tag:theconversation.com,2011:/id/topics/jay-weatherill-3653/articlesJay Weatherill – The Conversation2019-11-07T03:19:34Ztag:theconversation.com,2011:article/1265922019-11-07T03:19:34Z2019-11-07T03:19:34ZLabor’s election post-mortem warns against ‘becoming a grievance-based organisation’<figure><img src="https://images.theconversation.com/files/300562/original/file-20191107-12455-94wonw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Former minister Craig Emerson and former South Australian Premier Jay Weatherill have pinpointed key weaknesses in Labor's 2019 election strategy.</span> <span class="attribution"><span class="source">AAP/Julian Smith</span></span></figcaption></figure><p>The long-awaited ALP campaign review says Labor lost “because of a weak strategy that could not adapt to the change in Liberal leadership, a cluttered policy agenda that looked risky and an unpopular leader”.</p>
<p>“No one of these shortcomings was decisive but in combination they explain the result,” says the report from former South Australian premier Jay Weatherill and former federal minister Craig Emerson.</p>
<p>While it says Labor’s big tax policies didn’t cause the defeat, the size and complexity of its spending plans “drove its tax policies” exposing it “to a Coalition attack that fuelled anxieties among insecure, low-income couples in outer-urban and regional Australia that Labor would crash the economy and risk their jobs”.</p>
<p>Labor failed to “craft a simple narrative” bringing together its policies, the reviews says.</p>
<p>Its analysis is damning while seeking to be positive for the future, at a time when the ALP remains in shock at its unexpected loss and divided and uncertain about the way forward.</p>
<p>Looking ahead, the report says “policies can be bold but should form part of a coherent Labor story, be limited in number and be easily explainable, making them less capable of misrepresentation”.</p>
<p>“Labor should position itself as a party of economic growth and job creation. Labor should adopt the language of inclusion, recognising the contribution of small and large businesses to economic prosperity, and abandon derogatory references to ‘the big end of town’.”</p>
<p>The report’s emphasis on the importance of Labor tapping into economic growth and being attuned to business reflects the direction in which Anthony Albanese has been seeking to take the party since becoming leader.</p>
<p>The criticism of the “big end of town” language is a direct slap at the rhetoric of Bill Shorten.</p>
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<p>Just ahead of the report’s release, Shorten said in a Thursday statement that “were the universe to grant reruns” he would have fewer campaign messages, put more emphasis on the opportunities provided by renewable energies, and take a different position on franking credits.</p>
<p>He also said he should have promised bigger immediate tax cuts for working people.</p>
<p>Shorten reiterated his intention to remain in politics for the next 20 years.</p>
<p>The report warns that “care needs to be taken to avoid Labor becoming a grievance-based organisation,” saying it “has been increasingly mobilised to address the political grievances of a vast and disparate constituency”.</p>
<p>“Working people experiencing economic dislocation caused by technological change will lose faith in Labor if they do not believe the party is responding to their needs, instead being preoccupied with issues not concerning them or that are actively against their interests.</p>
<p>"A grievance-based approach can create a culture of moving from one issue to the next, formulating myriad policies in response to a broad range of concerns.”</p>
<p>Addressing the swing against the ALP by low-income workers, the report says the party’s “ambiguous language on Adani, combined with some anti-coal rhetoric, devastated its support in the coal mining communities of regional Queensland and the Hunter Valley.”</p>
<p>In contrast, higher-income urban voters worried about climate change moved to Labor, despite the potential impact on them of the opposition’s tax policies.</p>
<p>Labor lost some Christian voters, “particularly devout, first-generation migrant Christians”, but the review does not find that people of faith in general deserted Labor.</p>
<p>The review does not believe Labor’s values - “improving the job opportunities, security and conditions of working Australians, fairness, non-discrimination on the basis of race, religion and gender, and care for the environment” - were the problem at the election, and says Labor should retain its commitment to these values.</p>
<p>“Labor’s policy formulation should be guided by the national interest, avoiding any perception of capture by special interest groups.”</p>
<p>As a debate has raged within the ALP on how Labor should reshape its climate change policy, and notably its targets, the report says: “A modern Labor Party cannot neglect human-induced climate change. To do so would be environmentally irresponsible and a clear electoral liability.</p>
<p>"Labor needs to increase public awareness of the costs of inaction on climate change, respect the role of workers in fossil fuel industries and support job opportunities in emissions-reducing industries while taking the pressure off electricity prices.”</p>
<p>The report says that high expectations of victory caused Labor incorrectly to assume it had a stronger campaign machine and better digital capacity than the Coalition. It also led to “little consideration being given to querying Labor’s strategy and policy agenda”.</p>
<p>Following Clive Palmer’s huge advertising blitz, the review urges caps on spending by high wealth individuals. Also, influenced by the scare campaign that wrongly asserted Labor had in mind a death tax, the review said the issue of truth in advertising should be looked at.</p><img src="https://counter.theconversation.com/content/126592/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The long-awaited review has pinpointed key flaw’s in Labor’s strategy leading up to the 2019 federal election, including a cluttered policy agenda and an unpopular leader.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/935942018-03-26T03:40:36Z2018-03-26T03:40:36ZFactCheck Q&A: are South Australia’s high electricity prices ‘the consequence’ of renewable energy policy?<figure><img src="https://images.theconversation.com/files/211112/original/file-20180320-31602-918p7m.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Minister for Urban Infrastructure and Cities Paul Fletcher, speaking on Q&A.</span> <span class="attribution"><span class="source">ABC Q&A</span></span></figcaption></figure><p><strong>The Conversation fact-checks claims made on Q&A, broadcast Mondays on the ABC at 9.35pm. Thank you to everyone who sent us quotes for checking via <a href="http://www.twitter.com/conversationEDU">Twitter</a> using hashtags #FactCheck and #QandA, on <a href="http://www.facebook.com/conversationEDU">Facebook</a> or by <a href="mailto:checkit@theconversation.edu.au">email</a>.</strong></p>
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<figcaption><span class="caption">Excerpt from Q&A, March 19, 2018.</span></figcaption>
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<p>Now, the consequence of [Jay Weatherill’s] policies was that South Australians faced the highest electricity charges, the highest retail electricity charges, in the country.</p>
<p><strong>– Minister for Urban Infrastructure and Cities Paul Fletcher, <a href="https://youtu.be/9JRkHDUAAH0">speaking on Q&A</a>, March 19, 2018</strong></p>
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<p>During an <a href="http://www.abc.net.au/tv/qanda/txt/s4805964.htm">episode of Q&A</a>, Minister for Urban Infrastructure and Cities Paul Fletcher said that South Australia has the “highest retail electricity charges in the country”. That statement in itself <a href="https://theconversation.com/factcheck-does-south-australia-have-the-highest-energy-prices-in-the-nation-and-the-least-reliable-grid-92928">is correct</a>.</p>
<p>But Fletcher went on to say that the high prices were “the consequence” of former SA Premier Jay Weatherill’s renewable energy policies, which included the introduction of a 50% renewable energy target, <a href="http://www.abc.net.au/news/2017-04-10/south-australia-renewable-energy-target-reached-early/8429722">met in 2017</a>.</p>
<p>Was Fletcher right?</p>
<h2>Checking the source</h2>
<p>In response to a request for sources and comment, a spokesperson for Fletcher pointed The Conversation to the Australian Energy Market Commission’s 2017 Residential Electricity Price Trends <a href="https://www.aemc.gov.au/markets-reviews-advice/2017-residential-electricity-price-trends">report</a>, wholesale electricity price data from the Australian Energy Market Operator, and a 2017 Australian Competition and Consumer Commission <a href="https://www.accc.gov.au/system/files/Retail%20Electricity%20Inquiry%20-%20Preliminary%20report%20-%2013%20November%202017.pdf">report</a>, which stated that: </p>
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<p>… the combination of significant network investment over the past decade, recent increases to gas prices, more concentrated wholesale markets, and the transition from large scale synchronous generation to variable and intermittent renewable energy resources has had a more pronounced effect on retail prices and number of offers in South Australia than any other state in the National Electricity Market.</p>
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<p>You can read the full response from Fletcher’s office <a href="https://theconversation.com/full-response-from-a-spokesperson-for-paul-fletcher-for-a-factcheck-on-electricity-prices-and-renewable-energy-93662">here</a>.</p>
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<h2>Verdict</h2>
<p>Paul Fletcher was correct to say that South Australia has the highest retail electricity prices in Australia.</p>
<p>Current prices for the typical South Australian customer are 37.79 cents per kilowatt-hour (c/kWh). The Australian Capital Territory has the lowest retail electricity prices in Australia, at around 23.68 c/kWh.</p>
<p>But there are many factors that affect retail electricity prices. Increasing levels of renewable energy generation is just one.</p>
<p>Other factors include network costs, gas prices, changes in supply and demand dynamics and market competition issues.</p>
<p>Therefore, Fletcher’s assertion that South Australia’s high retail electricity prices are “the consequence” of former Premier Jay Weatherill’s renewable energy policies is incorrect.</p>
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Read more:
<a href="https://theconversation.com/factcheck-does-south-australia-have-the-highest-energy-prices-in-the-nation-and-the-least-reliable-grid-92928">FactCheck: does South Australia have the 'highest energy prices' in the nation and 'the least reliable grid'?</a>
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<h2>Does South Australia have the highest retail electricity prices in the nation?</h2>
<p>First, a quick terminology reminder. “Energy” is a broad term that includes sources such as petrol, diesel, gas and renewables, among other things. “Electricity” is a specific form of energy that can be produced from many different sources.</p>
<p>The “retail electricity price” is what you’ll typically see in your home electricity bill, and is usually expressed in cents per kilowatt-hour (c/kWh). </p>
<p>According the Australian Energy Market <a href="https://www.aemc.gov.au/markets-reviews-advice/2017-residential-electricity-price-trends">2017 Residential Electricity Price Trends</a> report, South Australia does indeed have the highest retail prices in the nation. Current prices for the typical South Australian customer are 37.79c/kWh.</p>
<p>The lowest retail electricity prices in the country are in the Australian Capital Territory, where the typical customer pays around 23.68c/kWh. </p>
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<p>The retail electricity price includes the wholesale price of the electricity, the network costs (or the “poles and wires” that bring the electricity to your home), retailing costs, and levies related to “green schemes” (such as the renewable energy target or solar feed-in tariffs). </p>
<p>The chart below shows how the different components contributed the electricity price increase in South Australia between 2007-08 and 2015-16.</p>
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<p>For many years the drivers for retail prices have been network costs – which have very little to do with renewables.</p>
<p>But over the past 18 months, there has also been a increase in <em>wholesale</em> electricity prices across the entire National Electricity Market – the interconnected power system that covers Queensland, New South Wales, the Australian Capital Territory, Victoria, South Australia and Tasmania.</p>
<p>A range of factors have contributed to this.</p>
<p>These include the increase in gas prices, and the tightening of the supply-demand balance.</p>
<p>The closures of South Australia’s <a href="https://en.wikipedia.org/wiki/Northern_Power_Station_(South_Australia)">Northern Power Station</a> in 2016 and Victoria’s <a href="https://en.wikipedia.org/wiki/Hazelwood_Power_Station">Hazelwood Power Station</a> have contributed to a reduction in electricity supply (capacity).</p>
<p>The ACCC is also <a href="https://www.accc.gov.au/system/files/Retail%20Electricity%20Inquiry%20-%20Preliminary%20report%20-%2013%20November%202017.pdf">investigating</a> “transfer pricing” – which is when a business that’s an energy generator as well as a retailer shifts costs from one part of its business to another. </p>
<h2>Are the prices ‘the consequence’ of Weatherill’s renewable energy policy?</h2>
<p>No. Even if wholesale prices become the main driver of retail prices, it’s not accurate to place the blame squarely on renewables. </p>
<p>Increased renewable energy generation may have contributed to decisions for some power plants to close. But so would other factors – such the <a href="http://www.abc.net.au/news/2016-12-01/worksafe-notices-detail-extent-of-repairs-needed-at-hazelwood/8082318">A$400 million safety upgrade</a> required for the Hazelwood power plant to have stayed open.</p>
<p>As mentioned above, other factors such as gas prices and competition issues have also contributed to increases in wholesale electricity prices. And as shown below, these are not confined to South Australia.</p>
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<img alt="" src="https://images.theconversation.com/files/210029/original/file-20180313-30979-jg4ezc.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/210029/original/file-20180313-30979-jg4ezc.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=377&fit=crop&dpr=1 600w, https://images.theconversation.com/files/210029/original/file-20180313-30979-jg4ezc.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=377&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/210029/original/file-20180313-30979-jg4ezc.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=377&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/210029/original/file-20180313-30979-jg4ezc.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=473&fit=crop&dpr=1 754w, https://images.theconversation.com/files/210029/original/file-20180313-30979-jg4ezc.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=473&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/210029/original/file-20180313-30979-jg4ezc.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=473&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Electricity futures prices for 2017–18.</span>
<span class="attribution"><span class="source">ACCC 2017, Retail Electricity Pricing
Inquiry, Preliminary report (page 56)</span></span>
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<p>Gas prices are particularly important in the South Australian context, which is the most gas-dependent region in the National Electricity Market. </p>
<p>In addition, the South Australian market is the <a href="https://www.aer.gov.au/publications/state-of-the-energy-market-reports/state-of-the-energy-market-may-2017">most concentrated in terms of competition</a>.</p>
<p>So, Fletcher was not correct to say that South Australia’s high electricity prices are “the consequence” of Weatherill’s renewable energy policies. </p>
<p>Indeed, a large proportion of the existing renewable investment in South Australia has been financed as a result of the federal Renewable Energy Target, introduced by the Howard government, rather than state policy. <strong>– Dylan McConnell</strong></p>
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<h2>Blind review</h2>
<p>I agree with the verdict.</p>
<p>The price question is not contentious. South Australia has the highest retail electricity prices in Australia.</p>
<p>But no single factor or decision is responsible for the electricity prices we endure today.</p>
<p>The prices are the result of <a href="https://theconversation.com/a-high-price-for-policy-failure-the-ten-year-story-of-spiralling-electricity-bills-89450">many different policies and pressures</a> at every step of the electricity supply chain. <strong>– David Blowers</strong></p>
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<span class="caption">The Conversation FactCheck is accredited by the International Fact-Checking Network.</span>
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<p><em>The Conversation’s FactCheck unit was the first fact-checking team in Australia and one of the first worldwide to be accredited by the International Fact-Checking Network, an alliance of fact-checkers hosted at the Poynter Institute in the US. <a href="https://theconversation.com/the-conversations-factcheck-granted-accreditation-by-international-fact-checking-network-at-poynter-74363">Read more here</a>.</em></p>
<p><em>Have you seen a “fact” worth checking? The Conversation’s FactCheck asks academic experts to test claims and see how true they are. We then ask a second academic to review an anonymous copy of the article. You can request a check at <a href="mailto:checkit@theconversation.edu.au">checkit@theconversation.edu.au</a>. Please include the statement you would like us to check, the date it was made, and a link if possible.</em></p><img src="https://counter.theconversation.com/content/93594/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Dylan McConnell has received funding from the AEMC's Consumer Advocacy Panel and Energy Consumers Australia.</span></em></p><p class="fine-print"><em><span>David Blowers does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>On Q&A, Minister for Urban Infrastructure and Cities Paul Fletcher said South Australia’s high electricity prices were “the consequence” of Jay Weatherill’s renewable energy policies. Is that right?Dylan McConnell, Researcher at the Australian German Climate and Energy College, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/936642018-03-21T19:33:30Z2018-03-21T19:33:30ZAs the Libs claim South Australia, states are falling into line behind the National Energy Guarantee<p>Former prime minister Paul Keating used to say that when you change the government, you change the country. On Saturday South Australians changed their government, and now the country’s energy policy could finally change – and for the better, if current policy uncertainty is put to bed.</p>
<p>Prime Minister Malcolm Turnbull certainly seems to think it will. He is already claiming the SA election result as an <a href="https://www.sbs.com.au/news/sa-libs-win-endorses-fed-energy-plan-pm">endorsement</a> of his <a href="https://www.pm.gov.au/media/national-energy-guarantee-deliver-affordable-reliable-electricity">National Energy Guarantee</a>. </p>
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Read more:
<a href="https://theconversation.com/how-the-national-energy-guarantee-could-work-better-than-a-clean-energy-target-85821">How the National Energy Guarantee could work better than a clean energy target</a>
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<p>Incoming Liberal Premier Steven Marshall has consistently supported a national approach to energy policy, and on his first day in office he pledged to <a href="http://www.afr.com/business/energy/electricity/new-sa-premier-steven-marshall-will-work-closely-with-turnbull-government-20180318-h0xnbo">end South Australia’s go-it-alone approach</a>.</p>
<p>But while South Australia’s support is vital, the National Energy Guarantee – which aims to reduce greenhouse gas emissions and ensure reliability in Australia’s National Electricity Market – is not a done deal yet.</p>
<h2>Designing the guarantee</h2>
<p>The independent <a href="http://www.coagenergycouncil.gov.au/energy-security-board">Energy Security Board</a> recommended a National Energy Guarantee last October, and the Turnbull government quickly adopted it as <a href="https://www.pm.gov.au/media/national-energy-guarantee-deliver-affordable-reliable-electricity">policy</a>.</p>
<p>In November, at <a href="http://www.coagenergycouncil.gov.au/publications/15th-energy-council-ministerial-meeting">a meeting of the COAG Energy Council</a>, New South Wales, Victoria and Tasmania voted for work on a detailed design of the guarantee. South Australia and the ACT voted against (Queensland was absent).</p>
<p>The weekend’s election result seems to have brought South Australia into the tent; it certainly draws a line under the tensions between the outgoing premier, Jay Weatherill, and Federal Energy Minister Josh Frydenberg, which bubbled over in a <a href="https://grattan.edu.au/news/an-energy-slanging-match-is-not-a-hopeful-sign/">public stoush</a> last year. </p>
<p>But <a href="http://www.canberratimes.com.au/federal-politics/political-news/turnbull-government-set-for-david-and-goliath-battle-over-energy-plan-20180319-p4z52p">the ACT government</a> still has concerns about the guarantee, and all states will be holding out for more detail on the policy.</p>
<p>In February the ESB released a <a href="http://www.coagenergycouncil.gov.au/publications/energy-security-board-national-energy-guarantee-consultation-paper">consultation paper</a> on the design of the guarantee, which indicated that there is much work still to be done. </p>
<p>The design should not be rushed – getting the detail right is crucial if Australia is to tackle climate change and maintain a reliable electricity supply at lowest cost.</p>
<p>The guarantee is a means to an end, not the end itself. It is neither pro-coal nor pro-renewables. It is a mechanism to achieve national targets. The <a href="https://theconversation.com/australias-2030-climate-target-puts-us-in-the-race-but-at-the-back-45931">emissions target itself</a> – a 26-28% cut in greenhouse gas emissions relative to 2005 levels by 2030 – remains a political choice of the federal government. </p>
<p>The design must be sufficiently robust to produce the desired outcomes, but should also be flexible enough to allow the emissions target and required level of reliability to change over time. People’s preferences change, new technologies are emerging, and current and future governments will almost certainly need to increase emissions targets under the <a href="https://theconversation.com/the-paris-climate-agreement-at-a-glance-50465">Paris Agreement</a>.</p>
<p>A design that is flexible in response to alternative political choices has a much better chance of getting unanimous support from the states and territories. A state or territory supporting the guarantee need not endorse the current target.</p>
<h2>What next for renewables?</h2>
<p>Weatherill famously declared South Australia’s election to be “<a href="https://indaily.com.au/news/local/2017/07/14/election-referendum-renewables-says-weatherill/">a referendum on renewable energy</a>”. His defeat almost certainly means that South Australia’s 50% renewable energy target, which Weatherill had pledged to <a href="http://www.abc.net.au/news/2018-02-21/sa-to-be-powered-by-75-per-cent-renewables-by-2025/9470408">extend to 75%</a>, will be <a href="https://www.saliberal.org.au/liberal_energy_solution">abolished</a>. </p>
<p>But South Australia’s wind, solar and battery projects aren’t going anywhere. While there has been some concern about <a href="http://www.abc.net.au/news/2018-03-19/sa-liberals-tight-lipped-on-musk-solar-battery-storage-plan/9564784">the future of individual projects</a>, the change in policy won’t affect existing solar and wind farms. Marshall has promised to honour existing contracts. South Australia remains the location of choice for many projects under the federal <a href="https://theconversation.com/au/topics/renewable-energy-target-8912">Renewable Energy Target</a>.</p>
