tag:theconversation.com,2011:/uk/topics/national-energy-guarantee-44929/articlesNational Energy Guarantee – The Conversation2019-09-17T07:19:29Ztag:theconversation.com,2011:article/1235962019-09-17T07:19:29Z2019-09-17T07:19:29ZPolitics with Michelle Grattan: Arthur Sinodinos with some reflections and advice<p>Arthur Sinodinos will soon leave the Senate, and early next year take up the position of Australian ambassador in Washington. A former staffer and one-time public servant as well as a former minister, in this podcast Sinodinos reflects on the challenges of pursuing reform, has some advice for ministerial staff in dealing with the public service, and warns about dangers for democracy and science posed by a polarised media. </p>
<p>A strong ally of Malcolm Turnbull, Sinodinos tells Michelle Grattan that the former prime minister was “prepared to make a stand for what he believed was right - and unfortunately there were others who didn’t seem to be too comfortable with that”. </p>
<p>On the current controversy about Liberal MP Gladys Liu and her past ties to groups with links to the Chinese regime, he says: “I think she’s trying to … make sure that she’s got her memory intact, as it were. And then I’m sure she will as necessary provide further information”.</p>
<p>On the contrast between the roles of staffer and politician: “One of the biggest differences is that when you’re the politician and the front person, the minute you say something … you own it, Whereas when you’re the adviser you give all the advice in the world but there’s not quite the same level of responsibility”. </p>
<h2>Transcript (edited for clarity)</h2>
<p><strong>Michelle Grattan:</strong> Arthur Sinodinos, can we start with your transition from being a senior staffer to a politician, albeit via a time in the business sector. What are the big differences between those two roles? </p>
<p><strong>Arthur Sinodinos:</strong> Well I think one of the biggest differences is that when you’re the politician and the front person, the minute you say something, it’s out of your mouth … you own it. Whereas when you’re the adviser, you give all the advice in the world but there’s not quite the same level of responsibility [as] when you actually have to go out there and say things and take the rap for them. And that is one of the big differences. And that does influence the way people approach the job. For example let me give you a story about the American ambassador. He was one of a number of people in the Reagan administration who allegedly told Reagan around 1987/88, don’t use that phrase “Mr. Gorbachev, tear down this wall”. But it was Reagan’s instinct to use that phrase. Now they were being risk averse, or minimising risk for him, but he had the instinct, and this is what it takes at the end of the day. You have to also go on your own instinct as the front person when something needs to be said or when you need to push the button and change tack on something. </p>
<p><strong>MG:</strong> You’re also a one time public servant. The bureaucrats these days often feel pushed around by ministerial staff. Do you think these staff too often become arrogant and feel everything is political, so therefore good policy is compromised? </p>
<p><strong>AS:</strong> I mean the practice we had in the Howard Government - after some early hiccups when a number of secretaries were fired - was to recognise that staffers and public servants have complementary roles and that the place operates best when there’s a bit of a team in place and each understands and respects the role of the other. And I think that’s always important. And my advice to young staffers or people starting out in staffing who maybe haven’t worked in the public service is get to understand the public service. They’re also your stakeholders and it’s important for people to work together. The public service is a great resource and it’s like any workforce, you’ve got to motivate them. And that’s important to get the best out of them. </p>
<p><strong>MG:</strong> You were one of Malcolm Turnbull’s closest supporters. Indeed you came back, I think, when you were on sick leave to support him in that last week. Looking back on the Turnbull government, do you think that there was any advice you could have given to help avoid the collapse of his prime ministership?</p>
<p><strong>AS:</strong> Unfortunately, I don’t think any advice would have saved Malcolm’s prime ministership in the end. There were just forces at work who I think were just determined to blast him out and unfortunately a series of events came together which brought that to a head. What I do admire about Malcolm is that the irony is in a sense he was blasted out over climate change twice. The first time in 2009 and the second time over the National Energy Guarantee and in a sense it’s admirable that he was prepared - even though at the end he was prepared to defer the National Energy Guarantee for a while - he was still prepared to make a stand for what he believed was right. And unfortunately there were others who didn’t seem to be too comfortable with that. There’ll be debates going on for years about whether Malcolm had the right political instincts. Well my view is these days what you need is authenticity and he was authentic in his own way, but unfortunately he wasn’t allowed I think to do the job that he could have done.</p>
<p><strong>MG:</strong> You’ve been at the political coalface now in one role or another over some four decades. How do you think politics has changed in that time and has it changed for better or for worse?</p>
<p><strong>AS:</strong> I think politics in many ways is much faster now. The media cycle is certainly faster - the 24/7 cycle. I think it’s also much easier for parties to be fragmented because it’s much easier for individuals to get a platform, partly through the way the media itself is fragmented.
