of Labor’s plan to wave import tariffs on electric cars was redundant, with more than 70 per cent of car imports being exempt from tariffs under free trade deals.

Grattan Institute energy director Tony Wood warned Labor would be unable to meet its target without stronger policy levers including fuel efficiency standards.


Solutions for the hard tasks in migration, energy and housing


The first step in solving any crisis is to recognise that there is a deep problem and then isolate the causes.

Yesterday John Dahlsen and I tried to isolate the deep causes of the cost of living/inflation crisis.

Today we canvass a much harder task – the solutions. Given the mess we have created by isolating our inflationary blows to 30 per cent of the population using the blunt interest rate weapon, today’s non-interest rate solutions will foster a community focus. But there will be wide disagreement.

What makes non-interest rate solutions tough is that too many of our decision makers, influencers and commentators are remote from those in distress and so interest rates become just a number or pawn on the chess board.

The reality is that the federal, state and local governments are causing a significant proportion of Australia’s inflation and their failure to recognise the impact of their actions is causing huge damage to our low-income earners and mortgagees in distress.

Government expenditure as a percentage of GDP is increasing and GDP per capita is falling. It is the private sector that drives the economy, yet governments are allocating more and more GDP to non-productive activity beyond what is needed in a fair and just society.

We will canvas solutions via housing, energy, migration, the combination of small enterprise and productivity and the community disasters in the industrial relations bill.


If we are going to solve housing shortage problem we cannot afford to have state and local governments adding 40 per cent to the cost of dwellings.

And if the federal government can’t enforce solutions then we have to debate the current structure of state and local governments.

To reduce dwelling costs by say 20 per cent we start with the taxes and then set up simple and fast mechanisms for determining zoning rules and building permits.

Currently two-year waits are the norm and that explodes costs and deters capital. There are plenty of models overseas to fix it.

Ironically in his final months in office former Victorian premier Daniel Andrews headed down this track and Victoria needs to accelerate his scheme albeit it is already under attack. Andrews isolated areas for clear zoning and vowed that permits would be fast if basic rules were followed.

Any reduction in housing taxes can be partly funded by massive retrenchments in the bureaucracies dedicated to boosting housing costs.

An intricate plan setting up which taxes are best reduced is for others to devise. While cost reduction will help another source of state revenue will be required. The money needs to be raised by the federal government and only handed to states that dismantle their structures are boosting housing costs, including those in regional areas.

Higher GST will come to mind as will abandoning the July tax cuts. The 2019 Bill Shorten-led opposition proposed a franking credits change that was complete lunacy because it protected the mates of the ALP and almost randomly attacked others.

At the time I commented that if Bill Shorten and his then “franking credit” minister Chris Bowen wanted to raise money from franking credits then everyone must be treated equally. Perhaps only a certain percentage of a company’s profits could be to be paid in fully franked dividends.

To lift our productivity, Australian companies need to invest more in their business and for a variety of reasons, including dividend demands from shareholders, they are not investing.

An adjusted franking credit system would help productivity as well as funding the reduction in the cost of dwellings.

Another ”tax” to fund housing tex reduction is to limit the value of a residence to those receiving age pension benefits. None of those moves will be popular which is why it’s easier to keep pulverising the 30 per cent minority.

A clear danger in any move to help housing costs is that banks will increase their lending and the price of dwellings will rise to absorb the concession.

Accordingly banks will need to be curbed probably by via changing the risk-reward ratios to encourage lending to business.

When Paul Keating introduced his magnificent superannuation scheme it was possible for most people on ordinary wages to buy a house so the Keating plan was provide retirement money in addition to the dwelling.

Now people on ordinary incomes simply can’t buy a house and although the price reduction will help there is anger boiling among young people that the savings in superannuation can’t be used for what is clearly the best retirement asset –a dwelling.

In time that anger will be turned on superannuation and the movement will be greatly damaged.

Once superannuation savings can be used to fund the first dwelling the current generation of young people will embrace superannuation in the way of their parents and grandparents.