<p>The National Energy Guarantee would not replace or preclude state targets for renewable energy. They achieve different things. A renewable energy target is aimed at guiding and shaping industry investment, rather than specifically reducing emissions (although states have used renewable energy targets in recent years to attempt to cut emissions in the absence of a credible federal scheme). </p>
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<a href="https://theconversation.com/will-the-national-energy-guarantee-hit-pause-on-renewables-85978">Will the National Energy Guarantee hit pause on renewables?</a>
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<p>South Australia is likely to continue to contribute strongly to a national emissions reduction target, with or without a local renewable energy target. High levels of intermittent renewable energy in the state will require backup generation and demand response to meet the reliability obligation.</p>
<p>Under the guarantee, states and territories can still choose to deliver greater emissions reductions than the federal target. They can do this through renewable energy targets or more direct emissions policies. But individual states that want to pursue these deeper cuts could end up doing the heavy lifting for the nation, unless states can collectively agree to beat the national target. </p>
<h2>Unanimous support still needed</h2>
<p>The COAG Energy Council will meet again on April 20 to discuss the future of the National Energy Guarantee. With South Australia’s support looking much more likely this time around, the policy can be expected to remain on the table. But all states and territories will no doubt reserve judgement until they have the final design, and that won’t be until the second half of 2018.</p>
<p>Australia is edging closer to finally having a national, integrated, energy and climate policy. We’ve <a href="https://theconversation.com/ten-years-of-backflips-over-emissions-trading-leave-climate-policy-in-the-lurch-69641">been here before</a>, and previously have let the perfect become the enemy of the good. Let’s not make that mistake again – let’s get a foundation in place to build on. So many politicians have fallen trying. But perhaps Weatherill will be the last.</p><img src="https://counter.theconversation.com/content/93664/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Kate Griffiths does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The end of Jay Weatherill’s government has removed a significant obstacle to progress on the federal National Energy Guarantee – even though we don’t yet know what the full policy will look like.Kate Griffiths, Senior Associate, Grattan InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/935532018-03-18T02:31:26Z2018-03-18T02:31:26ZAfter 16 years, electoral dynamics finally caught up with Labor in South Australia<figure><img src="https://images.theconversation.com/files/210895/original/file-20180318-104699-1uhroka.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Labor leader Jay Weatherill concedes defeat as South Australians opt to toss the party out after 16 years.</span> <span class="attribution"><span class="source">AAP/David Mariuz</span></span></figcaption></figure><p>History, finally, caught up with Labor in South Australia. After 16 years in office, and seeking a record fifth term, Jay Weatherill’s Labor has conceded to the Liberals. </p>
<p>While the results have not been finalised, the current state of play has Steven Marshall’s Liberals securing a majority. In the projected seat tally, the Liberals have won 24, Labor 18, independents three, and two seats remain undecided. This is a remarkable and unexpected result for a range of reasons.</p>
<p>Elections, as <a href="https://www.smh.com.au/politics/federal/xenophon-falls-short-in-major-election-disappointment-20180317-p4z4wf.html">Nick Xenophon is discovering</a>, have a cold, hard way of clarifying the minds of the voters. </p>
<p>Only two days before the election, most of the major betting agencies had far more favourable odds for a Labor win. <a href="https://www.smh.com.au/politics/federal/are-the-punters-better-than-the-pollsters-at-predicting-elections-20160528-gp64e9.html">Betting odds</a> are sometimes seen as better predictors of election results than polls.</p>
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Read more:
<a href="https://theconversation.com/liberals-win-south-australian-election-as-xenophon-crushed-while-labor-stuns-the-greens-in-batman-93355">Liberals win South Australian election as Xenophon crushed, while Labor stuns the Greens in Batman</a>
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<p>So, as we still pick over the results, what seemed to go right for the Liberals and so wrong for Nick Xenophon’s SA-Best team? </p>
<p>For the Liberals, while this was a win, it was not as resounding as, say, <a href="http://www.abc.net.au/elections/sa/2006/news/stories/1595270.htm?elections/sa/2006/">Mike Rann’s 2006</a> “Rann-slide”. Yet, it has been a result a long time coming, having won the popular vote in three of the past four state elections. Marshall’s campaign centred on him being a “safe” change-agent. </p>
<p>Marshall’s success lies in a range of incremental factors. First, he put to bed the historic divisions in the party. <a href="https://www.theaustralian.com.au/news/inquirer/sa-liberal-leader-ready-for-life-under-marshall-law/news-story/c64c7046b37201dff574cefa8f588e61">In a striking insight</a>, he followed John Howard’s advice not to have votes at shadow cabinet meetings, but decide by consensus. New leadership, coupled with the misery of the long years in the wilderness, helped cement party unity.</p>
<p>Second, Marshall’s policy agenda has remained consistent and undramatic. When he launched his first 100 days in office, this was a smart relaunch of policies already well-known. It might have lacked a “wow” factor, but this has proven to be an asset. South Australians will now see cuts to household bills, a roll-out of a home battery scheme, and a push to deregulate working hours. </p>
<p>Third, the Liberals finally managed to make the most of the ammunition of Labor’s 16 years in office, especially the release of the <a href="http://www.abc.net.au/news/2018-02-28/icac-report-on-oakden-aged-care-home-released/9492008">Oakden report</a> into abuse at the state-run mental health facility. The Liberals capitalised on this with a <a href="http://www.adelaidenow.com.au/news/south-australia/sa-oakden/video/378f935c807cd9b3877879b7093dd524">powerful campaign ad</a> by the son of one of the victims, saying he “had enough” of Labor. </p>
<p>Yet, the story of the night was the deflation of the Xenophon SA-Best threat to the major parties. SA-Best looks set to secure just 13.7% of the vote, much lower than even lowered expectations. </p>
<p>The Xenophon vote fail to carry through – arguably for the following reasons. </p>
<p>First, there was overreach by Xenophon, perhaps mistakenly buoyed by the <a href="https://theconversation.com/nick-xenophon-could-be-south-australias-next-premier-while-turnbull-loses-his-25th-successive-newspoll-89290">December Newspoll</a> that not only suggested his party could hoover up a third of the vote, but also dangling the prospect of Xenophon as future premier.</p>
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<img alt="" src="https://images.theconversation.com/files/210896/original/file-20180318-104673-7e925n.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/210896/original/file-20180318-104673-7e925n.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=430&fit=crop&dpr=1 600w, https://images.theconversation.com/files/210896/original/file-20180318-104673-7e925n.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=430&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/210896/original/file-20180318-104673-7e925n.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=430&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/210896/original/file-20180318-104673-7e925n.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=540&fit=crop&dpr=1 754w, https://images.theconversation.com/files/210896/original/file-20180318-104673-7e925n.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=540&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/210896/original/file-20180318-104673-7e925n.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=540&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Nick Xenophon and SA-Best may have been too ambitious at this election, with a disappointing result.</span>
<span class="attribution"><span class="source">AAP/Kelly Barnes</span></span>
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<p>Running 36 SA-Best candidates proved a stretch too far for South Australian voters. </p>
<p>Second, the SA-Best machine seemed ill-equipped and under-prepared for the campaign. Policy announcements came late in the campaign, giving the veneer of “policy on the run”.</p>
<p>In other key seats, some untested SA-Best candidates met difficult challenges. In Colton, Matt Cowdrey, the Liberal candidate and former Paralympian, easily saw off the SA-Best candidate. In Mawson – a key SA-Best target – Leon Bignell the Labor (now former) minister ran a strong campaign to damage Xenophon hopes.</p>
<p>The thinness of the SA-Best “machine” might prove a factor, as candidates were recruited late in the piece, and some did not seem quite ready for the media scrutiny, nor have enough time to embed themselves as the SA-Best candidate in their seats. </p>
<p>Voters also seem to have pulled back from the unclear positioning of SA-Best. After the initial honeymoon, SA-Best shifted from its traditional “watchdog” role – previously held by the Democrats – to presenting as a “kingmaker”. This brought additional scrutiny and expectation, pushing Xenophon onto the back foot.</p>
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Read more:
<a href="https://theconversation.com/as-south-australia-heads-to-the-polls-the-state-is-at-a-crossroads-93265">As South Australia heads to the polls, the state is at a crossroads</a>
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<p>In the final weeks of the campaign, Xenophon was playing to his familiar strength – gambling reform – but voters expected a more embracing policy agenda. </p>
<p>Finally, the Australian political system is undergoing change, but the institutional factors continue to suppress minor party challengers. The lower house, with its majoritarian electoral system, requires a strong performance by the next best-placed challenger. Three-into-two does not easily go. </p>
<p>It is notable too, that the election did not go as planned for other parties. The Australian Conservatives clearly failed to capitalise on their merger with Family First, with a drop in their vote share to 3.1%.</p>
<p>For Labor, the result is far from a disaster, and offers them the chance to rebuild, perhaps with a new leader in Peter Malinauskas.</p>
<p>Critically, Australian democracy seems more accelerated, with Liberal governments in Victoria and Queensland ejected after just one term. Marshall will need to move quickly to ensure his new government does not follow this new trend.</p><img src="https://counter.theconversation.com/content/93553/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rob Manwaring is affiliated with The Fabians.</span></em></p>While Labor lost in South Australia it was far from a disaster, and new Liberal premier Steven Marshall will need to move quickly to ensure he does not test voters’ patience.Rob Manwaring, Senior Lecturer, Politics and Public Policy, Flinders UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/934852018-03-16T02:21:54Z2018-03-16T02:21:54ZVIDEO: Michelle Grattan on a ‘super Saturday’ of elections<figure>
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<p>Michelle Grattan speaks with Lawrence Pratchett about this weekend’s federal Batman byelection and South Australian state election. They discuss the mood among voters, issues surrounding Adani and Bill Shorten’s tax policy announcement, as well as the federal implications of the South Australian result.</p><img src="https://counter.theconversation.com/content/93485/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Michelle Grattan speaks with Lawrence Pratchett about this weekend’s elections.Michelle Grattan, Professorial Fellow, University of CanberraLawrence Pratchett, Dean of Business, Government and Law, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/932652018-03-15T19:09:23Z2018-03-15T19:09:23ZAs South Australia heads to the polls, the state is at a crossroads<p>Uncertainty is nothing new to South Australia. Over the past decade, the state has faced a range of economic and political unknowns. </p>
<p>In 2014, BHP’s decision not to <a href="https://www.smh.com.au/business/companies/bhp-changes-its-tune-on-olympic-dam-project-20140802-zzp9d.html">expand its Olympic Dam site</a> triggered a period of economic uncertainty. A year later, South Australia had the highest unemployment in the nation. Further, the state was hit with the <a href="http://www.abc.net.au/news/2017-10-08/holden-closure-australia-history-car-manufacturing/9015562">closure of the Holden plant</a>, the uncertainty over the <a href="http://www.abc.net.au/news/2017-12-22/billion-dollar-whyalla-plan-unveiled/9282706">steelworks in Whyalla</a>, and <a href="https://theconversation.com/what-caused-south-australias-state-wide-blackout-66268">the blackouts of 2016</a>. </p>
<p>The incumbent Labor government, seeking a record fifth term in office, has been active. Premier Jay Weatherill, and his indefatigable treasurer, Tom Koutsantonis, are keen to birth a “new economy” in South Australia. In effect, the government is trying to diversify and strengthen the state since the decline of the resources boom. </p>
<p>As South Australians head to the polls on Saturday, it remains unclear which vision of the state’s future will most likely attract their vote.</p>
<p>Labor is gambling big by spending big. Following classic Keynesian economics, its stimulus agenda includes a A$2 billion infrastructure spend, high-speed internet, extending the tram network, and a bold target of 75% renewables by 2025. </p>
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Read more:
<a href="https://theconversation.com/factcheck-would-pokies-reform-in-south-australia-wipe-out-many-of-26-000-jobs-93189">FactCheck: would pokies reform in South Australia wipe out 'many' of 26,000 jobs?</a>
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<p>In contrast, Steven Marshall’s Liberals favour cuts to payroll tax, cuts to electricity bills, and less ambitious infrastructure spending (40,000 homes with solar and batteries, compared with Labor’s 50,000).</p>
<p>In addition, the Liberals have focused on improving electricity inflow from interstate, and new agencies to improve productivity and infrastructure development. They were also pointing to Labor’s policy problems in TAFE, health and – most notably – <a href="http://www.abc.net.au/news/2018-02-28/icac-report-on-oakden-aged-care-home-released/9492008">child protection and mental health</a>.</p>
<p>Marshall has been more sure-footed in his second tilt at outwitting Labor’s formidable electoral machine. He has seemingly put to bed internal party divisions that haunted previous campaigns.</p>
<p>The Liberals are also hoping they can capitalise on a favourable <a href="http://www.aec.gov.au/Electorates/Redistributions/2017/sa/index.htm">electoral boundary redistribution</a>. The Liberal vote has long been concentrated in rural seats, and Marshall is seeking broader appeal with his vision for a “Strong Plan for Real Change”. </p>
<p>What was looking like a relatively classic Labor versus Liberal fight was thrown into confusion with Nick Xenophon’s <a href="https://theconversation.com/xenophons-shock-resignation-from-senate-to-run-for-state-seat-85322">return to South Australian politics</a>. An initial honeymoon saw a surge of support for his SA-Best party, now running 36 candidates across the 47 seats in the lower house.</p>
<p>In December, <a href="https://theconversation.com/nick-xenophon-could-be-south-australias-next-premier-while-turnbull-loses-his-25th-successive-newspoll-89290">a shock Newspoll</a> result had SA-Best’s primary vote at a huge 32%. Subsequent polls seem to suggest this might have deflated.</p>
<p>Xenophon is seeking to capitalise on what he perceives to the “broken politics” of the old two-party axis, with a tired Labor government and the Liberals with a leader whose personal popularity has rarely exceeded the premier’s. </p>
<p>Xenophon has managed something that Australian politics has not seen since the late 1990s, with a centrist challenger posing an electoral threat to the major parties. The vote for the two major parties has been in decline for some time in Australia. The 2016 federal election produced the largest-ever vote for the minors. </p>
<p>South Australian politics, likes its economy, is also in transition. </p>
<p>Ironically, the surge in support for the SA-Best candidates seems to have had a negative impact on the other minor parties. Polling suggests the vote share for the Greens is down from about 10% to 6%. In the Legislative Council, Kelly Vincent, the Dignity candidate, looks set to lose her seat. Limited media space means the other minors are struggling to get heard.</p>
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Read more:
<a href="https://theconversation.com/south-australian-soft-voters-inclined-to-change-their-government-but-not-impressed-with-the-alternative-93198">South Australian 'soft' voters inclined to change their government but not impressed with the alternative</a>
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<p>The other striking development is that this is the first election to test the electoral strength of Cory Bernardi’s Australian Conservatives since their merger with Family First (another party with South Australian origins). The Australian Conservatives have taken up one of Labor’s abandoned causes: to establish a nuclear waste facility in South Australia.</p>
<p>With an electoral race this uncertain and with no clear front-runner, many close seats will come down to preferences and pre-polls. </p>
<p>Remarkably for a leader, Marshall has already cast his vote. Indeed, the Liberals are wagering that like-minded voters will also vote early, and they hope to capitalise on the release of the <a href="https://icac.sa.gov.au/content/oakden">ICAC report</a> into the abuse at the Oakden mental health facility. The report damaged Labor’s campaign a fortnight out from the polls.</p>
<p>Labor, ever-savvy, is playing a clever game with preferences, splitting the ticket across the state between SA-Best and the Liberals. </p>
<p>Intriguingly, Labor has done a deal with the Australian Conservatives to secure their preferences in three marginal Labor seats (Light, Lee and Newland), in return putting the Conservatives third on their Legislative Council ticket. </p>
<p>On Saturday night, the focus will be on the seat of Hartley – a microcosm of the election. Nick Xenophon will be seeking to beat Liberal incumbent Vincent Tarzia and fend off former ALP minister Grace Portolesi. The outcome of this three-horse race is still uncertain, much like the state’s wider economic and political future.</p><img src="https://counter.theconversation.com/content/93265/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rob Manwaring is a member of The Fabians. </span></em></p>Much is in play for South Australia in this weekend’s state election – politically and economically.Rob Manwaring, Senior Lecturer, Politics and Public Policy, Flinders UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/929282018-03-13T10:33:48Z2018-03-13T10:33:48ZFactCheck: does South Australia have the ‘highest energy prices’ in the nation and ‘the least reliable grid’?<blockquote>
<p>Look, this is probably the single most important issue to most households in South Australia — what they’ve been left with now are the highest energy prices in Australia — some say in the world — and the least reliable grid.</p>
<p>And it’s all because this government decided we had to go headlong into intermittent renewable energy without the baseload to support that transition.</p>
<p><strong>– SA Liberal Party leader Steven Marshall, speaking at the <a href="http://iview.abc.net.au/programs/sa-votes-leaders-debate/NS1806S001S00">SA Votes: Leaders’ Debate</a>, Adelaide, March 5, 2018</strong></p>
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<p>Electricity prices and the reliability of South Australia’s energy grid will be key issues for voters in this Saturday’s state election. </p>
<p>During a public leaders’ debate, SA Liberal Party leader Steven Marshall claimed that, under the Weatherill Labor government, South Australians had been left with “the highest energy prices in Australia – some say in the world – and the least reliable grid”.</p>
<p>Marshall said this was “all because this [Labor] government decided we had to go headlong into intermittent renewable energy without the baseload to support that transition”.</p>
<p>Let’s look at the evidence.</p>
<h2>Checking the source</h2>
<p>A spokesperson for Marshall told The Conversation that when the opposition leader said energy prices, he was referring to retail electricity prices.</p>
<p>To support Marshall’s statement, the spokesperson provided The Conversation with <a href="https://cdn.theconversation.com/static_files/files/45/ESOO_2017_AEMO20180326-22189-ni1kvl.PDF?1522072784">two</a> <a href="https://cdn.theconversation.com/static_files/files/46/SA_System_Strength_201720180326-22189-lnq050.pdf?1522072786">2017 documents</a> from the Australian Energy Market Operator, one 2015 document from the <a href="https://cdn.theconversation.com/static_files/files/47/AER_State_of_the_energy_market20180326-22189-3tnyfb.pdf?1522072788">Australian Energy Regulator</a>, <a href="https://cdn.theconversation.com/static_files/files/48/20170609-Electricity-1July2016SAElectricityPriceIncreases-AdviceToTreasu.._20180326-22189-16wvsmj.pdf?1522072790">a letter</a> from the Essential Services Commission of South Australia (ESCOSA) to the SA Minister for Energy Tom Koutsantonis, and a <a href="https://cdn.theconversation.com/static_files/files/49/highest_prices_AFR20180326-22189-lq1iyd.PDF?1522072792">2017 article</a> from the Australian Financial Review.</p>
<p>Regarding the reliability of South Australia’s grid, the spokesperson said the Australian Energy Market Operator’s <a href="https://cdn.theconversation.com/static_files/files/45/ESOO_2017_AEMO20180326-22189-ni1kvl.PDF?1522072784">Electricity Statement of Opportunities</a> shows that “in 2017-18 South Australia has the highest percentage of unserved energy at 0.0025%”, adding that “the reliability standard is 0.0020%”. </p>
<p>You can read the full response from Marshall’s office <a href="https://theconversation.com/full-response-from-steven-marshall-for-a-factcheck-on-electricity-prices-in-south-australia-93131">here</a>.</p>
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<h2>Verdict</h2>
<p>SA Liberal Party leader Steven Marshall said South Australia has “the highest energy prices in Australia — some say in the world”.</p>
<p>It’s true that South Australia has the highest retail electricity prices in Australia (although not in the world). </p>
<p>Marshall also said South Australia has the “the least reliable grid”. </p>
<p>In the energy industry, the word “reliability” means having enough energy generation capacity and inter-regional network capacity to supply customers.</p>
<p>The Australian Energy Market Operator is currently preparing estimates of unserved energy (the measure of reliability) for 2016-17. It is possible that there will be unserved energy for South Australia over this period.</p>
<p>However, it’s far from clear that South Australia would have had the highest level of unserved energy in the National Electricity Market.</p>
<p>People in South Australia do experience interruptions to their electricity supply. </p>
<p>But more than 97% of these are due to distribution outages (caused by things like trees falling on power lines) and are unrelated to the source of electricity – renewable or otherwise – flowing through the power lines.</p>
<p>There are many factors that affect electricity prices, grid reliability and power outages. Increasing levels of renewable energy generation is one factor. </p>
<p>Therefore, Marshall’s assertion that these outcomes are “all because this [Labor] government decided we had to go headlong into intermittent renewable energy without the baseload to support that transition” is incorrect.</p>
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<h2>Responding to the sources</h2>
<p>The sources provided by Marshall’s spokesperson are from reputable government agencies. However, it’s far from clear that the sources support the conclusions Marshall drew in the leaders’ debate. </p>
