Manufacturing reality in the fourth industrial revolution

Once upon a time there were competing manufacturers of fact, honest toilers like the Australian Productivity Commission, who could be relied upon to do solid research based on solid facts and, for example in this case, point out that the real level of subsidy is $365.1 M.

Alas, they were nominated in the Treasurer’s The Monthly exegesis for re-aligning from “rationalism” to something else.

There also used to be international voices of reason, but it appears that these are also being retooled. The latest is the International Energy Agency, a body which has been notable for its predictions that, for example, coal will be a substantial part of the energy mix until well-past 2040.

A recent headline semaphored that they have also been retooled for the new revolution: “Fossil fuel consumption subsidies globally rose above USD 1 trillion for the first time in 2022”

This shocked me. I was aware that some emerging economies subsidised fossil fuels to some extent, but why would it be so high when the prices of oil, gas and coal are currently leading to “super profits”?

Turns out the IEA is using the same manufacturing technique of reversing the normal meaning of words to produce a product useful to the ideologues. So they define anything which allows a consumer to pay less than the price of the fuel as a subsidy.

Price caps, which actually penalise the producer, are a subsidy, as are other mechanisms to stabilise prices or supply, like a reservation policy. As we fall deeper into the energy morass and Albanese and Bowen use pea and thimble tricks with government revenues to convince us that prices aren’t increasing, the headlines will grow wilder.

There has been a steady erosion of language used by governments of all stripes.

In the discussion about superannuation, for example, we are told that a lower tax rate is “concessional”, rather than it being appropriate.

It’s not a concession that we tax companies at a different rate to people, or capital gains at a different rate to income, it’s just the rate at which the tax is levied. Likewise a tax of 15% on compulsory savings is not a concession just because it is lower than some other tax.

The flip side of this is that a tax increase is represented as a “saving” to the government. No, a “saving” is when it spends less, not taxes more.

The fourth industrial revolution was on full display during the COVID crisis when organisations like Doherty and Grattan ran cover for inept, dishonest or corrupt bureaucrats and politicians. Numerical models are powerful “spinning Jennies” and “power looms” when you want to weave a difficult-to-rebut tapestry of doom and destruction. How many were going to catch COVID if we lifted lockdowns and mask mandates? 200,000?