Abbott’s carbon tax chickens come home to roost

This is the third in a series of TPS Extra opinion pieces by Ad astra, originally posted in comments on The Political Sword.

So imprinted is it in our collective memories that it’s hard to forget Abbott’s ‘Axe the tax’ mantra. Over and again he repeated his intent to get rid of this ‘toxic tax’, which after about nine months in government he finally managed to have repealed by a reluctant Senate following some PUP contortions. It’s also hard to forget his promise that ‘Australian families would be $550 better off after its repeal’.

He failed to tell us what he already knew – that carbon pollution would rise again, and that the revenue the tax was raising would cease. So the inevitable happened. Carbon emissions, after falling as a result of the tax, began to rise again, and the revenue the tax generated dried up. Soon Joe Hockey was bemoaning his diminishing revenue base, made worse by the fall in iron ore prices and receding demand for that commodity. Suddenly we had a fiscal ‘crisis’ and a ‘budget emergency’ that Hockey felt compelled to fix by whatever draconian means he could find.

It could be argued I suppose that the sacrifice of revenue could at least be offset by the benefit that would flow to families as electricity prices plummeted and they pocketed the promised $550. But something funny happened on the way to the $550 bonanza. It hasn’t eventuated, and likely won’t.  Wouldn’t we love to know how that magic figure was generated. Hockey uses Treasury as a cop out, insisting that they generated the estimate, and therefore it must be right.  Mind you, in the past he has repeatedly disparaged Treasury estimates when that suited his political agenda, but on this occasion insists they ought to be trusted without question.

Will anyone in the MSM bother to monitor how many families get their hands on the $550 prize, a reward for voting in the Abbott government? You can lay long odds that the Murdoch media will neither monitor it, nor report it if anyone bothers to check if the $550 ever arrived, and especially if it failed to turn up. So we may never know from any authoritative source what became of the elusive $550.

But there are other information streams.  Talkback radio and social media will not remain silent.

Yesterday morning on 774 radio Melbourne, Steve Martin, standing in for Jon Faine who is on holiday, raised the matter with his listeners, and soon got a flood of responses. Steve (from Ballarat ABC) has been a fine substitute for Jon. Astute and well-informed politically, he is balanced in his appraisals and comments.

Soon a listener was annoyedly telling Steve that his electricity bills were going up, not down. We know that there are reasons for that: higher charges for transmission (the old poles and wires story), and higher charges imposed by electricity providers on the grounds that diminished demand has reduced their profits, and therefore they have to compensate for that by charging consumers more per kilowatt hour. The diminished demand is the result of several factors: consumers are deliberately using less electricity to reduce their bills; many are installing solar panels to augment their domestic supply and are therefore using less coal generated power; and many have opted to receive power from renewable sources. Because electricity companies are steadily reducing the refund on electricity generated from solar panels and fed back into the grid, householders who expected a return on their solar cell investment to offset its cost, are now very angry, and more determined than ever to use alternative energy. Moreover, as electricity prices rise, more and more consumers are reducing their dependence on the grid, resorting to solar power despite fewer inducements and lower feed-in rebates.

The death spiral of coal generated power companies has begun.

As it continues, it will become fatal for some providers. The problem for government then will become how to support failing electricity companies who will still need to supply industry and commerce with the power they need. If some of these, for example supermarkets, install solar power to meet some or all of their needs, the crisis will widen, and the death spiral will accelerate.

Talkback callers were uniform in their criticism of the power companies, angry that they have been, and would be further dudded by them, sceptical about whether they would ever see the elusive $550, and generally offside with the Abbott government, who were seen as reneging on yet another promise – the hard to get hold of $550 bonanza.

The solar energy debate continued on ABC radio this morning. It attracted many callers and text messages, portraying the great community interest in solar power. The guest, the CEO of the Australian Solar Council, among fielding many pertinent questions, asserted that some power companies are actively campaigning to end the solar industry and the Abbott government is out to destroy it via reductions to the renewable energy target.  Given Abbott’s public support for the coal industry, that assertion is plausible.

Abbott’s carbon tax chickens are coming home to roost with deafening wing-flapping. Carbon tax revenue has ceased; carbon pollution is rising again; the price of power is rising, not falling; electricity companies are charging more to offset falling revenue; householders are economising and turning more and more to power from renewables; the death spiral in which power providers are trapped continues relentlessly; the $550 seems as difficult for consumers to grasp as it ever was; yet another of Abbott’s pre-election promises is a dud, and Abbott’s trustworthiness takes yet another dive.

None of us are surprised, nor should we be.

What do you think?

Don’t miss out – make sure you also check out the current piece at TPS, ‘And that was . . . 2014‘. At this stage, the new more in-depth weekly pieces at TPS are due to return from January 25th.

Ad astra is a retired academic with years of experience in rural family practice.

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2 comments on “Abbott’s carbon tax chickens come home to roost

  1. I believe McMahon biggest problem was that he was incompetent, and it quickly showed up.

    Not so with Abbott. He is deliberately toxic. yes, his chicken are coming home to roost, in many, no all areas.

    I suspect most are happy to keep the CEF suite of bills, even if cost them $550 per annum. After all, only amounts to maybe two coffees a week. hardly noticed in most budgets.

    Yes most also know, it is not the so called toxic carbon tax that has sent their power bills into the ether.

    $10 is not a large amount to protect the environm4ent for our kids. Leaving them the inheritance of doing nothing will cost them much more.

    Through not investing in this country, we are creating big debt for them. Yes they will pay, curing us while they do.

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