<p>For example, the spokesperson cited an Australian Energy Market Operator (AEMO) report stating that South Australia would breach the regulator’s reliability standard in 2017-18.</p>
<p>But this is a projection, and doesn’t include some measures that have already been taken to ensure that the grid is reliable in 2017-18. </p>
<p>You can read more analysis of the sources provided by Marshall’s office <a href="https://theconversation.com/full-response-from-a-spokesperson-for-steven-marshall-for-a-factcheck-on-electricity-issues-in-south-australia-93131">here</a>.</p>
<h2>‘Energy’ vs ‘electricity’ prices</h2>
<p>In making his statement, Marshall referred to “energy” prices. Energy and electricity prices are different things. Marshall’s spokesperson later told The Conversation that the MP was referring to “household electricity prices”.</p>
<p>Energy is a broad term that includes sources such as petrol, diesel, gas and renewables, among other things. Electricity is a specific form of energy that can be produced from many different sources.</p>
<p>The retail electricity price is what you’ll typically see in your home electricity bill, and is usually expressed in cents per kilowatt-hour (c/kWh). </p>
<h2>Does South Australia have the highest retail electricity prices in the nation?</h2>
<p>According the Australian Energy Market <a href="https://www.aemc.gov.au/markets-reviews-advice/2017-residential-electricity-price-trends">2017 Residential Electricity Price Trends</a> report, South Australia does indeed have the highest retail prices in the nation. Current prices for the typical SA customer are 37.79c/kWh.</p>
<p>According to that report, the Australian Capital Territory has the lowest retail electricity prices in Australia, at around 23.68 c/kWh.</p>
<p>The retail electricity price includes the wholesale price of the electricity, the network costs (or the “poles and wires” that bring the electricity to your home), retailing costs, and levies related to “green schemes” (such as the renewable energy target or solar feed-in tariffs). </p>
<p>The chart below shows how the different components contributed the electricity price increase in South Australia between 2007-08 and 2015-16.</p>
<iframe src="https://datawrapper.dwcdn.net/NujQW/5/" scrolling="no" frameborder="0" allowtransparency="true" width="100%" height="450"></iframe>
<p>For many years the drivers for retail prices have been network costs – which have very little to do with renewables.</p>
<p>But over the past 18 months, there has also been a increase in <em>wholesale</em> electricity prices across the entire National Electricity Market. A range of factors have contributed to this. These include the increase in gas prices, and the tightening of the supply-demand balance.</p>
<p>The closures of South Australia’s <a href="https://en.wikipedia.org/wiki/Northern_Power_Station_(South_Australia)">Northern Power Station</a> in 2016 and Victoria’s <a href="https://en.wikipedia.org/wiki/Hazelwood_Power_Station">Hazelwood Power Station</a> have contributed to a reduction in electricity supply (capacity).</p>
<p>The ACCC is also <a href="https://www.accc.gov.au/system/files/Retail%20Electricity%20Inquiry%20-%20Preliminary%20report%20-%2013%20November%202017.pdf">investigating</a> “transfer pricing” – which is when a business that’s an energy generator as well as a retailer shifts costs from one part of its business to another. </p>
<p>But as I’ll explain below, even if wholesale prices become the main driver of retail prices, it’s not accurate to place the blame squarely on renewables.</p>
<h2>Does South Australia have the highest retail electricity prices in the world?</h2>
<p>Because of differences in tax structures and energy systems, it’s no simple matter to compare energy and electricity prices between countries. </p>
<p>A 2017 Australian Competition and Consumer Commission report <a href="https://www.accc.gov.au/system/files/Retail%20Electricity%20Inquiry%20-%20Preliminary%20report%20-%2013%20November%202017.pdf">compared retail electricity prices</a> among countries in the Organisation for Economic Co-operation and Development (OECD).</p>
<p>Australian prices were in the lower end of the range, but above the OECD total. While SA prices are above the Australian national average, they would still not be the most expensive in the OECD on a <a href="https://theconversation.com/factcheck-are-australians-paying-twice-as-much-for-electricity-as-americans-69980">purchasing power parity</a> basis. </p>
<h2>Does South Australia have the ‘least reliable grid’?</h2>
<p>In the context of energy supply, the word “reliable” will mean different things to different people. </p>
<p>The Australian Energy Market Commission defines “reliability” as having sufficient generation, demand side response, and interconnector capacity in the system to generate and transport electricity to meet consumer demand.</p>
<p>Under this definition, the National Energy Market meets a <a href="https://www.aemc.gov.au/markets-reviews-advice/reliability-standard-and-settings-review-2018">reliability standard</a> as long as the maximum expected amount of “unserved energy” in any region doesn’t exceed 0.002% of the region’s annual energy consumption.</p>
<p>“Unserved energy” means the amount of customer demand that can’t be supplied within a region of the National Electricity Market, <em>specifically</em> due to a shortage of generation or interconnector capacity.</p>
<p>Marshall’s office did refer The Conversation to the AEMO’s <a href="https://cdn.theconversation.com/static_files/files/45/ESOO_2017_AEMO20180326-22189-ni1kvl.PDF?1522072784">Electricity Statement of Opportunities</a>, which predicts South Australia’s unserved energy over 2017-18 at 0.0025%, just above the reliability standard.</p>
<p>However, and crucially, these projections do not include the new state-owned diesel generators (which can provide up to 276 megawatts) <a href="https://theconversation.com/full-response-from-steven-marshall-for-a-factcheck-on-electricity-prices-in-south-australia-93131">among other things</a>. And these projections are made in order for the market to respond, and prevent the shortfall from occurring.</p>
<p>Between 2010-11 and 2015-16, the amount of unserved energy in the National Electricity Market was zero. </p>
<p>AEMO is currently preparing estimates of unserved energy for 2016-17. It is possible that there will be unserved energy for South Australia over this period.</p>
<p>However, it’s far from clear that South Australia would have had the highest level of unserved energy.</p>
<p>In fact, AEMO directed more <a href="https://www.aemo.com.au/media/Files/About%20the%20industry/Fact%20sheets/AEMO_FactSheet_LoadShedding_2015.pdf">load-shedding</a> in New South Wales than South Australia on proportional basis. If this load-shedding were to be considered unserved energy, then New South Wales may technically have been less reliable.</p>
<h2>Then why has South Australia had so many blackouts?</h2>
<p>The technical definition above might not be of much comfort to South Australians experiencing power outages.</p>
<p>The average South Australian experienced <a href="https://www.aer.gov.au/networks-pipelines/network-performance/sa-power-networks-network-information-rin-responses">970 cumulative minutes of blackout in 2016-17</a>. This was extraordinarily high due to the statewide blackouts in September 2016 caused by extreme weather. In 2015-16, the average total was <a href="https://www.aer.gov.au/networks-pipelines/network-performance/sa-power-networks-network-information-rin-responses">173 minutes</a>. </p>
<p>But across the National Electricity Market the vast majority of these – over 97% – are due to distribution outages, which can be caused by anything from trees falling on power lines to “<a href="https://www.sapowernetworks.com.au/centric/customers/power_outages_information/high_voltage_interruptions_and_causes.jsp">possum flashovers</a>”. These occur regardless of the source of electricity flowing through the power lines.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/209478/original/file-20180308-146675-yz0t0t.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/209478/original/file-20180308-146675-yz0t0t.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=369&fit=crop&dpr=1 600w, https://images.theconversation.com/files/209478/original/file-20180308-146675-yz0t0t.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=369&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/209478/original/file-20180308-146675-yz0t0t.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=369&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/209478/original/file-20180308-146675-yz0t0t.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=464&fit=crop&dpr=1 754w, https://images.theconversation.com/files/209478/original/file-20180308-146675-yz0t0t.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=464&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/209478/original/file-20180308-146675-yz0t0t.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=464&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Sources of supply interruptions in the NEM: 2007-08 to 2015-16.</span>
<span class="attribution"><span class="source">AEMC 2017, Reliability Frameworks Review, Interim Report (page 54)</span></span>
</figcaption>
</figure>
<p>South Australia may have the highest number of supply interruptions, but this is essentially unrelated to electricity supply mix. </p>
<h2>Is this ‘all because’ of state Labor policy?</h2>
<p>No. Even if wholesale prices become the main driver of retail prices, it’s not accurate to place the blame squarely on renewables. </p>
<p>Increased renewable energy generation may have contributed to decisions for some power plants to close. But so would other factors – such the <a href="http://www.abc.net.au/news/2016-12-01/worksafe-notices-detail-extent-of-repairs-needed-at-hazelwood/8082318">A$400 million safety upgrade</a> required for the Hazelwood power plant to have stayed open.</p>
<p>As mentioned above, other factors such as gas prices and competition issues have also contributed to increases in wholesale electricity prices. And as shown below, these are not confined to South Australia.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/210029/original/file-20180313-30979-jg4ezc.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/210029/original/file-20180313-30979-jg4ezc.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=377&fit=crop&dpr=1 600w, https://images.theconversation.com/files/210029/original/file-20180313-30979-jg4ezc.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=377&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/210029/original/file-20180313-30979-jg4ezc.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=377&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/210029/original/file-20180313-30979-jg4ezc.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=473&fit=crop&dpr=1 754w, https://images.theconversation.com/files/210029/original/file-20180313-30979-jg4ezc.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=473&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/210029/original/file-20180313-30979-jg4ezc.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=473&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Electricity futures prices for 2017–18.</span>
<span class="attribution"><span class="source">ACCC 2017, Retail Electricity Pricing
Inquiry, Preliminary report (page 56)</span></span>
</figcaption>
</figure>
<p>Gas prices are particularly important in the South Australian context, which is the most gas-dependent region in the National Electricity Market. </p>
<p>In addition, the SA market is the <a href="https://www.aer.gov.au/publications/state-of-the-energy-market-reports/state-of-the-energy-market-may-2017">most concentrated in terms of competition</a>.</p>
<p>In this sense, Marshall was not correct to say that price increases are “all because this [Labor] government decided we had to go headlong into intermittent renewable energy without the baseload to support that transition”. </p>
<p>Indeed, a large proportion of the existing renewable investment in South Australia has been financed as a result of the federal Renewable Energy Target, introduced by the Howard government, rather than state policy. <strong>– Dylan McConnell</strong></p>
<h2>Blind review</h2>
<p>I broadly agree with the verdict.</p>
<p>The price question is not contentious. South Australia has the highest retail electricity prices in Australia – but not in the world.</p>
<p>An argument could be made for South Australia being the least reliable system in the National Energy Market – if you look beyond the technical definition. A series of power losses and near misses in 2016-17 clearly raise questions for SA residents.</p>
<p>But, as the author rightly points out, the vast majority of these were caused by storms and other technical issues – not by renewables. <strong>– David Blowers</strong></p>
<hr>
<p><strong>The Conversation is fact-checking the South Australian election. If you see a ‘fact’ you’d like checked, let us know by sending a note via <a href="mailto:checkit@theconversation.edu.au">email</a>, <a href="http://www.twitter.com/conversationEDU">Twitter</a> or <a href="http://www.facebook.com/conversationEDU">Facebook</a>.</strong></p>
<p><strong>The Conversation thanks <a href="https://theconversation.com/the-conversation-is-fact-checking-the-south-australian-election-and-we-want-to-hear-from-you-92809">The University of South Australia</a> for its support.</strong></p>
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<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/162128/original/image-20170323-13486-72k52f.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/162128/original/image-20170323-13486-72k52f.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/162128/original/image-20170323-13486-72k52f.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/162128/original/image-20170323-13486-72k52f.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/162128/original/image-20170323-13486-72k52f.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/162128/original/image-20170323-13486-72k52f.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/162128/original/image-20170323-13486-72k52f.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/162128/original/image-20170323-13486-72k52f.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">The Conversation FactCheck is accredited by the International Fact-Checking Network.</span>
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<p><em>The Conversation’s FactCheck unit is the first fact-checking team in Australia and one of the first worldwide to be accredited by the International Fact-Checking Network, an alliance of fact-checkers hosted at the Poynter Institute in the US. <a href="https://theconversation.com/the-conversations-factcheck-granted-accreditation-by-international-fact-checking-network-at-poynter-74363">Read more here</a>.</em></p>
<p><em>Have you seen a “fact” worth checking? The Conversation’s FactCheck asks academic experts to test claims and see how true they are. We then ask a second academic to review an anonymous copy of the article. You can request a check at <a href="mailto:checkit@theconversation.edu.au">checkit@theconversation.edu.au</a>. Please include the statement you would like us to check, the date it was made, and a link if possible.</em></p><img src="https://counter.theconversation.com/content/92928/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Dylan McConnell has received funding from the AEMC's Consumer Advocacy Panel and Energy Consumers Australia.</span></em></p><p class="fine-print"><em><span>David Blowers does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>SA Liberal Party leader Steven Marshall said that state Labor policy had left South Australians with ‘the highest energy prices in Australia’ and ‘the least reliable grid’. Is that right?Dylan McConnell, Researcher at the Australian German Climate and Energy College, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/931282018-03-09T02:36:07Z2018-03-09T02:36:07ZVIDEO: Michelle Grattan on the battlegrounds of South Australia, Batman and Adani<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/Dlwiw0bVqB0?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
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<p>Michelle Grattan speaks with Deep Saini about the week in Australian politics. They discuss the mood in South Australia ahead of the state election, the battle in the Batman byelection, and criticism of Bill Shorten’s position on the Adani mine.</p><img src="https://counter.theconversation.com/content/93128/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Michelle Grattan speaks with Deep Saini about the week in Australian politics.Michelle Grattan, Professorial Fellow, University of CanberraPaddy Nixon, Vice-Chancellor and President, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/930232018-03-07T10:52:50Z2018-03-07T10:52:50ZPolitics podcast: the ‘X factor’ in the South Australian election<p>The South Australian election will be held on March 17 – the same day as the federal byelection in Batman. </p>
<p>Labor is pitching for a fifth term in South Australia, with former senator Nick Xenophon’s SA-Best party injecting a high element of unpredictability into the result.</p>
<p>Jobs and power prices are at the front of voters’ minds, while the gambling industry is investing heavily to try to fend off the “X factor”.</p>
<p>The Conversation spent two days in Adelaide; we interviewed Dean Jaensch, emeritus professor in politics from Flinders University, Carol Johnson, politics professor at the University of Adelaide, Premier Jay Weatherill, Xenophon, and South Australian federal Liberal cabinet minister Christopher Pyne.</p><img src="https://counter.theconversation.com/content/93023/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Labor is pitching for a fifth term in South Australia.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/928032018-03-05T22:09:35Z2018-03-05T22:09:35ZXenophon’s SA-BEST slumps in a South Australian Newspoll, while Turnbull’s better PM lead narrows<figure><img src="https://images.theconversation.com/files/208858/original/file-20180305-65511-19ep8ib.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Although SA-BEST is averaging 27% in seats it is contesting, the major parties are less vulnerable to losing seats to SA-BEST than it may appear from primary votes. </span> <span class="attribution"><span class="source">AAP/David Mariuz</span></span></figcaption></figure><p>The South Australian election will be held on March 17. A <a href="https://theaustralianatnewscorpau.files.wordpress.com/2018/03/sa-newspoll.pdf">Newspoll</a>, conducted in the three days from February 27 to March 1 from a sample of 1,078, gave the Liberals 32% of the primary vote (up three since the October to December Newspoll), Labor 30% (up three), SA-BEST 21% (down 11), the Greens 7% (up one) and the Australian Conservatives 6%. No two-party figure was calculated.</p>
<p>About <a href="https://www.pollbludger.net/2018/03/03/newspoll-liberal-32-labor-30-sa-best-21-south-australia/">half of SA-BEST’s drop</a> is because it is contesting 36 of the 47 lower house seats, and Newspoll did not offer SA-BEST as an option in the seats it is not contesting. In the seats SA-BEST is contesting, it averaged 27%.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/with-feeney-gone-greens-sniff-a-chance-in-batman-and-has-xenophons-bubble-burst-in-south-australia-91059">With Feeney gone, Greens sniff a chance in Batman, and has Xenophon's bubble burst in South Australia?</a>
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<p>On the three-way better premier question, 29% supported Nick Xenophon (down 17), 28% incumbent Jay Weatherill (up six) and 24% Opposition Leader Steven Marshall (up five). Weatherill led Marshall 38-31 head-to-head (37-32 previously).</p>
<p>Although SA-BEST and Xenophon’s support has slumped, neither of the two major party leaders is at all popular. Weatherill’s net approval is -21, down two points, and Marshall’s net approval is -26, down three points.</p>
<p>The Liberals led Labor 42-38 on best party for the South Australian economy, and led Labor 37-36 on best to maintain the energy supply and keep power prices lower. SA-BEST voters favoured the Liberals 37-33 on the economy and Labor 35-27 on energy.</p>
<p>Although SA-BEST is averaging 27% in seats it is contesting, the major parties are less vulnerable to losing seats to SA-BEST than it may appear from primary votes. Most Greens will preference Labor higher than SA-BEST, and most Conservatives will preference the Liberals higher.</p>
<p>Labor’s biggest problem in South Australia is that it has been in government since 2002. Old governments cannot blame problems on their predecessors, and there is an “It’s Time” factor. </p>
<p>14-to-16-year-old Labor governments in Queensland, New South Wales and Tasmania were smashed between 2011 and 2014, so Labor in South Australia is doing well to be competitive. Picking fights with the unpopular federal Coalition government probably explains Labor’s competitiveness.</p>
<p>Only once in the four elections since 2002 South Australian Labor won has the party received a majority of the two party vote (in 2006). At the 2014 election, despite losing the two-party vote 53.0-47.0, Labor won 23 of the 47 seats, and formed government with an independent’s support.</p>
<p>Unlike other Australian electoral commissions, the South Australian commission is required to create electorally fair boundaries. The 2018 boundaries were drawn so that, based on the last election’s results, a party that won a majority of the two-party vote should win a majority of the seats, ignoring independents.</p>
<p>The result of this requirement is that boundaries have been changed to favour the Liberals. According to the <a href="http://www.abc.net.au/news/2018-02-09/2018-south-australian-election---post-redistributuion-margins/9416052">ABC’s Antony Green</a>, the new boundaries notionally give the Liberals 27 seats out of 47, to Labor’s 20. Including independents, the Liberals have 24 seats, Labor has 19 and independents four. Ignoring independents, Labor needs a 3.1-point uniform swing to gain four seats from the Liberals and a majority.</p>
<p>The <a href="http://www.abc.net.au/news/elections/sa-election-2018/guide/lc/">South Australian upper house</a> has 22 members, with half up for election every four years. Statewide proportional representation is used to elect the upper house, with a similar system to the Senate. The South Australian parliament abolished group voting tickets last year. </p>
<p>The new system has optional preferential voting above the line; a single “1” vote above the line will expire within the chosen party, and will not be passed on as preferences to another party. Voters can direct preferences to other parties by marking “2”, “3”, and so on, above the line.</p>
<p>With 11 members to be elected, a quota is one-twelfth of the vote, or 8.3%. Overall, the upper house has eight Liberals, eight Labor, two Greens, two Conservatives, one Dignity and one Advance SA (formerly SA-BEST). At this election, the members up for election are four Liberals, four Labor, one Green, one Conservative and one Dignity.</p>
<h2>Federal Newspoll: 53-47 to Labor</h2>
<p><a href="https://www.pollbludger.net/2018/03/04/newspoll-53-47-labor-12/">This week’s Newspoll</a>, conducted March 1-4 from a sample of 1,660, gave federal Labor a 53-47 lead, unchanged on last fortnight. Primary votes were 38% Labor (up one), 37% Coalition (up one), 9% Greens (down one) and 7% One Nation (down one).</p>
<p>This is Malcolm Turnbull’s 28th successive Newspoll loss, just two short of Tony Abbott. If Newspoll sticks to its schedule, Turnbull will hit his 30th loss in April, but parliament will not be sitting until the May budget.</p>
<p>Despite the argument about Bill Shorten and Labor’s stance on the Adani coal mine, Labor gained a point at the expense of the Greens on primary votes. However, the overall Labor/Greens primary is still stuck at 47%, where it has been since August.</p>
<p>Turnbull’s ratings appear to have suffered further from the Barnaby Joyce and Michaelia Cash controversies. 32% were satisfied with Turnbull (down two), and 57% were dissatified (up three), for a net approval of -25. Shorten’s net approval was down three points to -23. Turnbull’s lead as better PM narrowed from 40-33 to 37-35, his equal lowest better PM lead.</p>
<p>In the first Newspoll of the year, in early February, Turnbull was at a net -13 approval, Shorten at a net -18, and Turnbull led Shorten by an emphatic 45-31 as better PM. That Newspoll came after a controversy-free summer holiday period. Since then, Turnbull has lost 12 points of net approval, Shorten has lost five, and Turnbull’s better PM lead has narrowed from 14 points to two.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/turnbull-and-the-coalition-begin-the-year-on-a-positive-polling-note-but-its-still-all-about-the-economy-91215">Turnbull and the Coalition begin the year on a positive polling note – but it's still all about the economy</a>