One of the dangerous trends has been that the media itself has become a battleground. We used to look to the media to be the journals of record and today much of the media gets dragged into the actual fight and this is a danger for democracy in my view. It’s a danger for science which is increasingly being trampled in the public arena, and I think it’s a danger when we have a situation where people can essentially choose their own facts. And choose media outlets which feed their own version of reality and feed their confirmation bias. I think that’s dangerous for democracy going forward.</p>
<p><strong>MG:</strong> Well the media gets dragged in, or does it opt in? Has it decided to get involved more as participants? Obviously always media were participants, but there’s an increasing trend now.</p>
<p><strong>AS:</strong> Yes there is an element of that. And what that does is every action has an equal and opposite reaction. So if some start to go more one way others start to go the other way as if to try and bring back some balance. But the result of that is that overall it tends to create a greater feeling of partisanship.</p>
<p><strong>MG:</strong> Well let’s cut to the chase here. Do you think News Corp has become particularly partisan?</p>
<p><strong>AS:</strong> I think they have a particular business model, particularly Sky, and that’s attracted a particular viewership. But that also has meant that other outlets, I’ve noticed with the ABC and others, have tended to therefore have to take stronger stands on certain things because they feel they’re pulling against a shift in the other direction. And so that’s the point - that these forces tend to sort of create this more partisan field out there.</p>
<p><strong>MG:</strong> What is that business model?</p>
<p><strong>AS:</strong> I think the business model is to try and corner a particular part of the market and become the champions of that part of the market.</p>
<p><strong>MG:</strong> The conservative right-wing part?</p>
<p><strong>AS:</strong> Yes. As opposed to just trying to cover the field as a whole. </p>
<p><strong>MG:</strong> Do you think it’s harder to get reform these days? As part of the Howard advisory team you were at the centre of the tax debate. Are things more difficult now?</p>
<p><strong>AS:</strong> Often we seem to act as if things are more difficult now and yet I just think if people are prepared to stand up on something and explain it and indicate clearly why people will benefit from something I still think it’s possible to get things through. But we seem to have somehow spooked ourselves overall that somehow the more difficult reforms are not possible these days. I think reform is still possible but it requires a lot of work and because there are many more outlets and many more bases to cover and more stakeholders to consider - and stakeholders who have their own capacity to do research and whatever - that does require a lot of groundwork to be done. Part of the reason the tax reform got through in 1998 was that there had been a whole year of actually putting the thing together and then a commitment at the political level to not only work out the technical arguments, but to try and anticipate the political arguments and have responses to them so that when we were ready to go on that GST reform we thought we had, in terms of the arguments, every base covered.</p>
<p><strong>MG:</strong> The Coalition’s obviously riding high at the moment, but do you think it needs to do more to build resilience for the long term? That is, for the next election, and what should it be doing?</p>
<p><strong>AS:</strong> The impression I get from what the Prime Minister has said particularly in the party room is that he knows that while we’re doing well at the moment relative to Labor, that Labor are not going to lie on the mat forever. There’s just this dynamic in politics that the pendulum swings one way and then it swings back. And so I think he’s very conscious of building resilience, and I think the way he’s doing that first of all is by trying to be stable and certain when it comes to policy. I think he’s sending out very clear signals as to what his priorities are, particularly in terms of who he’s working for. And also I think in terms of the economy he’s indicating that while we’ve put certain measures in place to help get the economy through the current softness that we’re experiencing, they’re prepared to contemplate further measures. For example, in the budget next year an investment allowance has been raised.</p>
<p><strong>MG:</strong> The government’s been surprisingly aggressive I think towards big business at the moment - criticising it for social activism and for not being supportive enough of government policies. Do you think this is a sound strategy or will it just alienate the business sector, and what’s driving it?</p>
<p><strong>AS:</strong> I think what needs to happen is business needs to sit down with the government and work out in terms of where the government is going, the government’s reform priorities, the sort of areas that need to be addressed. In terms of how to explain things to people, how it’s best to do that. I think what Ben Morton and others were saying is that every day as politicians we’re out there trying to persuade the “quiet Australians” to do things they might not necessarily immediately see in their interest. We want business and others to understand the challenge of that and not leave that just for us but to work as partners in that process. And business is vital to the Australian economy. Big business, small business. No one denies that. The question is how we work together to get the sort of outcomes that everybody wants.</p>