Such a move will be extremely unpopular among the “Keating” generation trustees.

We also need to tackle the building costs of apartment towers but that’s a huge subject.

When it comes to the rent crisis, states must be required to remove all special taxes on rental properties and adjust the tenancy laws to retain fairness for renters but not be onerous for families renting houses.

Negative gearing for genuine rental properties must be locked in so investors can be assured of the benefit.

If we reduce the cost of land via proper permit and zoning then overseas institutions are ready and willing to build complexes for rent in Australia. NSW is our biggest problem.


We are embarking on an incredibly high cost process to reduce carbon emissions because we have not taken into account the limited life of solar and wind installations and the enormous costs of erecting cables to deliver their power to populations plus the need for backup when solar and wind don’t produce power .

The new, low-cost, smaller and safe nuclear installations are transforming the rest of the world to add to wind and solar and we have to embrace them. But new power generating technologies are now also coming forward particularly in China.

We can achieve quick carbon reductions via gas power stations close to power lines and replacing coal. But later they will be replaced by the new technologies. Rising power costs are in part a result of bad government.


Flooding the country with a vast number of migrants when we have nowhere to house them is a disaster. Apart from students the only migrants allowed in large numbers should be those with skills ready to be used particularly in building and health.

Small enterprises and productivity:

Australia’s rapidly declining productivity contributes to enterprises passing cost rises in the prices.

In his submission to the Productivity Commission former share broker Bill Ranken points out that small and medium business employ 7.4 million Australians or two thirds of the private sector workforce but we rank 32nd for global financing of small and medium business.

Bank financing of small and medium enterprises has been slashed in favour of housing and, as discussed earlier, that needs to be reversed.

Unlike other countries we have we have few institutions that make equity capital available to these enterprises.

We need at least one political party to concentrate on policies for small and medium business.

The industrial relations bill

This bill attacks casual employment, contracting, the gig economy and has an plans to slash the powers of the ACCC so there can be a cartel between unions and big transport companies to lift prices. This should be at the top of our list but it’s at the bottom because I have covered it widely.

It will send the 30 per cent of sufferers much deeper into poverty and may in fact trigger the community revolution likely stem from the inflationary reduction burden being increasingly borne by a minority of the population.


Brickworks boss says we must prioritise bringing in tradies to address Australia’s worsening housing crisis

The boss of the nation’s largest brickmaker and leading housing materials supplier has warned any review of the country’s migration intake needed to prioritise bringing in tradies — such as fitters, turners and electricians — to work on home construction sites and address Australia’s worsening housing crisis.

Brickworks chief executive Lindsay Partridge told The Australian on Tuesday his company was predicting a pull back and slowdown in housing construction volumes through 2024 as current projects were completed, but then a building boom into 2025 as a fast-growing population desperately demanded new homes.

In recent days a national debate has blown up around migration levels with 600,000 people expected to settle in Australia this calendar year, which many economists believe is fuelling inflation, higher rents and also exacerbating the housing crisis.

In September AMP chief economist Shane Oliver called for annual net migration levels to be more than halved to 200,000 people — against a likely outcome of 500,000 people in the year to June — for the country to be able to tackle the acute housing shortage which was driving up home prices and rents.

Speaking to The Australian before the Brickworks annual general meeting on Tuesday, where he told shareholders short-term challenges across its industrial property portfolio would see a 10 per cent property valuation decline, Mr Partridge said Australia needed to bring in tradies and skilled workers as a priority.

“There is no use bringing in anybody if they are not a building tradie, you are wasting your time, because where are they going to live?”, Mr Partridge told The Australian.

“That has been my argument with governments, they need to be focusing on having immigrants that have building trades like we have done in the past so we can build the homes for everybody.

“I understand why the government let the immigration (levels) catch up and part of that was the students returning and there has been enormous labour shortages but we need trades, we need skilled people, we don’t need tertiary qualified people, we need people who are fitters and turners, electricians, these sorts of people to build these homes.”