</strong>
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</p>
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<h2>Essential 53-47 to Labor</h2>
<p>In <a href="http://www.essentialvision.com.au/wp-content/uploads/2018/02/Essential-Report_270218-1.pdf">last week’s Essential</a>, conducted February 22-25 from a sample of 1,028, Labor led by 53-47, a one-point gain for the Coalition. Primary votes were 35% Coalition (down one), 35% Labor (down two), 10% Greens (steady) and 8% One Nation (up two).</p>
<p>By 50-32, voters supported a ban on sex between ministers and their staff. Voters also supported a ban on politicians having extra-marital sex 44-36, and a ban on sex between managers and their staff in the workplace 48-35. However, voters were opposed to a ban on sex between workmates 55-22.</p>
<p>A total of 60% thought Barnaby Joyce should resign, with 26% saying he should remain in parliament, and 34% saying he should leave parliament. Only 19% thought he should remain deputy PM.</p>
<p>By 44-41, voters approved of the media reporting on politicians’ private affairs.</p>
<p>Only 23% thought Joyce’s sexual relationship with his staffer was a major concern. On the other hand, 60% thought alleged excessive use of travel entitlements a major concern, and 50% thought finding the staff member work in another minister’s office a major concern.</p>
<p>Essential asked whether four Indigenous-related issues, the republic and changing Australia Day were a high priority. Just 11% thought changing the date of Australia Day was a high priority, and 21% becoming a republic. All the Indigenous-related issues scored higher.</p>
<p>By 48-32, voters would support abolishing private health insurance subsidies, and using this money to include dental care within Medicare.</p><img src="https://counter.theconversation.com/content/92803/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Adrian Beaumont does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Nick Xenophon’s SA-Best slumps while Labor fights the ‘It’s time’ factor in the lead-up to the South Australian election.Adrian Beaumont, Honorary Associate, School of Mathematics and Statistics, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/918472018-02-16T03:22:07Z2018-02-16T03:22:07ZIt’s 20 years since privatisation lit the spark under South Australia’s livewire energy politics<figure><img src="https://images.theconversation.com/files/206718/original/file-20180216-131021-o4m3p6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Keeping the lights on has always been a stormy issue in South Australia.</span> <span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File%3ALightning_in_Adelaide%2C_South_Australia%2C_2014.jpg">Jon Westra/Wikimedia Commons</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p>February 17, 2018, marks the 20th anniversary of a momentous day in South Australian energy politics. The then premier, John Olsen, announced that, despite repeated promises during the previous year’s state election campaign, his Liberal government would be putting the Electricity Trust of South Australia (ETSA) up for sale. </p>
<p>ETSA had been <a href="http://www.adelaidenow.com.au/news/south-australia/bob-byrne-the-playford-years-when-adelaide-was-a-powerhouse/news-story/528ee40bf2a65374eb3ca34267263b62">created in 1946</a> when a previous Liberal premier, Sir Thomas Playford, <a href="https://indaily.com.au/opinion/2017/01/18/playfords-lessons-in-power-for-the-current-sa-govt/">nationalised the Adelaide Electric Supply Company</a> (yes, you read that right).</p>
<p>Even when Olsen made his announcement, privatisation was on the nose with voters, literally as well as metaphorically. The “<a href="https://www.icij.org/investigations/waterbarons/big-pong-down-under/">big pong</a>” – a smell of rotten gas that pervaded Adelaide for several months during 1997 – had been traced back to a lack of maintenance after the privatisation of water treatment works.</p>
<p>Despite the big pong having put privatisation in bad odour, Olsen ploughed on. Faced with the impending launch of the National Electricity Market, and with the 1993 <a href="https://www.australiancompetitionlaw.org/reports/1993hilmer.html">Hilmer Report</a> having recommended competition as a way to drive down prices (although we all know <a href="https://theconversation.com/why-the-free-market-hasnt-slashed-power-prices-and-what-to-do-about-it-74441">how that worked out</a>), SA was set to follow in neighbouring Victoria’s footsteps and embrace deregulation. </p>
<h2>From state bank to bankrupt state</h2>
<p>The story had begun, as so many stories seem to, with hubris on the part of the financial sector. The <a href="https://en.wikipedia.org/wiki/State_Bank_of_South_Australia">State Bank of South Australia</a> had, through reckless lending, got itself into a huge hole that ultimately led to the resignation of the Labor premier, John Bannon, in 1992 and a <a href="https://en.wikipedia.org/wiki/South_Australian_state_election,_1993">heavy election defeat for the government</a> the following year.</p>
<p>Despite the Liberals’ thumping win in 1993, voters swung back again and the 1997 contest was far tighter than it had any right to be. ETSA had already been broken up into separate retail, transmission and energy subsidiaries in preparation for its participation in the NEM, and Labor seized on rumours of ETSA’s privatisation, despite adamant denials by the Liberals. On Nine News, Olsen flatly stated: “We are not pursuing a privatisation course with ETSA.” </p>
<p>Olsen’s Liberals were returned to government only thanks to the support of two conservative independents and one extremely independent National.</p>
<p>After Olsen’s February 1998 announcement, there were power plays back and forth. The Liberals were now claiming that privatising electricity assets would wipe out the state’s enormous debt, creating “an additional A$2 million a day to spend on things like schools, hospitals and other infrastructure”. </p>
<p>Labor and other opponents were, to put it mildly, sceptical. A normally pro-privatisation economist, <a href="https://indaily.com.au/contributors/richard-blandy/">Richard Blandy</a>, pointed out: “Mr Lucas keeps on talking about saving on interest but he ignores the aspect of lost revenue… Interest payments are now so low it is much less interesting to pay off debt.”</p>
<p>Nick Xenophon – at the time a newly elected independent state MP – indicated that he would support a long-term lease, but only if there were a referendum. Eventually, in June 1999, two Labor MPs switched sides and the privatisation went ahead. The journalist Chris Kenny put it best when he wrote in the Sunday Mail at the time:</p>
<blockquote>
<p>Rumoured, denied, ruled-out, revealed, reviled, rejected, revamped, revived and ratified, John Olsen’s power privatisation deal has somehow, finally, sparked into life. Politics and economics in South Australia will not be the same. It is our millennial change – our circuit-breaker.</p>
</blockquote>
<p>There was collateral damage. A proposed interconnector with New South Wales – to supplement the existing cable to Victoria completed in 1990 – was canned because it would have added more competition to the SA market, hitting the value of assets the Liberals wanted to sell. Xenophon was scathing, <a href="http://www.abc.net.au/radionational/programs/backgroundbriefing/power-games---the-politics-of-electricity/3464756">accusing the government</a> of having a “blinkered view of just maximising the value of the assets rather than maximising the benefits to consumers”.</p>
<p>Over the past decade, South Australia has gone from zero (renewable energy) to hero (at least to environmentalists) for its staggering growth in wind generation, as well as its more recent trendsetting in solar and batteries. This is partly thanks to a Howard government decision: the Mandatory Renewable Energy Target (such are the ironies of history).</p>
<h2>Power still in play</h2>
<p>If – as the old adage goes – a week is a long time in politics, then two decades is several eternities. But remarkably, three players from this chapter of South Australia’s political life are still on the scene. </p>
<p>Rob Lucas was in 1997 the Liberal government’s treasurer, a post he might regain in next month’s state election. Nick Xenophon, who cautiously supported discussion of privatisation but then came out against it, is back in the running for state office after a decade in Canberra. And Tom Koutsantonis, currently SA treasurer, was by Kevin Foley’s side when they tried to stop those two Labor MPs from switching.</p>
<p>Since then, of course, there was also the notorious statewide blackout of September 2016 – an event that has had monumental political and economic consequences. Jay Weatherill’s Labor government, already a staunch backer of renewables, responded with a <a href="https://theconversation.com/south-australia-makes-a-fresh-power-play-in-its-bid-to-end-the-blackouts-74522">radical new plan for energy security</a> (including, famously, the <a href="https://theconversation.com/yes-sas-battery-is-a-massive-battery-but-it-can-do-much-more-besides-88480">world’s biggest battery</a>), while the Liberal opposition has presented voters with its own <a href="https://www.saliberal.org.au/liberal_energy_solution">energy policy</a>. </p>
<p>In the past few weeks we have seen yet more headline-grabbing announcements from Weatherill’s government, including a “virtual power plant” made up of people’s rooftop panels and energy storage, and more money for <a href="http://reneweconomy.com.au/future-is-storage-sa-govt-pumps-for-four-more-hydro-projects-41345/">pumped hydro</a>.</p>
<p>South Australian energy and climate campaigners are trying to hold all the politicians’ feet to the fire, <a href="http://reneweconomy.com.au/south-australia-should-aim-for-100-renewables-by-2025-not-50-34320/">calling on them to bring forward a 100% renewable target to 2025</a>.</p>
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Read more:
<a href="https://theconversation.com/a-year-since-the-sa-blackout-whos-winning-the-high-wattage-power-play-84416">A year since the SA blackout, who's winning the high-wattage power play?</a>
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<p>In September 2016, just before the blackout, the Adelaide Advertiser <a href="http://www.adelaidenow.com.au/news/south-australia/poll-finds-we-blame-etsa-sale-for-high-sa-power-prices/news-story/ddec625e5a8f091eec874c6ca8b1b88f">commissioned an opinion poll on electricity privatisation</a>. The front-page story relayed the “extraordinary finding”, to the palpable shock and disbelief of reporter Paul Starick, that 51% of those polled blamed Olsen’s sell-off for rising electricity prices. </p>
<p>The story added that “only 15% blamed Labor’s investment in renewable energy to replace coal, a significant factor in Port Augusta power station’s closure in May at the cost of more than 180 jobs”.</p>
<p>John Quiggin, an economist who fought in vain to keep ETSA in public hands, has <a href="https://theconversation.com/the-case-for-renationalising-australias-electricity-grid-73951">put the case for renationalising Australia’s electricity</a>. In the UK, Opposition Leader Jeremy Corbyn
has <a href="https://labourlist.org/2018/02/a-catapult-into-21st-century-public-ownership-corbyn-speech-on-new-economics/">proposed a similar move</a> as part of his policy platform.</p>
<p>But whatever happens, we can definitely say three things:</p>
<ul>
<li><p>This is not the issue on which the SA Liberals would have chosen to fight the coming election, for both state-based historical and federal-present reasons.</p></li>
<li><p>If Weatherill loses, opponents of renewables will label it a referendum on wind, solar and storage, regardless of voters’ actual opinions.</p></li>
<li><p>And two decades on, power policy is still just as much a red-hot political battleground as it was during South Australia’s millennial circuit-breaking moment.</p></li>
</ul><img src="https://counter.theconversation.com/content/91847/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Marc Hudson does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Two decades ago, the then SA premier, John Olsen, defied a campaign promise and announced plans to privatise the state’s electricity industry. It’s been a high-voltage issue ever since.Marc Hudson, PhD Candidate, Sustainable Consumption Institute, University of ManchesterLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/899702018-01-15T19:07:31Z2018-01-15T19:07:31ZClimate politics in 2018: another guide for the perplexed<p>As I <a href="https://theconversation.com/australian-climate-politics-in-2017-a-guide-for-the-perplexed-70526">predicted a year ago</a>, 2017 was another vicious and bloody-minded year in Australian climate politics. Yet the <a href="https://theconversation.com/a-year-since-the-sa-blackout-whos-winning-the-high-wattage-power-play-84416">political bickering</a> belied the fact that it was actually a <a href="https://www.theguardian.com/commentisfree/2017/dec/31/a-great-year-for-clean-energy-in-australia-ends-while-bad-news-for-coal-continues">great year for green energy</a>.</p>
<p>Nowhere was that more in evidence than in South Australia, which got its <a href="https://theconversation.com/yes-sas-battery-is-a-massive-battery-but-it-can-do-much-more-besides-88480">big battery</a> inside 100-day deadline, with the <a href="http://www.abc.net.au/news/2017-08-14/solar-thermal-power-plant-announcement-for-port-augusta/8804628">world’s biggest solar thermal plant</a> set to begin construction this year. Elsewhere, Prime Minister Malcolm Turnbull <a href="https://theconversation.com/turnbull-unveils-snowy-plan-for-pumped-hydro-costing-billions-74686">talked up the prospects</a> of the Snowy 2.0 hydro storage project.</p>
<p>Yet the politics remain as rancorous as ever. The federal government unveiled its <a href="https://en.wikipedia.org/wiki/National_Energy_Guarantee">National Energy Guarantee</a> in November, after Chief Scientist Alan Finkel’s Clean Energy Target proved too rich for some in the Coalition. Just before Christmas, the long-awaited <a href="http://www.environment.gov.au/climate-change/review-climate-change-policies">climate policy review</a> was released, and <a href="https://theconversation.com/turnbull-has-politicked-himself-into-irrelevance-on-energy-and-climate-in-2018-89368">immediately branded as weak</a>. </p>
<p>Both issues are unresolved, and are set to loom large on the landscape this year. But what else is on the horizon?</p>
<h2>Domestic bliss</h2>
<p>We should always expect the unexpected. But perhaps the most predictable “unexpected” event would be a heatwave, prompting one or more of our creaking coal-fired power stations to <a href="http://www.abc.net.au/news/2017-02-15/sa-power-aemo-report-into-rolling-blackouts-during-heatwave/8273836">have a meltdown</a>. Maybe the “<a href="http://www.afr.com/news/scott-morrison-mocks-sas-big-battery-as-like-the-big-banana-20170727-gxjqbz">Big Banana</a>” (as Elon Musk’s battery has been branded) will step in again, as it <a href="http://reneweconomy.com.au/speed-of-tesla-big-battery-leaves-rule-makers-struggling-to-catch-up-36135/">already has</a>.</p>
<p>If fossil fuel power stations fail again, expect to see the culture war heat up again, with coal’s defenders using ever more twisting logic to defend their dear dinosaur technology.</p>
<p>Barring the apocalypse, on March 17 South Australians will <a href="https://en.wikipedia.org/wiki/South_Australian_state_election,_2018">go to the polls</a>. Will Premier Jay Weatherill be returned to power, to continue his long-running stoush with federal energy minister Josh Frydenberg? Will heatwaves and power outages help or hinder him? At the moment, polls have <a href="https://indaily.com.au/news/politics/2017/12/19/xenophon-party-outpolls-labor-and-liberals/">former senator Nick Xenophon as putative premier</a>. My crystal ball is hazy on what this would mean for energy policy.</p>
<p>In April there will be a meeting of the <a href="http://www.coagenergycouncil.gov.au">COAG Energy Council</a> at which the NEG proposal will come under scrutiny. Expect it to be bloody. State governments have demanded more modelling, so they can compare the NEG to Finkel’s Clean Energy Target that Finkel suggested, and an emissions intensity scheme. </p>
<p>Current SA treasurer Tom Koutsantonis has <a href="https://www.governmentnews.com.au/2017/11/coag-energy-meeting-kicks-can-road/">raised several concerns</a> with the NEG, arguing that it doesn’t give a big enough boost to renewables, and would do nothing to break up the power of the big “gentailers”, who generate and sell electricity. </p>
<p>“To proceed, the NEG would require unanimous support at COAG, so this policy is either years away, or won’t happen at all,” Koutsantonis said. Expect a long-running pitched battle if Weatherill and Koutsantonis are still about, and perhaps even if they’re not.</p>
<h2>Funding issues</h2>
<p>In the May budget the Turnbull government is going to have to decide what to do about the <a href="http://www.environment.gov.au/climate-change/government/emissions-reduction-fund">Emissions Reduction Fund</a>, the centrepiece of former prime minister Tony Abbott’s <a href="https://theconversation.com/uk/topics/direct-action-plan-5063">Direct Action policy</a>, which replaced his predecessor Julia Gillard’s carbon price.</p>
<p>The fund, which lets companies bid for public money to implement emissions-reduction projects, started at A$2.55bn, and there is <a href="https://www.theguardian.com/australia-news/2017/dec/19/coalitions-climate-policy-review-reveals-it-will-loosen-pollution-safeguard">about A$260 million left</a>.</p>
<p>Connected to these decisions are questions over whether and how the fund’s “<a href="https://theconversation.com/australias-new-cap-on-emissions-is-a-trading-scheme-in-all-but-name-47035">safeguard mechanism</a>”, which is supposed to stop the system being gamed, will be modified. </p>
<p>Among the many criticisms levelled at the government’s <a href="http://www.environment.gov.au/system/files/resources/18690271-59ac-43c8-aee1-92d930141f54/files/2017-review-climate-change-policies.pdf">2017 climate policy review</a>, released with little fanfare the week before Christmas, was the proposal to make the already flexible mechanism <a href="https://theconversation.com/the-federal-climate-policy-review-a-recipe-for-business-as-usual-89372">even more flexible</a>, so as to “reduce the administrative and auditing costs” for businesses.</p>
<p>The government’s climate review also says that in 2018 it will start the process of developing a long-term emissions-reduction strategy, to be finalised by 2020. It has promised to “consult widely” with businesses, the community, states and territories, and other G20 nations. Time will tell exactly how wide this consultation turns out to be, although anything would be better than the Trump Adminstration’s <a href="https://envirodatagov.org/wp-content/uploads/2018/01/Part-3-Changing-the-Digital-Climate.pdf">systematic removal of the term “climate change” from federal websites</a>.</p>
<h2>Overseas business</h2>
<p>The climate review suggests that the Turnbull government will push for more international carbon trading. An unlikely alliance has formed against the idea, consisting of those who view carbon credits as buck-passing, as well as <a href="https://www.theguardian.com/australia-news/2017/dec/19/coalitions-climate-policy-review-reveals-it-will-loosen-pollution-safeguard">Tony Abbott</a>, who thinks Australian money “shouldn’t be going offshore into dodgy carbon farms in Equatorial Guinea and Kazakhstan”. </p>
<p>His stance has already been <a href="https://www.theguardian.com/australia-news/2018/jan/03/abbotts-stance-on-international-carbon-credits-makes-no-sense-business-says">branded as nonsensical</a> by the business lobby – who, it must be said, stand to benefit significantly from carbon trading.</p>
<p>On the diplomatic front, the United Nations will hold a “<a href="http://unfccc.int/items/10265.php">2018 Talanoa dialogue</a>” process, featuring a series of meetings in which major economies will come under pressure to upgrade their climate commitments to meet the Paris target.</p>
<p>As <a href="http://reneweconomy.com.au/australia-under-new-pressure-to-get-serious-about-climate-in-2018-61812/">Giles Parkinson notes</a>, Australia had probably thought that they could get away with no climate target upgrades until around 2025. </p>
<p>In October the Intergovernmental Panel on Climate Change will <a href="http://ipcc.ch/news_and_events/st_sr15_sod_leak.shtml">release a report</a> on the impacts of global warming of 1.5°C – the more ambitious of the Paris Agreement’s twin goals – and the emissions pathways we would need to follow to get there. Expect climate deniers to get their retaliation in first.</p>
<p>The next UNFCCC Conference of the Parties (number 24 in a never-ending series) will be held in December in Katowice, in <a href="http://www.climatechangenews.com/2017/06/01/un-climate-conference-2018-heads-heartland-polish-coal/">Poland’s coal heartland</a>.</p>
<h2>Others’ predictions and my own</h2>
<p>So, <a href="https://www.brainyquote.com/quotes/niels_bohr_130288">prediction is very difficult</a>, but most of us like to indulge. Reneweconomy asked Frydenberg, his opposite number Mark Butler, and the Greens’ climate spokesperson Adam Bandt <a href="http://reneweconomy.com.au/coalition-labor-greens-and-the-future-of-energy-in-2018-2018/">what they thought was coming up</a>.</p>
<p>Frydenberg talked up “innovative projects” like this summer’s <a href="https://www.aemo.com.au/Media-Centre/AEMO-and-ARENA-demand-response-trial-to-provide-200MW-of-emergency-reserves-for-extreme-peaks">demand response trial</a> and Snowy 2.0.</p>
<p>Butler gloomily forecasted more policy chaos and renewables-blaming, while Bandt was sunnier, predicting that 2018 will be “the year of energy storage” as the economics for commercial and household batteries begin to stack up.</p>
<p>Bandt also thinks the public debate will heat up as extreme weather hits, and the national security implications become (more) obvious.</p>
<p>Well, it will be fun to see whether the Minerals Council pulls its horns in under the <a href="https://www.theguardian.com/business/2017/dec/19/bhp-could-end-2m-membership-of-minerals-council-over-policy-differences">threat of BHP pulling out</a>. Early signs would <a href="https://www.theguardian.com/environment/2018/jan/11/minerals-council-of-australia-kicks-off-coal-power-campaign-despite-bhp-threat">suggest not</a>.</p>
<p>Will other mining companies defect? </p>
<p>Will battery storage get a <a href="http://reneweconomy.com.au/2018-when-battery-storage-gets-a-grip-on-the-grid-37990/">grip on the grid</a>? </p>
<p>Will Adani <a href="https://www.theguardian.com/environment/2017/dec/18/adani-scraps-2bn-deal-to-outsource-carmichael-coalmine-operation">pull the plug on Carmichael</a> under continuing pressure from campaigners?</p>
<p>Well, here are some safe predictions.</p>
<p>Donald Trump will continue <a href="https://theconversation.com/time-for-china-and-europe-to-lead-as-trump-dumps-the-paris-climate-deal-78709">being Donald Trump</a>. Liberal and National backbenchers will put pressure on Turnbull to do what John Howard did when George W. Bush was in the Oval Office – namely, get into the United States’ slipstream and take advantage of the lowered ambition.</p>
<p>There will be further <a href="https://theconversation.com/a-month-in-teslas-sa-battery-is-surpassing-expectations-89770">stunning developments</a> in energy storage, and the prices of solar and wind will <a href="https://theconversation.com/whats-the-net-cost-of-using-renewables-to-hit-australias-climate-target-nothing-88021">continue to plummet</a>.</p>
<p>Meanwhile, Australia’s emissions will <a href="http://www.abc.net.au/news/2017-12-19/greenhouse-gas-emissions-increase-third-consecutive-year/9271176">continue to rise</a>, as will the atmosphere’s <a href="https://scripps.ucsd.edu/programs/keelingcurve/">carbon dioxide concentrations</a>.</p><img src="https://counter.theconversation.com/content/89970/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Marc Hudson does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Last year was a vicious one for climate and energy politics. And with a South Australian election and various other federal decisions in the offing, 2018 looks like being similarly rancorous.Marc Hudson, PhD Candidate, Sustainable Consumption Institute, University of ManchesterLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/881662017-11-30T19:05:59Z2017-11-30T19:05:59ZNew Royal Commission into water theft may be just the tip of iceberg for the Murray Darling Basin<p>Last weekend South Australian Premier Jay Weatherill announced the establishment of a <a href="https://www.premier.sa.gov.au/index.php/jay-weatherill-news-releases/8354-south-australia-to-establish-royal-commission-into-river-murray-water-theft">Royal Commission</a> to investigate breaches of the <a href="https://www.mdba.gov.au/publications/policies-guidelines/basin-plan-implementation-agreement">Murray Darling Basin Agreement</a>. </p>