<p><strong>MG:</strong> You speak of Ben Morton’s speech and he’s assistant minister to the prime minister and he’s part of Scott Morrison’s inner circle. So this has the Prime Minister’s imprimatur, but it’s almost as though he was thinking that big business should be an extension of the government. That’s not how things work these days. </p>
<p><strong>AS:</strong> Now I think what he was saying is that, look we have certain objectives as a government. When you are dealing with government, please address those objectives when you’re asking for things from government. And I’ve often said this to people who are asking things and come to Canberra looking for things. Always understand who you’re dealing with, always adopt the language of the government of the day, understand where they’re coming from, and pitch yourself accordingly. And I think Ben is essentially saying that, and by putting it out in those stark terms, I think what he’s doing is saying look there’s a bit of a line in the sand here, we’ve all got to get on with this now, and please come to the table and contemplate what we’re saying and why we’re saying it. Please listen.</p>
<p><strong>MG:</strong> The government’s bringing in its so-called “big stick” legislation this week which would allow at the extreme for the divestment of parts of companies in the case of energy companies that weren’t playing ball. What happened to dry economics in the Liberal Party?</p>
<p><strong>AS:</strong> Well I’ve never had the same reaction as some people to say divestment is not something that should ever be considered by the Coalition. It was a feature or has been a feature of the US anti-trust regime for decades and decades. So in the land of the free and the home of the brave, it’s been a feature of the landscape for a long time. So it’s not inconsistent with free market economics. It’s something that deals with areas where there’s excessive concentration and where firms are therefore able to exert market power and do things which frustrate, if you like, the more competitive operation of markets. So I think it has to be seen in that context. The other thing is, to some extent we’ve been driven to take those, what are perceived as extreme measures because there is such a mess in the energy sector and we need to find a way through in terms of making sure that when we take measures to reduce the cost of electricity those measures flow through to consumers and that companies with market power do not take some of those savings for themselves.</p>
<p><strong>MG:</strong> But of course you could have got out to this mess by endorsing the NEG.</p>
<p><strong>AS:</strong> Well look this is like the Irish question. You wouldn’t start from here but here is where we are, and we’ve ended up in a particular situation and we’re trying to work our way through. And what I think Angus Taylor’s tried to do since the election is essentially find ways. And now he’s doing, as I understand it, more talks with the states around how do we facilitate the transition in the energy sector and how do we create a bit more certainty around power supplies and all the rest of it. And I think that’s going to be important to providing a bit of investment certainty and help underpin lower prices.</p>
<p><strong>MG:</strong> Don’t you think that if Bob Hawke [had] brought in the big stick legislation, John Howard would have cried “the socialists are here”?</p>
<p><strong>AS:</strong> Well it depends on the context at the time and I think the context we’re in now has led as I say to these sorts of measures being undertaken.</p>
<p><strong>MG:</strong> On another issue of the day, Gladys Liu has obviously still a lot of questions to answer. Shouldn’t she just call a press conference and answer them?</p>
<p><strong>AS:</strong> As I understand, what’s happening is she is going through her history of donations and getting her information in order. I think she’s trying to sort of make sure that she’s got her memory intact, as it were. And then I’m sure she will as necessary provide further information. She has come under a lot of pressure very early on in her career and even seasoned politicians under the microscope of someone like an Andrew Bolt probably would have had problems. But I think she’ll be able to explain all of this. And certainly I think the treasurer, the prime minister, the minister for home affairs, standing by her is a clear indication that they are confident that there is nothing there that would suggest that she’s somehow been compromised.</p>
<p><strong>MG:</strong> How serious do you think this issue of Chinese interference in Australian politics is? We’ve heard for example from Andrew Hastie saying people often underestimate the broad threat of China. We heard from Duncan Lewis, the outgoing head of ASIO, when he said this is a real problem. He didn’t mention the Chinese of course, diplomatically, but we all know what he was talking about.</p>