He said the huge pipeline of federal and state government building works, such as infrastructure projects like roads, airports and ports, was also pushing up the price of building supplies and making it almost impossible to get a hold of key building materials when trying to build a new home.

“It has been made worse by all the public works, shortage of raw materials because the government is sucking it all in for their own projects. You can’t get concrete during the day sometime, you have to get it at night-time.”

At a trading update provided at the Brickworks AGM Mr Partridge said sales across its Australian and US building products business remained resilient while improved margins had resulted in first quarter earnings being ahead of the prior corresponding period in both Australia and North America. For the first quarter, sales revenue was flat in Australia and slightly higher in North America.

However, he continued to see a decline in new housing approvals, with the housing market to slow in Australia in 2024.

“Despite this positive start to the year, order intake is softening and we expect conditions to become more challenging for the remainder of fiscal 2024, as the existing pipeline of work is progressively built out.

“Looking beyond the short-term weakness, Australia appears to be on the cusp of a significant building boom, with record immigration levels exacerbating an already chronic housing under-supply issue.”

Mr Partridge said the slowdown in coming months would give Brickworks an opportunity to “sequentially take plants offline to complete maintenance work and manage stock levels”, but Bowral operations, where it currently has an order backlog of around 16 weeks, would continue.

Turning to Brickworks’s $2,2bn industrial property portfolio, which includes prime industrial land in western Sydney, Mr Partridge said the company expected a 10 per cent property valuation decline due to significant dislocation in response to economic volatility, rising interest rates and tighter credit conditions driving a change in external valuation methods.


Federal government to overhaul secrecy laws in win for media

The federal government will overhaul secrecy laws to better protect media outlets in sweeping reforms that would see journalists only prosecuted for certain breaches on the intervention of the Attorney-General.

As part of the reforms, criminal liability would be stripped from more than 100 Commonwealth secrecy offences and – in the wake of the PwC scandal – a new law would also be introduced to hold public servants to account if they “breached their obligations”.

Announced by Attorney-General Mark Dreyfus KC on Tuesday, the federal government was set to reduce the number of secrecy offences currently on the books, to both strengthen those set to remain but also improve press protections.

“Secrecy offences play an important role in preventing the unauthorised disclosure of information, which can undermine national security and harm the public interest,” Mr Dreyfus said.

“However, there have long been concerns about the number, inconsistency, appropriateness and complexity of Commonwealth secrecy offences.”

As part of the reform, criminal liability would be removed from almost 170 secrecy offences, out of the 875 total secrecy offences, and protections for press freedom and individuals providing information to Royal Commissions would be strengthened.

Under the reforms, ministerial consent would be required for the prosecution of journalists for certain secrecy offences.

“The Albanese government believes a strong and independent media is vital to democracy and holding governments to account,” Mr Dreyfus said,

“Journalists should never face the prospect of being charged, or even jailed, just for doing their jobs.”

The new safeguard, supported by the Australian Press Council, would “further enhance protections for public interest journalism”, the Attorney-General said.

Mr Dreyfus said further reductions in the number of offences would come through the enactment of a new general secrecy offence in the Criminal Code Act, that would ensure Commonwealth officers and others with confidentiality obligations would be held to account for “harm caused by breaching those obligations”.

“This new offence will also address the issues raised by the alleged PwC breach of confidentiality,” the Attorney-General said.

The reforms come after the Attorney-General instructed his department to conduct a comprehensive review in Commonwealth secrecy provisions and laws, instigated in December 2022, after a 2018 committee recommended the existing legislation be rethought.


Also see my other blogs. Main ones below:

http://dissectleft.blogspot.com (DISSECTING LEFTISM -- daily)

http://antigreen.blogspot.com (GREENIE WATCH)

http://pcwatch.blogspot.com (POLITICAL CORRECTNESS WATCH)

http://edwatch.blogspot.com (EDUCATION WATCH)

http://snorphty.blogspot.com/ (TONGUE-TIED)

http://jonjayray.com/blogall.html More blogs


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