<p>This follows apparently <a href="http://www.adelaidenow.com.au/news/south-australia/mps-increase-attack-on-alleged-nsw-murray-darling-river-water-theft/news-story/1f18b1fcc6ae59ddea597ff13cdf9168">egregious behaviour</a> by some irrigators and state government regulators in New South Wales. Yet the alleged theft of water in the Murray-Darling Basin is only the tip of the iceberg when we consider the institutional problems – namely the capture of state government agencies by powerful irrigation interests. </p>
<p>Take NSW as an example. In 1993 the then state Department of Water Resources’ North west rivers audit found the same theft, meter-tampering and questionable government oversight exposed again by the ABC’s <a href="http://iview.abc.net.au/programs/four-corners/NC1704H024S00">Four Corners</a> investigation in July.</p>
<p>Only half of the <a href="https://www.mdba.gov.au/sites/default/files/pubs/Salt-of-the-earth-salinity-management-in-mdba.pdf">targeted volume of salt</a> has been flushed out to sea and the <a href="http://www.water.nsw.gov.au/water-management/water-availability/brokenhill">water supply to Broken Hill</a> and other communities has become unreliable. Moreover, floodplain forests and wetlands of international significance continue to decline, and <a href="http://www.abc.net.au/news/2017-06-05/murray-darling-basin-waterbirds-population-declining/8587720">native fish and water bird populations</a> have flatlined.</p>
<p>In fact, many values are at risk in the river system that supplies water to more than 3 million people, and covers a seventh of Australia’s landmass. It is not only a few (alleged) bad apples, it is governance of water that is broken.</p>
<h2>Problems with the existing plan</h2>
<p>While bad behaviour in NSW is evident, of more concern is the way some state governments are frustrating implementation of the A$13 billion <a href="https://www.mdba.gov.au/basin-plan">2012-26 Basin Plan</a> and associated programs to recover water for the river system. </p>
<p>If the Basin Plan is to improve the health of the river and its extensive floodplain forests along the lower River Murray, the water recovered for the environment needs to be released in pulses. That will be the best way to ensure it can rise out of the river channel and inundate wetlands. </p>
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Read more:
<a href="https://theconversation.com/is-the-murray-darling-basin-plan-broken-81613">Is the Murray-Darling Basin Plan broken?</a>
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<p>In this context it is unhelpful for the Victorian Government to propose flows of around half the previously agreed size because of the objections of a small number of landowners along the Goulburn River in its <a href="http://wentworthgroup.org/2017/11/submission-to-murray-darling-basin-authority-on-sdl-adjustment-draft-determination/2017/">Goulburn key focus area project</a>.</p>
<p>Upstream, state governments have rules that allow water purchased by taxpayers for the river to be extracted by irrigators when it crosses state borders. However, they are failing to remove bottlenecks that prevent managed floods from travelling safely down rivers. They have even proposed to reduce the water available for the environment below minimum requirements. </p>
<p>Astonishingly, 30% of water extraction points in the Basin are still not metered and the information that is collected is not publicly available or audited so that theft can be penalised.</p>
<h2>Sustainable management required</h2>
<p>Sustainable management of the Murray-Darling Basin requires trust and cooperation among the responsible state, ACT and federal governments. </p>
<p>The alleged water theft in NSW breaks that trust, especially for SA as the downstream state that relies on the River Murray. But so too does the stalling of implementation of the Basin Plan agreement and manipulation of the rules that govern who gets what water and when they get it. </p>
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Read more:
<a href="https://theconversation.com/tax-returns-for-water-satellite-audited-statements-can-save-the-murray-darling-81833">'Tax returns for water': satellite-audited statements can save the Murray-Darling</a>
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<p>The foundation of trust is transparency. As a start, there are many opportunities for online recording of water allocations and use to increase trust. It is still possible to fix implementation of the Plan. </p>
<p>In a <a href="http://wentworthgroup.org/2017/11/review-of-water-reform-in-the-murray-darling-basin/2017/">report released yesterday</a> the Wentworth Group of Concerned Scientists has identified several solutions, including metering all water diversions, completing water recovery, and investing in regional development. </p>
<p>The good news is that there are signs of political leadership. The Council of Australian Governments <a href="http://www.coag.gov.au/meeting-outcomes/coag-meeting-communique-9-june-2017">promised in June</a> to deliver the Basin Plan “in full and on time” for its planned commencement in 2019.</p>
<p>Recently, Prime Minister Malcolm Turnbull <a href="https://www.pm.gov.au/media/prime-minister-re-affirms-basin-plan-deal-and-commits-compliance-reform">recommitted the federal government</a> to Basin Plan implementation. He endorsed the far-reaching recommendations of the Murray-Darling Basin Authority’s <a href="https://www.mdba.gov.au/basin-plan-roll-out/basin-wide-compliance-review">Basin-wide Compliance Review</a> to strengthen enforcement of water laws and the Basin Plan, and to recover the remaining environmental water.</p>
<h2>The SA Royal Commission</h2>
<p>Beginning in 2018, Weatherill’s newly announced <a href="https://www.premier.sa.gov.au/index.php/jay-weatherill-news-releases/8354-south-australia-to-establish-royal-commission-into-river-murray-water-theft">Royal Commission</a> will investigate breaches of the Murray Darling Basin Agreement, and the Commissioner “will examine the adequacy of existing legislation and practices and make recommendations for any necessary changes.” </p>
<p>Most significantly, Weatherill has proposed going beyond water theft to “look into whether any legislative or policy changes since the agreement was signed in 2012 have been inconsistent with the purpose of the Basin Agreement and Basin Plan”.</p>
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Read more:
<a href="https://theconversation.com/we-need-more-than-just-extra-water-to-save-the-murray-darling-basin-80188">We need more than just extra water to save the Murray-Darling Basin</a>
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<p>The Royal Commission’s terms of reference are not yet available and the extent of cooperation of upstream governments is highly uncertain (NSW has already said it will not cooperate). Yet the Royal Commission could help identify ways to better meter and account for water, improve compliance and set rules to protect environmental water.</p>
<p>At the next <a href="https://www.mdba.gov.au/about-us/governance/ministerial-council">Basin Ministerial Council meeting</a> later this year the governments need to map out measures to put the Plan back on track. If it can do so, it will be endorsed at the Council of Australian Governments in 2018. This is their opportunity to articulate precisely how they will fulfil their commitment to delivering the basin plan in full and on time. </p>
<p>The Murray-Darling Basin Plan is not perfect. Implementation has problems, but with the remaining $5.1 billion allocated funds and proper leadership it can be well implemented to benefit both people and the environment.</p><img src="https://counter.theconversation.com/content/88166/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jamie Pittock is a member of the Wentworth Group of Concerned Scientists, a board member of the Alliance for Water Stewardship Asia Pacific, and a governor of WWF Australia.</span></em></p>SA Premier Jay Weatherill has announced a Royal Commission into breaches of the Murray Darling Basin agreement. But will it solve the long running problems with river management?Jamie Pittock, Director, International Programs, UNESCO Chair in Water Economics and Transboundary Water Governance, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/844162017-09-28T01:44:33Z2017-09-28T01:44:33ZA year since the SA blackout, who’s winning the high-wattage power play?<p>It’s a year to the day since the entire state of South Australia was <a href="https://theconversation.com/what-caused-south-australias-state-wide-blackout-66268">plunged into darkness</a>. And what a year it’s been, for energy policy geeks and political tragics alike. </p>
<p>Parked at the western end of the eastern states’ electricity grid, South Australia has long been an outlier, in energy policy as well as geography. Over the past decade it has had a tempestuous relationship with the federal government, be it Labor or Coalition. As with <a href="https://theconversation.com/is-the-murray-darling-basin-plan-broken-81613">water policy</a>, the South Australians often suspect they are being left high and dry by their upstream neighbours. </p>
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<a href="https://theconversation.com/south-australias-energy-plan-gives-national-regulators-another-headache-74541">South Australia's energy plan gives national regulators another headache</a>
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<p>The policy chaos over the carbon price left the <a href="https://theconversation.com/au/topics/renewable-energy-target-8912">Renewable Energy Target</a> as a far more prominent investment signal than it would otherwise have been. South Australia carried on attracting wind farms, which earned <a href="http://reneweconomy.com.au/how-gas-profited-from-s-a-market-dominance-and-blamed-renewables-75801">more than their fair share of the blame</a> for high electricity prices.</p>
<p>On September 28, 2016, a “<a href="http://www.smh.com.au/national/south-australia-blackout-once-in-50year-storm-lashes-state-20160928-grqpks.html">once-in-50-year storm</a>” blew over a string of electricity pylons, tripping the whole state’s power grid. While the blackout, which lasted 5 hours in Adelaide and longer elsewhere, was still unfolding, <a href="http://www.abc.net.au/7.30/content/2016/s4547620.htm">critics of renewables took a leap into the dark</a> as part of a wider <a href="https://marchudson.net/2016/09/29/blame-games-and-framing-battles-over-renewables-in-south-australia/">blame game</a>.</p>
<p>Despite being described as a “<a href="http://www.sciencedirect.com/science/article/pii/S2214629617301238?via%3Dihub">confected conflict</a>”, the skirmish was serious enough to prompt the federal government to commission Chief Scientist Alan Finkel’s <a href="http://www.environment.gov.au/energy/national-electricity-market-review">landmark review of the entire National Electricity Market</a>, with a deadline of mid-2017.</p>
<p>Meanwhile, in early December, federal environment minister Josh Frydenberg was <a href="https://www.theguardian.com/australia-news/2016/dec/06/josh-frydenberg-backtracks-on-emissions-trading-comments">forced to backtrack</a> after saying the Coalition was prepared to consider an emissions intensity scheme. SA Premier Jay Weatherill was unamused by the flip-flop and <a href="https://www.theguardian.com/australia-news/2016/dec/08/south-australia-says-states-could-go-it-alone-after-turnbull-rules-out-carbon-tax">threatened to get together with other states to go it alone on carbon pricing</a>. </p>
<p>February saw a <a href="http://www.abc.net.au/news/2017-02-15/sa-power-aemo-report-into-rolling-blackouts-during-heatwave/8273836">series of “load shedding” events</a> during a heatwave, which left some Adelaide homes once more without power and saw the grid wobble in NSW too. (It should be noted that the now infamous Liddell power station was unable to increase its output during the incident.)</p>
<h2>Policy by tweet</h2>
<p>It was then that Twitter entered the fray. The “accidental billionaire” <a href="https://en.wikipedia.org/wiki/Mike_Cannon-Brookes">Mike Cannon-Brookes</a> was asking Solar City chief executive Lyndon Rive how quickly a battery storage system might be up and running. Rive’s cousin, a certain <a href="https://en.wikipedia.org/wiki/Elon_Musk">Elon Musk</a>, intervened with his famous offer: </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"840032197637685249"}"></div></p>
<p>Within days, both Weatherill and Turnbull had had conversations with Musk, and Turnbull announced <a href="https://www.theguardian.com/australia-news/2017/mar/16/turnbull-2bn-snowy-hydro-electric-expansion">a “Snowy Hydro 2.0” storage proposal</a>. </p>
<p>Meanwhile, Weatherill unveiled his <a href="http://ourenergyplan.sa.gov.au/">SA Energy Plan</a>, which the Guardian called a “<a href="https://www.theguardian.com/australia-news/2017/mar/14/jay-weatherills-big-energy-call-is-a-survivalist-fix-of-last-resort">survivalist fix of last resort</a>”. We now know that the plan <a href="http://www.adelaidenow.com.au/news/south-australia/frontier-economics-led-by-power-expert-danny-price-paid-over-1m-to-advise-on-premiers-energy-plan/news-story/ff3cb71281fe9c238384a929f3d71d67">cost A$1 million to produce</a>.</p>
<p>Then, on March 16, at the launch of a <a href="http://reneweconomy.com.au/agl-goes-live-with-virtual-power-plant-linking-household-battery-storage-16810/">5-megawatt “virtual power plant”</a> in Adelaide, Weatherill had some choice words for Frydenberg who, entertainingly enough, was standing right next to him: </p>
<blockquote>
<p>I’ve got to say, it is a little galling to be standing here, next to a man that’s been standing up with his prime minister, bagging South Australia at every step of the way over the last six months… And for you to then turn around, in a few short months, when there’s a blackout, and point the finger at SA for the fact that our leadership in renewable energy was the cause of that problem is an absolute disgrace.“</p>
</blockquote>
<p>Frydenberg kept a notably low profile for a while after this.</p>
<h2>Finkel fires up</h2>
<p>In June, Finkel <a href="https://www.theguardian.com/australia-news/2017/jun/21/chief-scientist-defends-electricity-market-review-against-claims-of-political-motivation">released his keenly awaited review</a>. A significant number of <a href="https://www.crikey.com.au/2017/06/16/who-are-the-liberal-mps-worried-about-malcolm-turnbulls-clean-energy-target/">Liberals</a> and <a href="https://www.theguardian.com/australia-news/2017/jul/13/barnaby-joyce-ill-support-a-clean-energy-target-if-coal-is-included">Nationals</a> didn’t like his suggested Clean Energy Target, and immediately set about trying to insert coal into it.</p>
<p>Despite being conceived as an acceptable compromise, the Clean Energy Target was bashed from both sides. It was criticised as <a href="https://www.theguardian.com/australia-news/2017/aug/30/finkel-clean-energy-target-too-weak-for-paris-climate-goal-analysis-shows">too weak to reach Australia’s emissions target</a> and <a href="http://reneweconomy.com.au/finkels-clean-energy-target-little-more-than-states-business-as-usual-82074">little more than "business as usual”</a>, but was also “<a href="https://www.theguardian.com/australia-news/2017/sep/20/a-clean-energy-target-is-not-unconscionable-tony-abbott-wrecking-climate-policy-is">unconscionable</a>” to former Prime Minister Tony Abbott.</p>
<p>Weatherill’s next major stand-alongside was an even bigger deal than the Frydenberg stoush. On July 7, he and Musk announced that part of his earlier energy SA plan would become reality: <a href="https://www.theguardian.com/australia-news/2017/jul/07/tesla-to-build-worlds-biggest-lithium-ion-battery-in-south-australia">a 129-megawatt-hour lithium-ion battery farm</a>, to be built alongside a wind farm in Jamestown.</p>
<p>Speaking at a book launch, Weatherill <a href="http://reneweconomy.com.au/weatherill-lets-fly-at-right-wing-attack-against-renewables-46736/">used the f-word to describe specific media opponents of renewables</a>, earning himself opprobrium in the pages of The Australian, and admiration in more progressive areas of social media.</p>
<p>Federal treasurer Scott Morrison <a href="http://www.sbs.com.au/news/article/2017/07/27/sas-big-battery-just-another-big-thing">returned fire</a>, deriding the battery farm as “a <a href="https://theconversation.com/australias-big-problem-what-to-do-with-our-ageing-super-sized-statues-83424">Big Banana</a>”.</p>
<p>However, there was another big announcement in Weatherill’s locker: a <a href="http://reneweconomy.com.au/aurora-what-you-should-know-about-port-augustas-solar-power-tower-86715/">A$650-million concentrated solar thermal power plant</a> to be built near Port Augusta, with potential for more.</p>
<p>Quietly, the “energy security target” component of the SA plan, which had been <a href="http://reneweconomy.com.au/sas-energy-policy-five-steps-forward-two-steps-back-25987/">rubbished</a>, was <a href="http://reneweconomy.com.au/s-a-puts-energy-security-target-on-back-burner-after-aemo-steps-in-86049">deferred</a>, while a renewables-based “<a href="http://reneweconomy.com.au/30mw-battery-to-create-renewables-based-mini-grid-in-south-australia-63304">minigrid</a>” on the Yorke peninsula was announced. </p>
<h2>Whatever next?</h2>
<p>What will happen now? “Events, dear boy, events,” as Harold MacMillan <a href="http://www.telegraph.co.uk/comment/personal-view/3577416/As-Macmillan-never-said-thats-enough-quotations.html">didn’t say</a>. Musk is back in Adelaide <a href="http://www.abc.net.au/news/2017-07-21/elon-musk-plans-adelaide-return-to-detail-revised-mars-mission/8732562">to talk about his Mars mission</a>, with an appearance <a href="http://reneweconomy.com.au/tesla-plans-big-battery-party-still-waiting-on-victoria-tender-56468/">scheduled for Jamestown</a>. Would anyone bet against another SA government announcement? More batteries? Electric cars? Space planes…?</p>
<p>The Jamestown battery should come online in December (or it’s free!). Weatherill will presumably be hoping that Turnbull’s government staggers on, bleeding credibility and beefing up the anti-Liberal protest vote until the <a href="https://en.wikipedia.org/wiki/South_Australian_state_election,_2018">March 2018 state election</a>, and that they continue to make themselves look a like a rabble over Finkel’s Clean Energy Target. </p>
<p>At the same time, he will also fervently hope there isn’t another big power crisis, and that the <a href="http://www.abc.net.au/news/2017-07-24/sa-energy-plan-advertising-spend-waste-of-money-opposition-says/8738846">A$2.6 million of public money he spent making sure everyone knows about his energy plans</a> provides effective insulation from any shocks.</p>
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<a href="https://theconversation.com/explainer-what-can-teslas-giant-south-australian-battery-achieve-80738">Explainer: what can Tesla's giant South Australian battery achieve?</a>
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<p>The whole saga shows how policy windows can open up in unexpected ways. An attempt to blast a new technology fails, and a politician at state level sees no option but to act because of federal inadequacy. It’s happening in <a href="http://mashable.com/2017/06/06/governor-brown-china-climate-change/#6vkbDvPWrsqU">California too</a>.</p>
<p>Judging by his interviews with <a href="http://reneweconomy.com.au/jay-weatherill-on-hydrogen-load-shedding-community-activism-and-his-critics-60337/">me</a> and the Guardian’s <a href="https://www.theguardian.com/australia-news/2017/aug/22/jay-weatherill-renews-warning-labor-states-could-go-it-alone-on-energy-policy">Katharine Murphy</a>, Weatherill has found his signature issue – making lemonade from the huge lemon he was served last September. As another <a href="https://indaily.com.au/opinion/2017/08/17/richardson-bad-news-good-labor/">commentator wrote</a>: </p>
<blockquote>
<p>Far from being the last nail in the Weatherill government’s electoral coffin, the power crisis has perversely breathed new life into Labor’s re-election hopes… It is turning its own failures on energy security into a single-issue platform on which to campaign.</p>
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<p>Weatherill is trying to build an <a href="https://hbr.org/2012/12/how-to-create-an-innovation-ec">innovation ecosystem</a> for clean energy technology. Announcing a tender last month, <a href="http://reneweconomy.com.au/s-calls-tender-next-generation-renewables-storage-23440/">Weatherill said</a> his government is “looking for the next generation of renewable technologies and demand-management technologies to maintain our global leadership”.</p>
<p>And when do applications for that tender close? Well, it may be a coincidence, but the <a href="https://service.sa.gov.au/cdn/ourenergyplan/assets/call-for-proposals-bulk-energy-storage-4-sept-2017.pdf">deadline is 5pm today</a> – exactly a year since his state’s darkest hour.</p><img src="https://counter.theconversation.com/content/84416/count.gif" alt="The Conversation" width="1" height="1" />
What a year it’s been for fans of energy politics. And 12 months after the blackout, the policy heat is still being generated.Marc Hudson, PhD Candidate, Sustainable Consumption Institute, University of ManchesterLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/824522017-08-17T02:38:44Z2017-08-17T02:38:44ZOf renewables, Robocops and risky business<figure><img src="https://images.theconversation.com/files/182350/original/file-20170817-27872-jzrxxh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">What a gas: one of Moreland's new hydrogen-powered garbage trucks.</span> <span class="attribution"><span class="source">Takver/Flickr.com</span>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p>A while ago I asked <a href="https://theconversation.com/what-types-of-people-will-lead-our-great-energy-transition-75909">what types of people will lead our great energy transition</a>.</p>
<p>Well, some of them seem to be living in North Melbourne. Earlier this month I watched as Victoria’s Climate Change Minister Lily D’Ambrosio announced <a href="http://www.premier.vic.gov.au/building-australias-first-hydrogen-refuelling-station/">A$1 million for a hydrogen refuelling station</a> to power zero-emission local government vehicles. The money, from the <a href="http://www.business.vic.gov.au/support-for-your-business/future-industries/new-energy-technologies">New Energy Jobs Fund</a>, will sit alongside A$1.5 million that <a href="http://www.moreland.vic.gov.au">Moreland Council</a> is investing over three years. </p>
<p>The Council hopes that rainwater it harvests from its buildings can be turned into fuel, with the help of power from its solar panels and wind turbines, which can in turn be used to run its fleet of garbage trucks. If (and it is an if) everything works, then residents get less air and noise pollution, and the council gets a smaller energy bill and carbon footprint. You can read my account of the launch <a href="http://reneweconomy.com.au/moreland-council-launches-hydrogen-powered-garbage-truck-scheme-35203/">here</a>. </p>
<p>Of course, there are doubters. One commenter under my report wrote:</p>
<blockquote>
<p>It amazes me how anybody could still think [hydrogen fuel cells] are a step in the right direction for domestic land transportation. Their inherent lack of efficiency compared to batteries, difficulty with storage, explosion risk and the cost of building the support infrastructure has been demonstrated innumerable times.</p>
</blockquote>
<p>Yet Japan is <a href="http://www.enecho.meti.go.jp/en/category/whitepaper/">planning for 800,000 hydrogen-fuelled vehicles by 2030</a>. Are all of these governments really backing the wrong horse?</p>
<p>This is the nub of the problem: technological outcomes generally become clear after the fact, and rarely before. After a “<a href="https://en.wikipedia.org/wiki/Dominant_design">dominant design</a>” has survived the battles then hindsight, via historians, tells us it was obvious all along which type of gizmo was going to win.</p>
