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A Liberal Party in the 21st Century

By Sean Jacobs - posted Monday, 21 October 2019


Energy frontiers – clear about advantage

For all the discussion about how important our 'image' is in Asia, or globally, our approach to energy must generate more than a ripple of confusion.

The Adani Carmichael coal mine project, designed to satisfy India's appetite for coal, recently emerged from eight years in the approvals process, fighting more than 10 legal challenges and overcoming unique compliance hurdles including a 22,000-page environmental impact statement. Actions like these must leave India – a key regional neighbour of one billion people, a quarter of which live in poverty, and where people seek enough power just to keep the lights on – staggered at the priorities of some Australian decision-makers.

In the heat of recent public discussion around resources we've forgotten something simple and fundamental to our national story – the respect generations of Australians have placed on the land and the elements of habitat, resources, livestock and the ecosystem. For these and many other Australians there has been no value in environmental depletion and resource abuse. Indeed, the nation has pioneered when it has come to a creative and innovative balance between resource use and the environment. The stump jump plough, the combine harvester, and rust resistant wheat, for example, are less observed yet important examples of this instinctive equity throughout our history.

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But resource sector activism, and its downstream politics, is the example of over-tilting this balance in our time. It has undermined the 'open for business' message Australia needs at a time of low-cost global energy competitiveness, and where coal still provides 38 per cent of global electricity. And it has left Australians without power, given us some of the highest energy bills in the world, and second-guessed good economics by pushing billions of taxpayer money toward questionable renewable energy initiatives.

Energy frontiers – nuclear reform

This picture becomes more puzzling in terms of nuclear power. We are the world's third largest uranium exporter – contributing to 2 billion tonnes of annual global carbon reduction – but the only G20 country with nuclear power banned by federal legislation.

The reasonable opposition to nuclear energy in Australia is that there is no bipartisan or state support, no strong business case, and that we have 'missed the boat' in terms of more favourable battery technology. These are all fair points. But it is a unique litmus test for rigorous policy reform, and especially where government action has been the defining factor on whether an Australian nuclear sector thrives or fails.

A decision to exclude nuclear power, and prohibit enrichment, has set us back from exploring respective opportunities around smaller modular reactors and the potential to add billions to Australia's economy. A reasonable approach to a nuclear opportunity is to lift a ban on enrichment; aggressively support initiatives on disposal, decommissioning and waste; and ensure nuclear technology is given a space at the multi-billion-dollar energy subsidy table.

A practical approach does not mean nuclear power plants emerging overnight across Australia. But it does enable distortions in the energy industry to subside, lets a wider energy market economy find its feet, validates us as a reliable energy neighbour, and unlocks a vastly under-utilised revenue and future energy source.

Tax principles – less is more

The Liberal Party should always seek to take less money out of the pockets of all Australians. This objective is not an easy one to follow. Income tax came into effect at the start of last century but had a narrow focus to support wartime measures. But now even wartime measures are entirely incomparable to the successive commitments that governments now provide and taxpayers expect.

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Almost a decade ago, the Henry Tax Review made three points. First, the fiscal pressures on successive governments from an ageing population. Second, the need for revenue growth. And third, the consistency and application of a broad-based consumption tax.

Specifics aside, the review was the last time we had a broad national conversation on taxation without a complex plunge into EMTRs, bracket creep or LITOs. Even a simple and clear-sighted proposal to lower the corporate tax rate is often detoured by complexity or a dictation on how corporations should structure their wages.

We are often told how little difference there is between the major parties. But the clear difference is in how the parties approach business. Liberals see commercial intercourse as the strong horse that pulls the cart, to borrow from an old British prime minister, while Labor sees it as a cow to be milked.

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This article was first published on Sean Jacobs.



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About the Author

Sean Jacobs is a former public servant, political adviser and international aid worker. He currently lives in Brisbane.

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