<p><strong>AS:</strong> There’s no doubt that there is foreign interference going on and there’s no doubt that the security agencies are reporting to government about the extent of that interference. Certainly in the cyber space, there’s a lot of activity going on and it’s not just from one country. It’s from a number of countries and non-state actors as well. So that is the fact. The challenge for us as a country is, how do we accommodate the rise of China within our region while maintaining some sort of global rules based order? And that requires us to work with the Americans in terms of our traditional alliance relationship to ensure they have a presence in the area. It means encouraging all sides of the debate to come back to the table to a global rules based order as a way of resolving disputes. We don’t want China to fail - a failing China or a stumbling China is a bigger problem than a prosperous and successful China that is taking its place rightfully within the Asia Pacific. But we have these teething problems because they’re the rising power. The Americans, particularly since the 1990s have been seen as the hyper power and they’re having to accommodate the rise of China. And we just have to stand up in the areas where we feel there is overreach, whether they are strategic areas or technological areas. But what we’ve got to do is not throw the baby out with the bathwater. We’ve got a strong relationship with the Chinese. We have a big Chinese community in Australia. We mustn’t make them feel at any stage that they are somehow viewed as a fifth column or whatever. It’s important for us to maintain the relationship and develop it while also at the same time seeking to do what we can to diversify our trading opportunities in the region and our strategic options. </p>
<p><strong>MG:</strong> There are a lot of problems though at the micro level, if you like to put it like that. For example are our universities becoming too dependent on Chinese students?</p>
<p><strong>AS:</strong> Well I think that the universities do have to look at how dependent they are on international education, and certainly the incentives provided by governments over a long period in the way we’ve operated have certainly encouraged that dependence as well. But I think the universities understand that they can’t be too dependent on just one source of international students and I think they’re taking action to diversify. And certainly that should be encouraged.</p>
<p><strong>MG:</strong> Now I want to turn to the United States, to your future.</p>
<p><strong>AS:</strong> Yes. </p>
<p><strong>MG:</strong> Scott Morrison will be in Washington at the end of this week. He gets on very well with the president. But are there any risks for Australia in this closeness?</p>
<p><strong>AS:</strong> Well I think there are no risks as long as we are always very clear about the fact that while our interests are very close they’re not completely identical, given where we are in the Asia Pacific. And we have to keep explaining to our friends and allies what our national interest is. And our interest is, as I said before, in how we accommodate the rise of China in a way which maintains or seeks to restore as far as possible a global rules-based order.</p>
<p><strong>MG:</strong> We’ve signed up to the Middle East operation to protect sea lanes. Are there dangers here though? Firstly we see the situation in the Middle East turning even nastier than previously. And secondly does our involvement compromise the Australian government’s efforts on behalf of Australian citizens who are held in Iran?</p>
<p><strong>AS:</strong> Well it may be a hard thing to say but foreign policy can never be hostage just to the fear that your people may be taken hostage or there will be attacks on your soil. As we saw with 9/11. Your foreign policy can’t be hostage to those considerations. It has to be a foreign policy in your interest and certainly it’s in our national interest for these seaways and laneways to be as open as possible and that’s a principle we’re prepared to stand up for and that’s what we’ve done with the Straits of Hormuz. And it’s true, the Middle East situation is always fragile and as we can see from recent events with the drone attack on the Saudi oilfields, it’s always subject to potential escalation. But precisely because it’s such a strategic part of the world and there’s such strategic significance, us doing things and standing up for principles like freedom of navigation is very important.</p>
<p><strong>MG:</strong> Can I ask you finally about how you’ll approach the job of ambassador, which is a hard one in a place like Washington where you have to be across a whole lot of stakeholders and power is more diffused and so on. Joe Hockey engaged in golf diplomacy, including with the president. I don’t think you play golf?</p>
<p><strong>AS:</strong> I’m not much of a golfer but I used to play. I’m a bad golfer and maybe that’s a good thing.</p>
<p><strong>MG:</strong> Are you taking any lessons?</p>
<p><strong>AS:</strong> No.</p>
<p><strong>MG:</strong> But if golf’s not your go, what will be your way of operating?</p>
<p><strong>AS:</strong> I think the most important thing is to establish personal relationships, whether it’s with the relevant people in the administration or in the congress. Understanding what our national interest is and what we’re actually seeking to pursue there. Identifying some priority areas to pursue. Some of those will come out of the state visit to the US that the Prime Minister’s undertaking now. There’s talk about rare earth minerals, for example, they’re critical minerals. There’s talk around what we do further in space. I’m interested in the whole science and innovation space and what we can do more there. I think the infrastructure space, there’s a lot we can help each other with.