<p>Scholars have long pointed out that this is a fallacy – starting with the <a href="https://mitpress.mit.edu/books/social-construction-technological-systems-0">humble bicycle</a>. The truth is that technological innovation is not the clean predictable process that pristine white lab coats and gleaming laboratories would have us think. </p>
<p>The history of technology is littered with the carcasses of superior ideas that were killed by inferior marketing (<a href="https://en.wikipedia.org/wiki/Betamax">Betamax</a> tapes, anyone?). Meanwhile there are the success stories that only happened through serendipity – such as <a href="https://en.wikipedia.org/wiki/Sildenafil#History">Viagra</a>, <a href="https://en.wikipedia.org/wiki/Text_messaging#History">text messages</a>, and <a href="https://en.wikipedia.org/wiki/Post-it_note#History">Post-it notes</a>. Sometimes technologies simply don’t catch the public eye, and their proponents withdraw them and repurpose them (hello <a href="http://nymag.com/selectall/2017/07/the-rebirth-of-google-glass-on-the-factory-floor.html">Google Glass</a>).</p>
<p>Even the most successful technologies have teething problems. Testing prototypes is not for the faint-hearted (as anyone who’s seen <a href="https://www.youtube.com/watch?v=hZZhhA87d6g">Robocop</a> will vividly remember).</p>
<p>If there’s no clear and obvious technological route to follow, then an industry can end up “<a href="http://www.dictionary.com/browse/perseverate">perseverating</a>” – repeating the same thing insistently and redundantly. As these <a href="http://www.sciencedirect.com/science/article/pii/S0048733314002091">two</a> <a href="https://www.nature.com/articles/nenergy201613">studies</a> show, the American car industry couldn’t decide what should replace the internal combustion engine, and so hedged their bets by flitting between various flavours of the month, from biofuels to LPG to hybrids and everything in between.</p>
<h2>Risky business</h2>
<p>This is what makes Moreland Council’s choices so interesting. It might make “more sense” to wait and see, to let someone else run all the risks, and then be a fast follower, with the <a href="https://www.businessinsider.com.au/youre-better-off-being-a-fast-follower-than-an-originator-2010-10?r=US&IR=T">advantages and disadvantages</a> that entails. But of course if everyone does that, then nothing ever gets done. </p>
<p>Meanwhile, if civil society is pushing for change, and a council’s own political makeup shifts (the Greens did well in the last local elections), and there are determined officers, then an experiment can be conducted. Coincidentally enough, Moreland Council’s chief exective Nerina Di Lorenzo recently completed a PhD on local governments’ attitudes to risk. Within a year or three she’ll no doubt have enough material for a post-doc.</p>
<p>Meanwhile, South Australian Premier Jay Weatherill seems to have lost all hope that the black hole-sized vacuum in federal energy and climate policy will ever be fixed. He has famously commissioned the world’s biggest <a href="http://www.abc.net.au/news/2017-07-07/sa-to-get-worlds-biggest-lithium-ion-battery/8687268">lithium battery</a> and, now, a <a href="https://theconversation.com/how-south-australia-can-function-reliably-while-moving-to-100-renewable-power-73199">long-awaited</a> concentrated solar thermal power plant <a href="https://twitter.com/JayWeatherill/status/896965896610095104/photo/1">in Port Augusta</a>.</p>
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<h2>Learning process</h2>
<p>What we are seeing in Moreland is a local council and its state government acting together (what academics snappily call “<a href="https://en.wikipedia.org/wiki/Multi-level_governance">multilevel governance</a>”), while further west we have another state government that has resolved to push its chips onto the green baize and spin the roulette wheel.</p>
<p>Will these experiments work? Will the right lessons be learned, from either failure or success (or more likely, living as we do in the real world, a mixture of both)? How can the “successful” technologies (however that is defined) be scaled up at tremendous speed, so we somehow clamber up the learning curve faster than we slither up the <a href="https://scripps.ucsd.edu/programs/keelingcurve/">Keeling Curve</a> of atmospheric carbon dioxide levels?</p>
<p>Can it be done? We need industrial quantities of luck, and optimism. And seriously – what do we have to lose by trying, other than the love of some vested interests?</p><img src="https://counter.theconversation.com/content/82452/count.gif" alt="The Conversation" width="1" height="1" />
A local council goes for hydrogen. A state government goes for lithium and mirrors. They are taking punts on technology. What are the risks?Marc Hudson, PhD Candidate, Sustainable Consumption Institute, University of ManchesterLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/746962017-03-16T12:16:10Z2017-03-16T12:16:10ZGrattan on Friday: Turnbull turns to water as power debate fires up<p>Malcolm Turnbull had the media troop to Talbingo in the Snowy Mountains for Thursday’s big Hydro announcement. But then his press conference couldn’t be beamed direct because there was no way of transmitting the signal.</p>
<p>Meanwhile, the news cycle was taken up with the pictures of the extraordinary biffo between South Australian Premier Jay Weatherill and federal Energy Minister Josh Frydenberg when they appeared together in Adelaide.</p>
<p>It was all a metaphor for the shambolic national energy debate, in which the process is chaotic and politics trumps policy.</p>
<p>Remember the report the government commissioned last year from Chief Scientist Alan Finkel on the future security of the electricity market? Finkel continues to work away methodically, amid the madness.</p>
<p>His final report is not due until mid-year. But the government in December dismissed his interim report’s apparent positive nod towards an emissions intensity scheme, and it is putting down various markers ahead of the final one.</p>
<p>In February it signalled it saw merit in giving some help to build new “clean coal” power stations. Now has come a A$2 billion plan to increase the capacity of the Snowy Hydro by 50%, with Turnbull declaring himself a “nation building prime minister”. </p>
<p>The plan has been languishing in Snowy Hydro’s bottom drawer for years. Its unveiling came a day after Turnbull extracted a promise from LNG exporters to provide more local supply, with the threat the government would use its power over exports if they don’t deliver.</p>
<p>Despite a cabinet committee being set up on energy, ad hocery and special interests abound as the government struggles with the issue that Turnbull declared in February would be “a defining debate in this parliament”.</p>
<p>Turnbull is throwing out ideas and initiatives as he goes, rather than producing an integrated blueprint.</p>
<p>This week’s South Australian $550 million energy plan, including a new state-owned gas-fired power station, might have been a response to a problem the state should not have allowed to happen, and may be open to criticism, but at least it had an overall coherence.</p>
<p>Turnbull knows that putting a price on carbon is needed. But he can’t embrace that because it’s anathema to the conservative Liberals and the Nationals.</p>
<p>Equally, as a man with a good eye to what happens in the business world, he is aware that investors won’t be going down the coal route. But the Nationals, especially those from Queensland, are heavily committed to coal.</p>
<p>So whatever the final federal government energy policy looks like, it will be distorted to a greater or lesser extent by the political constraints Turnbull is under.</p>
<p>The process has also eschewed any attempt to pursue constructive federal-state relations. Ever since the seismic SA blackout last year, the federal government has unrelentingly attacked the state Labor government over its heavy commitment to renewable energy.</p>
<p>Weatherill gave it back in spades when he was standing beside Fydenberg on Thursday. Turnbull said Weatherill’s behaviour “spoke volumes about the premier’s state of mind at the moment”. That’s no doubt true.</p>
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<p>It is not surprising that Weatherill, facing an election next year, has found the constant federal campaign against him over the top. It has gone well beyond what could be considered reasonable policy criticism and politicking, and is unlikely to do the Turnbull government much good when the public would prefer a co-operative approach on a crucial issue.</p>
<p>Alongside the energy debate the government is grappling with what will be a centrepiece of the May budget – ways to make housing more affordable. Like energy security, it is one of those “back to basics” issues.</p>
<p>At the moment the housing debate is sounding a bit like the tax debate of the Turnbull government’s earlier days – the table is laden with options.</p>
<p>One option in the chattersphere is to allow young people to use their superannuation to help them get into the market.</p>
<p>When then-treasurer Joe Hockey flirted with this proposition Turnbull said it would be “a thoroughly bad idea” – which is as true now as it was then, and is a view taken by some senior ministers.</p>
<p>Michael Sukkar, assistant minister to the treasurer, who is working on the budget’s housing affordability plan, has been pushing the super proposal. Reportedly Treasurer Scott Morrison is open-minded, Finance Minister Mathias Cormann is dubious, and Revenue Minister Kelly O'Dwyer, who has day-to-day ministerial responsibility for superannuation, is against.</p>
<p>Apart from super being for retirement, critics argue that using it for housing would just drive up prices.</p>
<p>Turnbull was still focused on supply when pressed this week. “The key to having more affordable housing is to build more housing,” he said.</p>
<p>“And so the argument against demand-side measures in isolation is that if all you do is pump up demand without increasing supply, what you end up doing is pushing up the price of housing and there is no net benefit.</p>
<p>"It is a complicated issue but the one fundamentally substantial point is that if you want to have more affordable housing you’ve got to build more housing and that requires changes to zoning and planning, it requires governments, and that’s mostly state and local governments, to make it easier for new dwellings to be built.”</p>
<p>Morrison has flagged extensive changes to arrangements for social housing as part of the housing package.</p>
<p>In raising expectations of what it can do to make house buying more affordable, the government is walking on dangerous ground.</p>
<p>As with energy policy, it is hemmed in by its own political constraints.</p>
<p>Action to curb negative gearing and the capital gains tax discount would be desirable. But the government has trashed Labor’s proposals on these for a year. When there was recent speculation about a possible capital gains tax change for property investors, the government seemed to rule it out. Some sources maintain it is not dead, but others say it would pose a problem with the “base”.</p>
<p>While it continues to refuse to consider action in these areas the government ties its hands.</p>
<p>Especially with the constraints, the room to make a real difference on housing affordability is limited. But with this budget vital for Turnbull’s political fortunes, one thing the government must avoid is its affordability package failing to meet the spruiking that precedes it.</p>
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<p class="fine-print"><em><span>Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Malcolm Turnbull had the media troop to Talbingo in the Snowy Mountains for Thursday’s big Hydro announcement.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/745222017-03-14T19:15:38Z2017-03-14T19:15:38ZSouth Australia makes a fresh power play in its bid to end the blackouts<p>South Australia’s government has unveiled its keenly anticipated new <a href="http://ourenergyplan.sa.gov.au/">energy plan</a>, with the aim of making itself more self-sufficient.</p>
<p>Against the backdrop of repeated crises such as the blackouts of last month and September last year, and a dramatic offer from Tesla founder Elon Musk to fix the state’s energy security problems, the new plan proposes a range of measures to fix what Premier Jay Weatherill has described as the “failures” of national electricity regulation.</p>
<p><strong>Battery storage</strong></p>
<p>First, as almost universally anticipated, there will be a tender for a battery storage facility capable of delivering 100 megawatts of power, to be funded from a A$150 million Renewable Technology Fund. The <a href="http://ourenergyplan.sa.gov.au/assets/our-energy-plan-sa-web.pdf">plan document</a> says this project will “modernise South Australia’s energy grid and begin the transformation to the next generation of renewable-energy storage technologies”. </p>
<p>Neither the <a href="https://theconversation.com/au/topics/national-electricity-market-2810">National Electricity Market</a> rules nor any other federal policy provides any specific mechanism to encourage battery installation. Nor do the existing regulations allow battery operators to be rewarded for other services they could provide, including responding rapidly to price spikes or to sudden drops in voltage on the grid. </p>
<p>Large battery installations, if appropriately configured, would be capable of providing large injections of energy to the grid over short periods, as a way to offset extreme volatility. Both SA and Queensland have been plagued by such volatility in recent months, causing a rash of short-term price spikes indicative of markets without enough competition. </p>
<p>The <a href="http://www.aemc.gov.au/">Australian Energy Market Commission</a> (AEMC) is currently considering a Rule change, termed the 30 minute/5 minute trading interval change, proposed by a large electrolytic zinc smelter in Townsville. The change is ferociously opposed by established generators, but supported by almost everyone else. If and when the AEMC ever gets around to approving the rule change, large battery installations would be able to compete directly with generators, thereby both gaining a new source of revenue and helping to keep wholesale prices within reasonable limits. </p>
<p><strong>Taking back control</strong></p>
<p>The second component of the plan is to introduce legislation that would allow the state government to override the NEM’s market dispatch process for generation in the event of an emergency such as the demand peaks that triggered last month’s blackouts. </p>
<p>This is an obvious response to what is widely seen, at least in SA, as the reluctance of the federal regulator to use its powers to suspend the market. Many observers consider that such reluctance was most evident in the morning of the statewide blackout last September, and believe that earlier intervention could have prevented it, despite the massive storm damage to the state’s transmission infrastructure.</p>
<p>The new proposal could be interpreted as a challenge to the federal government over who controls SA’s electricity.</p>
<p><strong>Energy security</strong></p>
<p>Third, the plan will require all new generators with more than 5MW of capacity to demonstrate how they will contribute to the state’s energy security, by providing what are called ancillary services, such as frequency control, so-called inertia, or short-term storage. This is another clear statement that the state government believes the NEM rules, which establish markets for some frequency control services but not the other services mentioned above, fail to offer the state enough of a guarantee of reliable power supply.</p>
<p><strong>Build a new gas plant</strong></p>
<p>The government plans to become a power station owner, 20 years after the Liberal state government sold off the last publicly owned plant, by building a new open cycle (peaking) gas turbine plant. This decision is most obviously a reaction to the load-shedding blackout amid last month’s heatwave, when the operators of the Pelican Point gas power station were either unable or unwilling to increase output. Had they done so, load shedding could have been avoided. </p>
<p>At A$360 million, this seems a rather expensive way to avoid another load-shedding blackout, presumably justified on the basis of avoided political cost. It could be seen as a missed opportunity to provide more support for a far more innovative (though well proven in other countries) project to integrate solar thermal generation, gas generation and <a href="http://reneweconomy.com.au/molten-salt-storage-for-rooftop-solar-sa-invention-wins-eureka-prize-99882/">molten salt storage</a>. </p>
<p>Solar thermal generation may gain support from the tender for new generation to supply the government’s own electricity requirements, and possibly some from the Renewable Technology Fund, but that remains to be seen.</p>
<p><strong>Energy security target</strong></p>
<p>Finally, the government will introduce a requirement, called an energy security target, requiring electricity retailers to source a minimum percentage of their wholesale requirements from local generators, rather than from Victorian coal-fired stations. </p>
<p>This will provide a guaranteed amount of revenue to local generators, thus reducing dependence on supply through the interconnectors with Victoria, with their associated security risks. </p>
<p>In a direct, though entirely unsurprising confrontation with the Commonwealth, the plan document states that “South Australia’s energy security target will transition to an EIS or Lower Emissions Target (LET) if or when national policy changes in the future”.</p>
<h2>The wider context</h2>
<p>In the policy document, Weatherill writes that the NEM is “failing South Australia and the nation”. Taken together, the various elements of the plan can be read as a list of how exactly the SA government considers it to be failing, and what powers the state proposes to assume in order to get it fixed.</p>
<p>Although the plan’s objectives are not stated explicitly, it is clear that they are threefold, and seen of equal priority:</p>
<ul>
<li><p>suppress retail price rises by introducing more competition into the wholesale market</p></li>
<li><p>enhance the physical security of electricity supply</p></li>
<li><p>encourage renewable generation and reduce greenhouse gas emissions.</p></li>
</ul>
<p>These priorities neatly match the three components of what the <a href="https://www.environment.gov.au/system/files/resources/97a4f50c-24ac-4fe5-b3e5-5f93066543a4/files/independent-review-national-elec-market-prelim.pdf">preliminary report</a> of the forthcoming Finkel Review calls the “energy trilemma”, which is the need to “simultaneously provide a high level of energy security and reliability, universal access to affordable energy services, and reduced emissions.”</p>
<p>With the review’s final version set to be delivered to the Commonwealth government in the coming months, it remains to be seen whether federal energy policy will become similarly proactive in the future.</p><img src="https://counter.theconversation.com/content/74522/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Hugh Saddler is a member of the Board of the Climate Institute. </span></em></p>South Australia has unveiled its keenly awaited energy plan, featuring battery storage, a state-owned gas power station, and a thumb of the nose to the federal electricity rules.Hugh Saddler, Honorary Associate Professor, Centre for Climate Economics and Policy, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/745412017-03-14T19:15:19Z2017-03-14T19:15:19ZSouth Australia’s energy plan gives national regulators another headache<p>The keenly awaited <a href="http://ourenergyplan.sa.gov.au/">new energy policy</a> unveiled by South Australian Premier Jay Weatherill features a range of headline-grabbing items, such as a plan to spend A$150 million on a 100-megawatt battery storage facility to help stave off the danger of future blackouts.</p>
<p>On page 7 of the <a href="http://ourenergyplan.sa.gov.au/assets/our-energy-plan-sa-web.pdf">policy document</a>, Weatherill explains part of his underlying rationale:</p>
<blockquote>
<p>The national market is now widely considered to be failing and in need of urgent reform. The ability of governments to influence the industry requires cooperation within and across state borders and at a Federal level – cooperation that needs to transcend politics and self-interest.</p>
</blockquote>
<p>Noble words, but the new policy doesn’t “transcend politics and self-interest”. Quite the contrary – it is a unilateral move by a state government understandably keen to safeguard itself after suffering vicious criticism at a federal level. </p>
<p>There are rules for how SA and the east coast states that make up the <a href="https://theconversation.com/au/topics/national-electricity-market-2810">National Electricity Market</a> (NEM) are supposed to behave, yet member states seem to be able to flaunt them, systematically undermining the NEM along the way.</p>
<p>Rightly or wrongly, the NEM does not account for schemes such as renewable energy targets or solar feed-in tariffs. This means that when states pursue them, they can distort the market in the process.</p>
<p>There is conjecture about how much blame the Weatherill government should shoulder for the reliability issues that have beset SA’s electricity network. Either way, the decision has been made to fix it with yet more unilateral state government intervention in what is supposed to be a federated electricity market.</p>
<p>As a result, the new policy is likely to cause major headaches for the NEM and its operators. The announcement includes plans to give the state’s energy minister Tom Koutsantonis the power to override the NEM’s operating rules, allowing him to order generators to supply extra power when he deems it necessary.</p>
<p>This might help avert another South Australian blackout, but it will also undermine the role of the <a href="https://www.aemo.com.au/">Australian Energy Market Operator</a> (AEMO), which is responsible for managing the supply of electricity within the NEM. I will be fascinated to see how the SA government deals with the complex issue of what price they will pay for such power.</p>
<p>If the NEM is experiencing a peak in demand and South Australia is facing a shortage, will the South Australian Minister be able to override AEMO and demand private power generators in SA deliver power at a price determined by the minister? Or will the price be the one dictated at that moment by the market?</p>
<p>It is unlikely that the predominantly Labor-run states that now constitute the NEM will allow any adverse action against South Australia. In fact, the SA Parliament is the body through which rules of the NEM are legislated, so it will be nigh-on impossible to toss SA out of the NEM, lest the whole house of cards collapses.</p>
<h2>Going it alone</h2>
<p>Two other interesting aspects from the South Australian “energy intervention” is the construction of a new A$360 million gas-fired power plant, courtesy of SA taxpayers, and the A$150 million battery bank.</p>
<p>Presumably the SA government would like this new power plant to be able to sell electricity into the NEM, but to reserve the right to commandeer its output when circumstances dictate. It is not at all clear that the NEM rules allow this. </p>
<p>Consider the circumstances during last month’s heatwave, when both SA and New South Wales were facing power shortages. Under SA’s proposed new rules, NSW would be on its own (unless it develops a similar policy of its own). Hardly an example of cooperation.</p>
<p>The same issue will apply to the battery bank. Will it only be on standby for power shortages in SA, or will it be able to discharge into the NEM to take advantages of peak pricing? Could this result in SA finding its batteries empty when the wind stops blowing?</p>
<p>The SA government is correct to point out the deficiencies in the NEM, and even perhaps to claim that it is failing the nation. But an interstate scheme cannot be fixed by the unilateral actions of one state government – in this case, it is likely to be worsened.</p>
<p>The most worrying prospect of all, as far as the NEM is concerned, is the possibility that this will increase investment uncertainty still further, making it even less likely that the interstate grid will attract the new investment it needs.</p>
