Garnaut rubbishes Coalition's environmental policy /Newsport

Garnaut rubbishes Coalition's environmental policy

Monday March 17 2014

What a joy to hear in the past week or so two voices of disinterested reason rising above the special interest groups.

It would be a greater joy if their sensible words were listened to and acted upon.

The voices were those of Professor Ross Garnaut and Dr Ken Henry.

Both are economic rationalists of sorts – certainly proponents of free markets. But they are proponents of what works and what will produce a better and more prosperous society.

Meanwhile, on the political side, anything goes. Any cheap point is taken and good policy is opposed in the hunt for votes.

Garnaut was appearing before the Senate Environment Committee’s inquiry into the Government’s Direct Action policy on climate change. His calm demolition of the policy was withering.

Under Direct Action, the Government’s Emissions Reduction Fund would invite offers from enterprises to reduce emissions and to receive payments for those reductions.

Garnaut said this would cost between at least $4 billion and $5 billion a year more than the present (Gillard Government) scheme, with no guarantee of as good a result.

He pointed out that international pressure would result in Australia being forced to reduce emissions and the most efficient way of doing that is through the market-based emissions trading scheme which, under the Gillard-Rudd plans, would have come into effect after the initial period of the carbon tax in 2015 or 2016.

It seems quite odd that Labor promoted the market-based mechanism whereas the Coalition is going for the bureaucratic government-knows-best plan. But that is what you get when a political party puts politics before principle.

Then came the petty attack during the hearing from the Nationals’ Senator John Williams. His attack was based on the misconception that there is a climate-change industry out there of scientists and policy wonks who get personal benefit from scare campaigns about climate change, or that the whole thing is a plot to undermine the capitalist system and the democratic values that underpin it.

Of course, Garnaut – who appeared in a personal capacity, not as a business hireling like so many who put submissions to parliamentary inquiries – was only pointing out an economically sensible approach to dealing with what is an undeniably substantial risk.

That approach seems alien to the Coalition, which assumes that personal monetary profit is the only human motive.

So Williams went on the attack:

WILLIAMS (to Garnaut): One of your themes is that good public policy comes from disinterested analysis and that, to paraphrase, vested interests have taken control and distorted proper policy making. Are you one of those disinterested policy analysts?

GARNAUT: I like to see myself as part of the independent centre of the Australian polity that tries to work out what is best for Australia. That is certainly the spirit in which I have engaged in discussion of climate change mitigation over the last seven years.

WILLIAMS: You delivered two reports, the first and second Garnaut reviews, for the state and federal Labor governments to undertake. How much were you paid for those reports?

GARNAUT: I was paid at half the rate of a deputy secretary of a Commonwealth department and experienced quite a large reduction of income during the period I was working on the reports.

Ouch! You would have thought anyone with modicum shame would have stopped right there. But, no. Williams then questioned Garnaut’s honesty.

WILLIAMS: Would you take on notice your total receipts for those reports?

GARNAUT: I think that is on the public record, Senator, but I have no objection to that information being made available for the Senate. You might be surprised at the modesty.

Ouch again!

But do not expect any apology from Williams. The idea of disinterested, selfless public service is, on the basis of this performance, not in his lexicon.

My heaven, half a dep sec's salary for the time spent producing that enormous and important body of work – less than what the scurrilously doubting John gets for sitting in the Senate.

Shame, Senator, shame.

The other public-spirited figure in the media in the past week or so has been former Treasury Secretary Ken Henry.

He did a review of the tax and welfare payments system in 2010, commissioned by the former Labor government. He was told to stay away from the GST (an demonstrable vote loser) which, as a dutiful public servant, he did.

But in a personal capacity at a conference at ANU and in later media appearances he said increasing the GST was inevitable.

But his underlying message to government is more important: you cannot sustain increased spending on maternity leave; education and disability (however worthy or silly) without a commensurate increase in revenue.

Revenue has gone down from 26 per cent of GDP to 23 per cent since the vote-buying tax cuts, grey concessions and industry tax sheltering of the later Howard years.

That 3 per cent difference is roughly equal to the government deficit now.

He did not say it explicitly, but it is clearly fiscal folly to wander around the West saying the mining and carbon taxes must go, but every electoral spending promise will be met. And, bizarrely, that all the compensatory tax breaks for lower-income people to offset the carbon tax will remain.

This is the road that Latin American countries took from the 1930s on, especially in the 1950s – no-one pays tax, everyone vote for me.

Of course, by rights, it should also be electoral folly to wander around the West calling for an end to the mining and carbon taxes. The average Western Australian – who is not a big shareholder in a mine – should wonder why mining companies (with large foreign shareholdings) should be allowed to dig up the minerals which belong to all Australians and sell them overseas without paying a fair swag of tax to the owners of those minerals – Australian (and thereby Western Australian) residents.

It is not as if there is a huge amount of employment in mining. So why allow these mainly foreign-owned mining companies to extract on the cheap. If we do not have significant mining taxes, we are only cheating ourselves.

It is an astonishing tribute to the Liberal Party propaganda apparatus that they can sell the abolition of the mining tax as a "good thing" – less money for schools and hospitals and more money for dividends for foreign shareholders.

It is an astonishing tribute to the mining industry’s propaganda machine that they can chuck a mere $22 million into advertising to persuade politicians and mug voters that several billion of revenue should be given up and paid instead to dividends for mainly foreign shareholders. How dumb can we get?

Ken Henry speaks sanity. People are going to squeal if you cut benefits or raise taxes, but the long-term consequences of not standing up to those squeals will be horrible for Australians.

The mining tax, the carbon tax and the GST are all good taxes and if anything should all be a tad higher. Then we could abolish or slash the real barnacle taxes in Australia – stamp duty on home purchases and payroll taxes.

But you will only get that good sense from public-spirited, disinterested and extremely knowledgeable people like Garnaut and Henry. It is encouraging that we have such people to speak out. It is damnably dispiriting that we have politicians who ignore tham and an utterly gullible public that listens to the glib simplistic messages of those politicians rather than Garnaut’s and Henry’s more complex truths.