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Liberal, Green and ALP politicians conspire to destroy the economy

By Alan Moran - posted Friday, 25 August 2017


Yesterday, Malcolm Turnbull, unveiling the plans by Pratt for new investment in containers said, "You know everything my government does is designed to encourage Australian businesses to invest." The absurdity of this was underlined by Anthony Pratt informing us, "Our cost of energy in America is 2½ times lower than Australia.''

One fifth the costs of the Pratt business's production is energy and the facility is only possible by providing subsidies to the in-house production of this. Here is how our political leaders tell us that we now build wealth: tax energy consumers and re-allocate the funds only to the most expensive energy sources.

Like a saboteur chastising the owners of the facility he has destroyed, the PM is said to be going "to eyeball the energy companies over bills". He will doubtless say, "how can it be true that prices are rising so savagely when Finkel, assorted blood-sucking subsidy-farmers and I myself say we have fabulous renewable resources and are seeking to incentivise more of them with the outcome being cheaper prices?"

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Yesterday also saw yet another paragon or rationality, the imbecilic Victorian Premier, announced more subsidies for price-busting renewables, Mr Andrews said his plan would bring $1.3 billion in investment and 1250 construction jobs. That is more spending to generate higher costs. The doubling of energy prices that such existing measures have already caused is pigeonholed with the pretence that this is nothing to do with wind.

Untouched by economic reality, here are the fantasy figures that the Victorian government is claiming as the outcome:

Naturally, environment groups said the new Victorian measures would "turbocharge" the growing sector with the Andrews Government measures bringing an increase in windmills from about 600 to more than 2300. This will also require unnecessary new spending on transmission within the state – like filling and re-digging holes, this too will doubtless be claimed as job-enhancing investment.

Although Victorian Energy Minister Lily D'Ambrosio hand-picked some firm to provide her soporific modelling answers to the question of how much this costs, she declined to release the data. Here is a rare case of wisdom, since even she might have been slightly embarrassed in the past by claiming green-oriented policies would cost only tuppence a head, only to see the evidence of doubled energy prices and surging household bills.

Even the socialists at the left wing taxpayer financed Grattan Institute found the Victorian policy over the top. While doffing his hat to the "inevitable" renewable future, its energy spokesman Tony Wood, said the policy was a "nasty dog's breakfast", with dodgy modelling of energy bills based only on wholesale prices.

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It is very difficult to think back to history for examples of when governments engaged so fully and comprehensively in acts of vandalism to destruction the economy of a nation whose prosperity they were charged with promoting.

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Alan Moran is the principle of Regulatory Economics.

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