<p>If that happens, we might well see a few more states deciding to follow SA’s lead and plan sweeping energy reforms of their own.</p><img src="https://counter.theconversation.com/content/74541/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jeffrey Sommerfeld is involved with an energy analytic consultancy he established with two other persons with PhD expertise in energy. He/they are not doing this research on behalf of a client and will receive no direct benefit from it. He was an adviser to former Queensland LNP energy minister Mark McArdle from April 2012 to July 2013.</span></em></p>South Australia is investing $550 million in a plan to improve the reliability of its electricity. But the side-effect is that the National Electricity Market will now be even harder to run.Jeffrey Sommerfeld, Doctorate and Researcher in Energy Policy, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/688192016-11-16T03:32:55Z2016-11-16T03:32:55ZSA doesn’t need a nuclear plebiscite – Weatherill just needs to make a decision<p>South Australian Premier Jay Weatherill’s <a href="http://www.abc.net.au/news/2016-11-15/sa-nuclear-referendum-wont-happen-before-2018-election/8026166">announcement</a> of a <a href="http://www.smh.com.au/federal-politics/political-news/south-australian-referendum-to-be-a-plebiscite-on-nuclear-waste-20161114-gsp54x.html">non-binding public vote</a>, no earlier than 2018, on his proposed high-level nuclear waste storage facility looks like an act of political desperation. </p>
<p>It’s understandable that Weatherill wants to explore every possible option to replace some of the jobs lost in his state when the Abbott government <a href="https://theconversation.com/managed-decline-to-rapid-demise-abbotts-car-industry-gamble-23124">withdrew support for the car industry</a>. To that end, he took the unusual step of setting up a <a href="http://nuclearrc.sa.gov.au/">Royal Commission</a> to consider South Australia’s potential role in the nuclear industry. His appointed Commissioner, Kevin Scarce, faced <a href="http://www.abc.net.au/pm/content/2015/s4201053.htm">accusations of pro-nuclear bias</a>. </p>
<p>Scarce’s <a href="http://yoursay.sa.gov.au/pages/nuclear-fuel-cycle-royal-commission-report-release/">report</a> put a very positive spin on the idea of SA accepting high-level radioactive waste from other countries, suggesting that nations like Japan, South Korea and Taiwan would be willing to pay serious money to make their nuclear waste problems go away. </p>
<p>The local business community embraced the idea enthusiastically, while Adelaide’s newspaper, The Advertiser, published a series of articles promoting the scheme, describing the expected economic returns as “<a href="http://www.adelaidenow.com.au/news/south-australia/nuclear-waste-dump-would-tip-445b-into-south-australian-economy-royal-commission-reveals/news-story/9c134d8b18020768b1e6c419d997982f">gigantic</a>” and running Liberal senator Sean Edwards’ claim that nuclear energy would have “<a href="http://www.adelaidenow.com.au/news/south-australia/liberal-senator-sean-edwards-unveils-radical-plan-for-a-booming-nuclear-industry-in-south-australia/news-story/6717544ca509ceb461c13935255c8636">no cost apart from the poles and wires</a>”.</p>
<p>The way ahead was not straightforward, however, with the community clearly divided. Public meetings convened by those opposed to the proposal saw packed halls, and thousands turned up to a <a href="http://www.abc.net.au/news/2016-10-15/nuclear-waste-dump-protesters-bring-the-fight-to-adelaide/7935954">rally outside Parliament House</a>. Indigenous groups are particularly hostile to the prospect of overseas radioactive waste being brought onto their land. </p>
<p>Next, a citizens’ jury was appointed to offer a verdict on the issue. The randomly selected individuals interrogated experts with a range of views and probed the findings of the Royal Commission in great detail over several days. Their <a href="https://www.theguardian.com/environment/2016/nov/07/citizens-jury-rejects-push-for-south-australian-nuclear-waste-dump">two-thirds majority view that the scheme should be dropped</a> was seen by many as sounding its death knell. </p>
<p>The jury’s scepticism is understandable. After deep probing of the estimates, they concluded that the numbers are very rubbery. Moreover, recent examples like the <a href="http://www.adelaidenow.com.au/news/south-australia/new-royal-adelaide-hospital-up-to-another-year-off-after-health-minister-rejects-new-plan-to-fix-alleged-safety-defects/news-story/d693c1c28bc246806c4d6f5cf643f528">Royal Adelaide Hospital redevelopment</a> do not inspire public confidence in the state government’s ability to manage a complex project within a fixed budget. So the jury decided that the probability of a good financial outcome was not high enough to justify risking billions of dollars of public money developing the waste management system.</p>
<h2>Pressing the plebiscite button</h2>
<p>It’s difficult to know why we need a plebiscite on top of all this. If government members want to know what well-informed members of the public think, they can read the <a href="http://assets.yoursay.sa.gov.au/production/2016/07/12/10/28/13/df622a91-cdbb-486d-bbed-20796a4109d5/Nuclear%20Citizens'%20Jury%20FINAL%20Book.pdf">report</a> of their own citizens’ jury. If they want to know what relatively uninformed members of the public think, they can consult opinion polls. And if they want to know what members of the public think after being systematically fed slanted information, they can check the <a href="http://www.adelaidenow.com.au/news/south-australia/exclusive-advertisergalaxy-opinion-poll-reveals-nearmajority-support-for-sa-nuclear-dump/news-story/01a724864c1b5e5f3ff54833097855a5">polls conducted by The Advertiser</a>.</p>
<p>The only rational explanation for Weatherill’s decision to hold a public vote is that he is hoping for a different outcome. It’s a political tactic with a very notable recent precedent. When it became clear to conservatives in the Abbott government that they had lost the public debate on same-sex marriage, and that a free vote in parliament would probably see it approved, they came up with the idea of holding a national plebiscite. At the very least, they thought, this would delay the arrival of an outcome they opposed, while there was always the chance that a well-funded, carefully targeted scare campaign might shift the public mood. </p>
<p>But the same-sex marriage plebiscite died when it became clear that it would not be binding on politicians, and that public money would be used to fund the opposing campaigns. Senators sniffed the public wind and <a href="https://theconversation.com/the-plebiscite-is-dead-but-the-quest-for-marriage-equality-lives-on-68409">voted down the scheme</a>.</p>
<p>Weatherill has invested a lot of political capital in his nuclear waste proposal. He funded the Royal Commission and the citizens’ jury process. But by pressing the plebiscite button as a way to end the ongoing impasse, he risks running foul of the same problems. </p>
<p>In Canberra, the Senate reflected the general public opinion that a non-binding plebiscite on same-sex marriage would be a waste of taxpayers’ money, as well as probably causing an acrimonious and unproductive public debate. One might very well say the same about the idea of a vote on radioactive waste management. </p>
<p>We elect our politicians to decide on policy after studying the issues carefully. It is therefore hard to justify spending millions of dollars on an expensive opinion poll. </p>
<p>Whether Weatherill opts to abandon his radioactive waste proposal or push ahead with it, his decision will inevitably be very unpopular with some. It’s a tough call, but it’s his job to make it.</p><img src="https://counter.theconversation.com/content/68819/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ian Lowe is the former president of the Australian Conservation Foundation. </span></em></p>After a Royal Commission and a citizens’ jury, South Australian Premier Jay Weatherill has enough advice to decide on his nuclear waste dump plan. Which makes his decision to hold a plebiscite baffling.Ian Lowe, Emeritus Professor, School of Science, Griffith UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/594682016-06-15T20:16:41Z2016-06-15T20:16:41ZState of the states: South Australia’s economy is the laggard of a nation in transition<figure><img src="https://images.theconversation.com/files/125641/original/image-20160608-15041-1xwldq1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">South Australia is proving to be a key point of interest for the electoral contest – not least because of the rise of Nick Xenophon's new party.</span> <span class="attribution"><span class="source">AAP/Julian Smith</span></span></figcaption></figure><p><em>Ahead of polling day on July 2, our <a href="https://theconversation.com/au/topics/state-of-the-states-2016">State of the states series</a> takes stock of the key issues, seats and policies affecting the vote in each of Australia’s states and territories.</em></p>
<hr>
<p>Not for the first time, there is something incongruous about South Australian politics.</p>
<p>The 2013 federal election saw a change of government, yet only one seat changed hands in SA (<a href="http://www.abc.net.au/news/federal-election-2016/guide/hind/">Hindmarsh</a>). Skip forward three years and the Turnbull government looks set to be returned – albeit by a whisker. Yet SA is proving to be a key point of interest for the electoral contest, not least because of the X-factor – the Nick Xenophon effect.</p>
<p><a href="http://www.abc.net.au/news/2016-05-30/one-in-five-south-australian-to-vote-nick-xenophon-team/7458606">Polling suggests</a> Nick Xenophon Team (NXT) candidates in SA lower house seats could attract more than 20% of first preferences. This would bring a range of seats into play, and ultimately could be a wrecking ball against the major parties.</p>
<h2>Key seats</h2>
<p>On election night, the results in three key SA seats will be worth keeping an eye out for.</p>
<p>In Hindmarsh, Liberal incumbent Matt Williams has to hold off a challenge from Steve Georganas, who held the seat from 2004 to 2013. If Labor fancies any chance of returning to office, then this is a key target.</p>
<p>Unexpectedly, the normally safe Liberal seat of <a href="http://www.abc.net.au/news/federal-election-2016/guide/mayo/">Mayo</a> is in play. NXT candidate Rebekha Sharkie is a former staffer to the incumbent MP – the SA Liberals’ falling star, Jamie Briggs. A large NXT vote could see Briggs lose his seat. </p>
<p>In <a href="http://www.abc.net.au/news/federal-election-2016/guide/boot/">Boothby</a>, retiring Liberal MP Andrew Southcott is hoping to hand over the reins to conservative newspaper columnist Nicolle Flint. The NXT vote in Boothby is unclear; Labor candidate Mark Ward might sense a slim chance of stealing the seat, held on a 7.1% margin. </p>
<p>While the lower house tends to dominate attention, the Senate race looks fascinating. Simon Birmingham has <a href="http://www.adelaidenow.com.au/news/national/federal-election/federal-election-2016-cory-bernardi-loses-top-spot-on-liberal-senate-ticket/news-story/91d04cf024b502a61dc5d0c9ff286946">taken top spot</a> for the Liberals, pushing Cory Bernardi into second place – a shrewd move given Bernardi’s polarising politics. </p>
<p>Penny Wong will lead Labor’s charge to increase its numbers, although the reappearance of factional powerbroker Don Farrell <a href="http://www.abc.net.au/news/2016-05-10/don-farrell-back-in-new-run-for-the-senate/7402990">may push</a> Anne McEwen out of the Senate. </p>
<p>The Greens will hope for an improved vote, although Sarah Hanson-Young hardly helped matters with a <a href="http://www.smh.com.au/federal-politics/federal-election-2016/election-2016-sorry-what-senator-sarah-hansonyoung-stumbles-on-superannuation-policy-20160601-gp8r7z.html">car-crash interview on superannuation</a>. Robert Simms is a smart, new brand of Green, and will aim to <a href="http://www.theaustralian.com.au/federal-election-2016/federal-election-2016-its-rob-simms-or-bob-day-for-senate/news-story/16f9606e58ca1e7004d59dd19db26a21">take the last Senate spot</a> from Family First’s Bob Day. </p>
<p>The NXT team is aiming for an incredible four Senate seats, but three looks <a href="https://theconversation.com/aided-by-the-new-senate-rules-nick-xenophon-should-have-a-happy-election-night-59900">more likely</a>. </p>
<h2>Key state issues</h2>
<p>At the last election, <a href="http://politicsir.cass.anu.edu.au/research/projects/electoral-surveys/australian-election-study/aes-2013">Australian Election Study</a> data showed the most important issue for Australian voters is the management of the economy, followed by health care and then education. There is no reason to think this has changed. </p>
<p>For the past few years, the SA economy has been the laggard of a wider economy in transition. Its <a href="http://lmip.gov.au/default.aspx?LMIP/LFR_SAFOUR/LFR_UnemploymentRate">unemployment rate</a> is the highest of any Australian state or territory.</p>
<p>Prime Minister Malcolm Turnbull has found some common cause with SA Premier Jay Weatherill in <a href="http://www.sbs.com.au/news/article/2016/06/03/pm-tries-nerd-goggles-adelaide">trying to shape</a> a “new economy” in the state. The end of the <a href="https://www.theguardian.com/business/grogonomics/2015/nov/30/transition-mining-boom-is-bust-or-is-it">mining boom</a> and the <a href="https://theconversation.com/political-fortunes-of-two-states-ride-on-the-end-of-the-car-industry-23068">death of the car industry</a> has placed added pressure on the defence industry to prop up the state’s fortunes.</p>
<p>A few local issues are playing out that might have an impact at the ballot box. The <a href="http://www.abc.net.au/news/2016-03-22/new-royal-adelaide-hospital-delayed-until-may-sa-government/7266912">delays in opening</a> the new Royal Adelaide Hospital and the state government’s <a href="http://www.adelaidenow.com.au/news/south-australia/survey-finds-majority-of-sa-surgeons-dont-support-transforming-health-reform-plan/news-story/48977ffb4c3e863a83be8be5b8364350">troubled Transforming Health agenda</a> has brought health care issues into focus.</p>
<p>Finally, there <a href="http://indaily.com.au/news/2016/02/17/adelaide-needs-higher-population-growth-infrastructure-australia/">remains a desire</a> for a fresh wave of infrastructure building. </p>
<h2>Policy proposals</h2>
<p>Lucky South Australians have been inundated during the campaign with regular visits from both Malcolm Turnbull and Bill Shorten. It’s a measure of how important the state has become that the Liberals have <a href="http://www.malcolmturnbull.com.au/media/delivering-jobs-and-growth-for-south-australia">launched a plan for SA</a>. Both major parties are targeting the state on a range of issues.</p>
<p>Given the previous Abbott government’s bungled handling of the submarine deal, the Liberals are pushing hard to reassure South Australians that jobs will follow on from this, along with other defence announcements. All sides are claiming a victory on this issue – including the ubiquitous Xenophon.</p>
<p>A key flashpoint remains the troubled <a href="https://theconversation.com/arriums-whyalla-steelworks-another-threat-to-fragile-manufacturing-sector-57475">Arrium steelworks</a> in Whyalla. While the Liberals quickly ruled out direct assistance to Arrium, it <a href="http://www.abc.net.au/news/2016-03-09/arrium-rescue-package-urgent-matter/7231742">fast-tracked a project</a> for steel for the Tarcoola rail upgrade to bring in more business. Labor <a href="http://www.whyallanewsonline.com.au/story/3849546/steel-plan-hope-for-whyalla/">outlined a six-point plan</a>, which includes providing assistance to local steel producers. </p>
<p>Elsewhere, the Liberals’ plan – inevitably linked to the “jobs-and-growth” slogan – targets jobs created through the National Disability Insurance Scheme, and infrastructure through the <a href="http://www.infrastructure.sa.gov.au/nsc">North/South Corridor</a> and the <a href="https://renewalsa.sa.gov.au/projects/tonsley/">Tonsley redevelopment</a>. </p>
<p>Strikingly, federal Labor leader Bill Shorten has brought class back into politics, and is seeking appeal on grounds of fairness. Shorten is playing to Labor’s traditional strengths and hoping national commitments on “Gonski” levels of funding for education, reinvigorating TAFE, and strong support for Medicare will resonate in SA. </p>
<p>No parties, except the Greens, are going near the <a href="http://www.abc.net.au/news/2016-05-06/sa's-nuclear-royal-commission's-findings-due-next-week/7388976">“nuclear” issue</a> until the state government’s consultation process is over. </p>
<hr>
<p><em>Catch up on <a href="https://theconversation.com/au/topics/state-of-the-states-2016">others in the series</a>.</em></p><img src="https://counter.theconversation.com/content/59468/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rob Manwaring does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The key battleground of South Australia has been inundated during the campaign with regular visits from both Malcolm Turnbull and Bill Shorten.Rob Manwaring, Lecturer, Politics and Public Policy, Flinders UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/569102016-03-31T19:21:05Z2016-03-31T19:21:05ZTurnbull’s plan to fix the federation is bold – but can he deliver?<figure><img src="https://images.theconversation.com/files/116882/original/image-20160331-6126-1rog8dc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Whether he succeeds or not, Malcolm Turnbull's attempt to reform the federation will be a long and tricky process.</span> <span class="attribution"><span class="source">AAP/Ben Macmahon</span></span></figcaption></figure><p>The lead up to this year’s first Council of Australian Governments (COAG) meeting has been dominated by Prime Minister Malcolm Turnbull’s surprise proposal to allow the states to collect a share of income tax. Turnbull has <a href="http://www.smh.com.au/federal-politics/political-news/states-could-collect-income-tax-under-radical-plan-to-be-discussed-at-coag-20160329-gntoar.html">called it</a> “the most fundamental reform to the federation in generations”.</p>
<p>But the states are approaching this idea with caution, for good reason. They are accustomed to prime ministers talking big about fixing the federation and then failing to deliver. They will also want to know how changes to income tax collection will address the looming crisis in health and education funding. </p>
<h2>Reforming the federation: a recent history</h2>
<p>By making a bold proposal on federalism early in his tenure, Turnbull is following in the footsteps of two of his recent predecessors. </p>
<p>Kevin Rudd <a href="http://www.smh.com.au/national/rudd-vows-to-end-blame-game-if-elected-20070702-lmq.html">famously pledged</a> to end the “blame game” between federal and state governments, and worked with the premiers to simplify financial relations in a way that enhanced accountability. But his early successes were soon derailed by the reinstatement of conditional grants and an increasingly unilateral approach on health reform and the mining tax.</p>
<p>Tony Abbott sought to leave his mark on the federation as prime minister by establishing a <a href="https://federation.dpmc.gov.au/">white paper process</a> on federal reform. Like Rudd, Abbott was concerned about the overlap and duplication that have long blighted the Australian federal system, but his proposed solution was different. He wanted to clarify roles and responsibilities to ensure that states and territories were “<a href="https://theconversation.com/federal-state-reform-is-abbott-offering-the-real-deal-17280">sovereign in their own sphere</a>”. </p>
<p>The 2014 budget made it brutally clear to the states what Abbott had in mind. The Commonwealth announced that it was withdrawing A$80 billion in health and education funding that had been pledged to the states by the previous Labor government. Restoring state “sovereignty”, it seemed, involved the federal government backing out of areas of shared responsibility, particularly those that carry a hefty price tag.</p>
<p>Behind this was a big idea of some kind – a <a href="https://theconversation.com/abbott-draws-up-new-battlelines-in-the-fight-over-federalism-26743">desire to move away</a> from the “co-operative federalism” espoused by the early Rudd government, and make federal-state relations more competitive. But Abbott never explained how the states could possibly cover the funding shortfall created by the budget announcement.</p>
<p>It is a basic reality of Australian federalism that the Commonwealth collects most of the taxation revenue (around 80%), and this makes the states reliant on federal grants to meet its spending obligations. NSW Premier Mike Baird accused the federal government of <a href="http://www.dailytelegraph.com.au/newslocal/northern-beaches/premier-mike-baird-slams-cuts-to-health-and-education-funding-in-abbot-governments-federal-budget/story-fngr8hax-1226917317032">“outsourcing”</a> the crisis in hospital and school funding to the states.</p>
<p>The Abbott government’s withdrawal of health and education funding placed federal-state relations under strain, and any goodwill that had existed around federal reform quickly dissipated. The white paper process appears to have stalled.</p>
<h2>The federation under Turnbull</h2>
<p>Two years on, disagreements about how to fund hospitals and schools continue to dominate federal-state relations. South Australian Premier Jay Weatherill has been <a href="http://www.smh.com.au/federal-politics/political-news/south-australian-premier-jay-weatherill-stands-fast-by-gst-position-20160204-gmlzg9.html">particularly vocal</a> over this period. He recently advocated for a rise in the GST to help cover healthcare costs, but the idea failed to attract broad support. </p>
<p>Turnbull’s proposal to allow the states to <a href="http://www.pm.gov.au/media/2016-03-30/doorstop-penrith">collect income tax</a> is the latest “big idea” in this space. He is proposing to reduce federal income tax by a certain amount and allow the states to levy the same amount by imposing their own income tax. Over time, the states would gain the ability to alter the rate of income tax that they impose. The federal government would cut back its grants to state governments to offset lost revenue.</p>
<p>Turnbull’s intervention has unsurprisingly attracted a lot of attention. The Commonwealth seized control of income tax in 1942 and the states have not collected a cent of it since. Not since Malcolm Fraser has a prime minister offered the states a concrete opportunity to raise revenue through income tax.</p>
<p>There are two major benefits to Turnbull’s proposal. First, it would improve accountability in the way that taxation revenue is raised and spent in the federation. The states’ current reliance on federal money muddies accountability by making it impossible to know who to blame for failures in service delivery.</p>
<p>Second, it could enhance the capacity of the states to meet the growing costs of health care and education. The amount of revenue collected through income tax is likely to grow over time, and state governments may feel more motivated to spend their money wisely if they are the ones collecting it.</p>
<p>Both of these benefits would be very welcome. But, while Turnbull’s ambition is laudable, there are several reasons to treat his proposal with caution.</p>
<p>First, it is unclear if it will result in more money being available to spend on hospitals and schools. Offering states incentives to increase efficiency will help, but the benefit may only be marginal. Once states are able to alter their income tax rate, some may increase it and spend the windfall on health. But, equally, some governments may choose to reduce the rate with the result that hospitals ultimately receive less funding. </p>
<p>Second, states with smaller populations, such as Tasmania and South Australia, may be disadvantaged by a shift in income tax arrangements. Any new system would have to introduce some measure of fiscal equalisation to cater for this.</p>
<p>Third, Turnbull’s proposal remains light on detail. The last COAG meeting <a href="https://www.coag.gov.au/node/529#1">in December</a> agreed to investigate “a full range of Commonwealth and state tax and revenue sharing options”, but this week the premiers were still waiting to see a detailed written proposal. </p>
<p>Key information, such as the amount by which federal income tax would be reduced, is not available. This reflects the weaknesses of developing a major reform idea outside of established and collaborative processes such as the white papers on federal reform and taxation.</p>
<p>Recent history tells us that we should be cautious about newly minted prime ministers promising to fix the federation. At the same time, we should not allow cynicism about the prospects of federal reform to smother a good idea. </p>
<p>One thing is clear – if Turnbull’s bold tilt at reforming the federation is to succeed where others have failed, this week’s COAG meeting will just be the beginning of the process.</p><img src="https://counter.theconversation.com/content/56910/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Paul Kildea receives funding from the Australian Research Council.</span></em></p>Malcolm Turnbull’s bold plan to give states the power to levy income tax is a risky move, and the latest in a string of attempts to ‘fix’ federal-state relations that have not succeeded.Paul Kildea, Lecturer, Faculty of Law; Referendums Project Director at the Gilbert + Tobin Centre of Public Law, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/544822016-02-10T05:32:40Z2016-02-10T05:32:40ZPolitics podcast: South Australian Premier Jay Weatherill on the tax debate<p>South Australian Premier Jay Weatherill’s willingness to countenance an increase to the GST angered federal Labor colleagues. But Weatherill tells Michelle Grattan he has no regrets about his “circuit-breaker” intervention – although he also concedes an increase to the GST is not really a solution to the states’ revenue problems.</p>
<p>“It raises too much money in the early years and too little in the later years because GST is not growing at the rate of the growth of our health care expenditure,” he says.</p>
<p>“Even if we were to get a 15% GST it would just kick the can down the road for another 10 or 15 years to be back talking about this problem,” he says.</p>
<p>Weatherill explains why he has called for the states to receive a share of income tax revenue, the problems associated with raising land-based taxes and his disappointment in Malcolm Turnbull. </p>
<p>“This sort of approach that we’re now getting from Malcolm Turnbull is the sort of thing that reminds us of Tony Abbott. The glib one-liners, what I have described as an infantile debate where you can just focus on one thing without looking at the whole picture.”</p><img src="https://counter.theconversation.com/content/54482/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Jay Weatherill's willingness to countenance an increase to the GST angered federal Labor colleagues. But he tells Michelle Grattan he has no regrets about his "circuit-breaker" intervention.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/514902015-12-01T19:12:31Z2015-12-01T19:12:31ZWhy levying GST on banking has been in the ‘too hard’ basket<p>South Australian Premier Jay Weatherill has <a href="http://www.premier.sa.gov.au/images/speeches/20150923australianfinancialreviewtaxreformsummit.pdf">argued</a> for broadening the GST base to include all financial services, something also floated by the Financial System Inquiry. The idea has merit, although the complexity of the issue makes assessing the consequences and merits difficult.</p>
<p>Currently, some financial services (such as insurance) for which explicit fees are levied are subject to GST. But a major part of banking - taking deposits and making loans - is not. Historically it was seen as too difficult because of the nature of financial intermediation, but modern technology should make it feasible – albeit still difficult.</p>
<p>To understand the issues involved, a short primer on GST is required. GST, or Value Added Tax (VAT), applies a rate of tax (eg 10%) at each stage of the production process, based on the value added by the business (essentially equal to wages and profits). It achieves this by levying the tax on the value of the goods sold by the business but allowing tax credits for the GST included in the price paid by the business for purchases of goods and services as inputs (referred to as input tax credits).</p>
<p>Each business in the production process supply chain pays a net tax amount equal to the GST tax rate applied to its value added. When the completed good or service is sold to a consumer, the price incorporates all the net GST amounts paid in the production process, such that total GST revenue is essentially the 10% tax rate applied to the pre-GST sale price of goods and services sold to consumers.</p>
<h2>The challenge</h2>
<p>How would this apply to taking deposits (on which interest is paid) and making loans (on which interest is charged)? The value added in this process is relatively easy to identify. The difference between those interest rates (the net interest margin), if we ignore explicit fees charged for services provided, must cover costs of purchased inputs of goods and services by the bank (such as paper, pens, ink, or nowadays computer services) plus wages and profits.</p>
<p>So total value added by a bank can be readily calculated as the sum of its wage bill and its profits. The problem lies in splitting the value between business and retail customers and providers of deposits and loans.</p>
<p>As a very simplistic example, suppose the bank has $90 of deposits and $100 of loans (and $10 of equity capital) and a total value added (net interest margin minus purchased input costs) of $5. What method can be used to divide that $5 between depositors and borrowers as the value of services provided to each? And if there are numerous depositors and borrowers (and some of them business and some retail customers), possibly receiving or paying different interest rates, how much of the value added represents the cost of services provided to each?</p>
<h2>Why it makes sense</h2>
<p>Putting this process into the “too hard” basket, however, creates distortions to production and consumption. First, banks pay substantial amounts of GST on purchased inputs, and receive input tax credits which they are largely unable to use. Of course, banks can be expected to pass on the taxes paid to customers in the form of lower deposit rates or higher loan rates.</p>
<p>This creates a distortion of costs for business customers of the bank. For example, the loan interest they pay indirectly includes an implicit GST cost, but they do not receive any input tax credits to offset the GST amount they add to their product price.</p>
<p>As a very simplistic example, consider an individual who provides personal services using no purchased inputs for deferred payment and has a bank loan to meet living expenses until the payment is received. The loan interest is $10 and the individual needs a net $1,000 for those services and is subject to GST as a business. If there is no input tax credit on the loan interest the individual will need to charge GST on $1010, or GST of $101 such that the gross price charged to the purchaser of these services would need to be $1,111. If the loan included (for example) an input tax credit of $1 because intermediation services were “GST-able”, the gross price would only need to be $1,110 (because the net GST bill paid by the individual would only be $100).</p>
<p>Because of the current GST exemption, businesses do not get the benefit of all the GST paid in the “upstream” parts of the production process and therefore need to charge higher prices. </p>
<p>A second type of distortion arises from consumer demand for financial services. While the GST paid by banks is reflected in interest rates paid and charged, the absence of GST on the value added by bank intermediation reduces the relative price of financial services. Arguably, this contributes to higher demand for financial services relative to other goods and services, perhaps contributing marginally to the growth in size of the finance sector over recent decades.</p>
<p>A third type of distortion arises from decision making by banks regarding supply and pricing of different types of financial services. For example, costs of intermediation can be recouped by the net interest margin or by explicit fees for services associated with intermediation – some of which may be “GST-able”.</p>
<h2>Difficult to measure</h2>
<p>Is it possible to overcome these difficulties? One would hope so. Banks have very sophisticated activity based costing systems and funds transfer pricing systems which are designed to identify the cost and value created by each transaction. Using these to identify value added for each type of transaction, and thus the base for applying GST, may be complicated but not infeasible.</p>
<p>Is it worth doing? Certainly the sum of profit and wages paid (ie value added) of banks, is a very large sum, much of which is not subject to GST. While the banks will claim they pay large amounts of GST (on their purchased inputs) which they can not claim as input tax credits, it is ultimately the users of bank financial services who pay those amounts.</p>
<p>Broadening the GST base to fully include financial intermediation would increase GST revenue (estimated at around A$3.5 billion from households) and would remove a number of distortions from the current system (including almost A$1 billion from over-GST taxation of business. But identifying precisely the overall effects, the benefits, and the cost of change is a fairly Herculean effort.</p><img src="https://counter.theconversation.com/content/51490/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Kevin Davis does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Calls for GST on banking make sense, but working out the ultimate benefit is no easy task.Kevin Davis, Research Director, Australian Centre for Financial Studies Licensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/480172015-09-29T20:09:29Z2015-09-29T20:09:29ZAs China launches a national emissions trading scheme, Australian states threaten to go back to the future<figure><img src="https://images.theconversation.com/files/96609/original/image-20150929-30993-1qn1jwi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The dawn of a reborn emissions trading scheme led by South Australia is not as unfeasible as Premier Jay Weatherill suggests.</span> <span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File%3ATorrens_Island.jpg">Adam Trevorrow/Wikimedia Commons</a></span></figcaption></figure><p>China has <a href="https://theconversation.com/too-big-to-fail-china-pledges-to-set-up-landmark-emissions-trading-scheme-48214">added itself</a> to the list of countries prepared to price carbon. Of course, Australia knows more about putting a national price on carbon than almost any other country. And it also knows about dismantling such a price. </p>
<p>But what is perhaps less well-known is the significant role the Australian states and territories have played in carbon pricing. Based on reports earlier this month, it’s conceivable that they could play such a role again. </p>
<p>South Australia’s environment minister, Ian Hunter, <a href="http://www.theaustralian.com.au/national-affairs/climate/states-with-threat-to-go-it-alone-on-ets/story-e6frg6xf-1227533909067?sv=505a79ee78dffc4a5b938aa3d66b452c">reportedly said</a> last week that, while the state “had always supported” a national emissions trading scheme (and it has), it “could act unilaterally if it were necessary” (and it can). </p>
<p>Hunter <a href="http://indaily.com.au/news/2015/09/17/sa-explores-state-based-emissions-trading-scheme/">said</a> that the SA government was gathering information about state-based schemes and that – more interestingly – he had earlier <a href="http://indaily.com.au/news/2015/09/17/sa-explores-state-based-emissions-trading-scheme/">raised</a> the prospect of an “interstate ETS” with his counterparts from New South Wales, Victoria and Queensland. He claimed that those ministers were supportive of his idea.</p>
<p>It was further <a href="http://www.theaustralian.com.au/national-affairs/climate/states-with-threat-to-go-it-alone-on-ets/story-e6frg6xf-1227533909067?sv=505a79ee78dffc4a5b938aa3d66b452c">reported</a> that Hunter had requested information about state-based and provincial schemes such as those operating in California and Quebec.</p>
<p>He has now backed away from these comments, and South Australian Premier Jay Weatherill subsequently <a href="http://www.businessspectator.com.au/news/2015/9/22/climate/state-based-ets-not-possible-weatherill">stated</a> that there were “some very substantial constitutional barriers which would prevent us from introducing such a scheme” – which there really aren’t.</p>
<h2>Australia’s tortured history of carbon pricing</h2>
<p>Carbon pricing in Australia has a tortured history and it begins – and perhaps ends – with significant state action.</p>
<p>The “constitutional barriers” to which Weatherill referred are not as substantial as he makes out. Australian states are generally free to enact their own climate and emissions-related legislation, and have done so in the past: NSW implemented its <a href="http://www.ipart.nsw.gov.au/Home/Industries/Electricity/Greenhouse_Gas_Reduction_Scheme">Greenhouse Gas Reduction Scheme (GGAS)</a>, which closed in mid-2012, and Queensland ran its <a href="https://www.business.qld.gov.au/industry/energy/gas/queensland-gas-scheme">13% Gas Scheme</a> until the end of 2013. </p>
<p>In fact, by the time Australia’s <a href="http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/Browse_by_Topic/ClimateChange/Governance/Domestic/national/cprs">first proposed national emissions trading scheme</a> was announced in 2009, <a href="http://www.finance.gov.au/sites/default/files/Climate-Report.pdf">hundreds of climate and energy-efficiency schemes</a> were already running all over the country. This was mainly because the states and territories had filled the policy void left by the Commonwealth’s slow progress on the issue.</p>
<p>Then, in anticipation of a national emissions trading scheme, state governments began to wind up or roll back their own climate programs, to avoid duplicating the anticipated Commonwealth one. Of course, that program, the ill-fated <a href="http://www.finance.gov.au/sites/default/files/Climate-Report.pdf">Carbon Pollution Reduction Scheme</a>, didn’t make it through the Senate. We had to wait until 2011 for its successor, the <a href="https://www.comlaw.gov.au/Details/C2011A00131">Clean Energy Act</a>, which was itself dismantled in 2014 to make way for the current <a href="https://theconversation.com/au/topics/emissions-reduction-fund">Emissions Reduction Fund</a> (ERF), which is not based on emissions trading.</p>
<p>So it is clear that Australia has failed to implement and maintain a national price on carbon, although goodness knows it can certainly plan for one. </p>
<p>Without an ETS or a carbon tax (and there are <a href="https://theconversation.com/politics-aside-a-simple-carbon-tax-makes-more-sense-than-a-convoluted-emissions-trading-scheme-45433">real advantages to a carbon tax over an ETS</a>) at the national level (the ERF is hardly a substitute), why shouldn’t the states take action again and introduce their own carbon pricing scheme without federal involvement? After all, it has been done before.</p>
<h2>Collective state-based climate action</h2>
<p>In 2004 all of the Australian states and territories formed a National Emissions Trading Taskforce to develop a model for a national ETS. In August 2006 the taskforce released a <a href="http://www.caf.gov.au/Documents/nett-discussion-paper.pdf">discussion paper</a>, ahead of a <a href="http://web.archive.org/web/20070708082325/http://www.pmc.gov.au/publications/emissions/docs/emissions_trading_report.pdf">2007 report</a> from the Prime Ministerial Task Group on Emissions Trading.</p>
<p>The discussion paper detailed the states and territories’ clear preference for the Commonwealth to be involved in emissions trading. However, the paper <a href="http://www.caf.gov.au/Documents/nett-discussion-paper.pdf">said</a> that, in the event that the Commonwealth chose not to participate, operation of an ETS remained feasible without such participation: </p>
<blockquote>
<p>In the absence of Commonwealth participation, the State and Territory Governments would still be able to implement nationally consistent legislation based on the approaches used in previous areas of joint effort that have not involved the Commonwealth.</p>
</blockquote>
<p>The paper set out <a href="http://www.caf.gov.au/Documents/nett-discussion-paper.pdf">two options</a>. The preferred option involved using Commonwealth legislation to create an ETS, with states and territories passing complementary laws. </p>
<p>The second option, described as a “viable alternative”, was to go ahead without the Commonwealth, with one state to pass template legislation that the others would then copy. This is what Ian Hunter meant when he referred to an “interstate ETS”.</p>
<p>As the 2006 discussion paper <a href="http://www.caf.gov.au/Documents/nett-discussion-paper.pdf">noted</a>, this would be:</p>
<blockquote>
<p>… a relatively straightforward way to obtain consistent nationwide legislation without the involvement of the Commonwealth … [N]ational institutions could be created with powers conferred by each State and Territory…_</p>
</blockquote>
<p>Australia’s recent history shows that one dispenses with state-based programs at one’s peril. For some reason, Australia can’t seem to introduce and keep a national price on carbon. On past form, the states and territories might have more luck.</p>
<p>There are comparisons too with other federal countries. Both Canada and the United States currently have no national carbon price but significant provincial action. Last week we could have added China to that list, but it is now poised to take its provincial emissions trading schemes to the next level.</p><img src="https://counter.theconversation.com/content/48017/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Australia used to have state-based emissions trading schemes, before they were ditched in favour of the now-abandoned national one. State premiers might say there’s no way to resurrect them, but there is.David Hodgkinson, Associate Professor, The University of Western AustraliaRebecca Johnston, Adjunct Lecturer, Law School, University of Notre Dame AustraliaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/449272015-07-20T12:07:45Z2015-07-20T12:07:45ZThat GST debate: is it game over, game on, or just a never-ending game?<p>On Sunday, June 28, New South Wales Premier Mike Baird and South Australian Premier Jay Weatherill breakfasted at an Adelaide cafe. Baird had flown to SA for the meeting. Their discussion was about Tony Abbott’s “retreat” to discuss reform of the federation, which inevitably comes down to the need for tax changes.</p>
<p>Baird and Weatherill are on opposite sides of politics. But they are two of the more reasonable and well-performing politicians among a generally unimpressive line-up across the nation. They also know each other well, from their days as treasurers of their respective states.</p>
<p>They have now each floated proposals relating to the GST ahead of Wednesday’s retreat, to be held in Sydney. Their ideas are different, and Weatherill hasn’t embraced the more ambitious Baird plan – but he is helping give it oxygen. They are united in trying to make something of Wednesday’s meeting.</p>
<p>Baird’s plan is based in a frank admission of fiscal realities. Australia’s federal-state financial system, he wrote in Monday’s Australian, “is in imminent danger of tumbling over a fiscal cliff”, compromising the future ability to deliver quality health care. According to modelling done by NSW, on current projections “by 2030 the annual budget deficits across the commonwealth and states will be about $45 billion, of which about $35 billion will be generated by health”.</p>
<p>The problem cannot be solved by spending cuts, Baird argues, because our health system is already efficient on international standards. This is a more honest assessment than we get from the federal government, which sees room for cuts everywhere.</p>
<p>Baird says a revenue stream of $20 billion is needed before 2020 “to close the fiscal gap for the states and put our vital heath services back on a secure footing”. This has become particularly the states’ problem because the Abbott government announced in the 2014 budget that it would strip about $50 billion from projected federal spending for state health over a decade, as well as about $30 billion from education.</p>
<p>Under the Baird plan the GST would be lifted from 10% to 15% (but it would not be broadened), with all the extra money going to health care and to compensate those most hit by the rise. Under his model, households with incomes up to $100,000 would not be left worse off. The compensation would be paid through welfare and tax cuts.</p>
<p>When he unveiled his own plans earlier this month, Weatherill opposed increasing the GST or expanding it to cover fresh food. “Unless effects could be ameliorated, such changes would be regressive and hit low income earners hard,” he said in a speech to the National Press Club.</p>
<p>Baird argues the compensation he proposes would address the problem of regressiveness.</p>
<p>Despite his stand against radical GST reform, Weatherill has suggested there could be scope for more limited change – notably applying the GST to financial services, yielding $3.6 billion a year.</p>
<p>There is also the long-standing measure, repeatedly considered by treasurers but never quite signed off, to lower the threshold for the GST on imports.</p>
<p>Baird said on Monday that he had spoken to Tony Abbott about his plan in recent weeks. The Premier did an intensive round of contacts with other leaders just before releasing his proposal. He released a video which started by tapping into people’s disgust with the way politics is currently approached – “if you’re anything like me, you are sick of politics in this country”, with its point-scoring and attention to the daily news cycle rather than the big problems.</p>
<p>Abbott has welcomed the contributions by Baird and Weatherill. He has not so far put forward proposals of his own.</p>
<p>Federal Treasurer Joe Hockey also wants the GST changed. But there is a significant difference in what’s driving Hockey and what’s motivating Baird. The Abbott government wants to reform federal-state tax and spending arrangements to help it pursue lower income and company taxes. Baird is focused on how to fund the looming health spending increase.</p>
<p>At the weekend, Hockey promised to take a plan for income tax cuts to the election. But it is not clear, in current circumstances, where he thinks this money would be coming from. After all, last week he did declare “game over” for changing the GST, after Victorian Premier Daniel Andrews refused to countenance it. The federal government says there would need to be agreement by all states and territories and federal bipartisanship for it to pursue – but not this term – an increase in the GST rate or base.</p>
<p>The initiatives by Baird and Weatherill have prised the GST debate open a little way. The forces ranged against an increase in the rate or fundamental broadening of the base (as distinct from something strictly limited) are, however, still overwhelming, including the Labor states of Victoria and Queensland and the federal opposition.</p>
<p>Probably the most likely option out of Wednesday is for the meeting to ask for more work to be done.</p>
<p><strong>POSTCRIPT:</strong> </p>
<p>Labor up, Shorten down in Newspoll</p>
<p>Labor has extended its lead in two-party terms and on the primary vote but Bill Shorten has taken a knock, in Tuesday’s Newspoll <a href="http://www.theaustralian.com.au/national-affairs/newspoll/newspoll-shorten-support-sinks-deeper-as-alp-stretches-lead/story-fnc6vkbc-1227449968856">published in the Australian</a>.</p>
<p>The poll comes after Shorten’s appearance at the royal commission into trade union corruption. Labor will be relieved at the better party vote but the poll will reinforce concerns about Shorten’s leadership, making the coming weekend’s ALP national conference all the more important for him.</p>
<p>The opposition improved its two-party lead from 52-48% a fortnight ago to 53-47%. Labor’s primary vote rose 2 points to 39%, a four-month high. The Coalition was steady on 40%, while the Greens were down a point to 12%.</p>
<p>Satisfaction with Shorten fell one point to a record low of 27%. His dissatisfaction rating rose 3 points to a record 59%, giving him a net rating of minus 32. Abbott’s satisfaction rating was on 33%, and dissatisfaction with him was 60%, both unchanged. His net satisfaction level was minus 27. Abbott led Shorten as better prime minister 39% (steady) to 36% (down 3 points). </p>
<p><strong><a href="https://theconversation.com/politics-podcast-christophe-lecourtier-on-the-2015-paris-climate-conference-44598">Listen to the newest Politics with Michelle Grattan podcast, with French Ambassador Christophe Lecourtier, here</a>.</strong></p>
<iframe id="audio_iframe" src="https://www.podbean.com/media/player/ygxq3-574c5c" width="100%" height="100" frameborder="0" scrolling="no"></iframe><img src="https://counter.theconversation.com/content/44927/count.gif" alt="The Conversation" width="1" height="1" />
On Sunday, June 28, New South Wales Premier Mike Baird and South Australian Premier Jay Weatherill breakfasted at an Adelaide cafe. Baird had flown to SA for the meeting. Their discussion was about Tony…Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.