So I’m happy to identify those priorities as well as the more broader issue which is the traditional diplomatic function of representing our interests in the US. And so I’ll go wherever is required, do whatever is required to do that. But everyone does this in their own way. So I think Joe’s done a great job and I have to sort of work out my modus operandi essentially when I get there I think.</p>
<p><strong>MG:</strong> Well you’ll be going into an election year so that’s quite difficult. How do you balance your contacts with the incumbent team and the challenging team?</p>
<p><strong>AS:</strong> Look I think people in the administration would understand that being an election year you do want to have contact with the other side. I mean one of the things that Joe has done is maintain fruitful contacts with both sides of politics because apart from anything else they’re both represented in congress.</p>
<p><strong>MG:</strong> And he said that one of the ways he got in early with the Trump administration was that he reached out to that team during the campaign.</p>
<p><strong>AS:</strong> Yes that’s correct.</p>
<p><strong>MG:</strong> Is that a proper way of operating?</p>
<p><strong>AS:</strong> Well during election years often ambassadors will be observers at the conventions and they’ll get to meet people from both sides, and I think that’s important because as I say ultimately both sides are also in the congress and that’s where a lot of legislation affecting Australia gets done.</p>
<p><strong>MG:</strong> And you’ll be doing it too? </p>
<p><strong>AS:</strong> Yes.</p>
<p><strong>MG:</strong> And do you go to America with some network already in place of contacts from from your previous lives?</p>
<p><strong>AS:</strong> Well I’ve been there through the Clinton era and through the George W. Bush era. There’ll be some contacts still there but there’s probably quite a few that I’ll have to now sort of restart or start anew.</p>
<p><strong>MG:</strong> Well as Malcolm Turnbull might have said, it’s a most exciting time to be there.</p>
<p><strong>MG:</strong> Thank you very much Arthur Sinodinos. All the best for your new life and your new career. </p>
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<h2>Additional audio</h2>
<p><a href="http://freemusicarchive.org/music/Lee_Rosevere/The_Big_Loop_-_FML_original_podcast_score/Lee_Rosevere_-_The_Big_Loop_-_FML_original_podcast_score_-_10_A_List_of_Ways_to_Die">A List of Ways to Die</a>, Lee Rosevere, from Free Music Archive.</p>
<p><strong>Image:</strong></p>
<p>AAP/ Mick Tsikas</p><img src="https://counter.theconversation.com/content/123596/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>As Arthur Sinodinos prepares to leave the Senate for his new role as Australian ambassador to the US, he sits with Michelle Grattan to reflect on his time in politics.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1157952019-04-21T10:07:45Z2019-04-21T10:07:45ZView from The Hill: Malcolm Turnbull’s home truths on the NEG help Labor in the climate wars<p>An Easter weekend in an election campaign might be a bit of a challenge for a pair of leaders who were atheists. But fortunately for Scott Morrison and Bill Shorten, declared believers, it wasn’t a problem.</p>
<p>Both attended church services during the so-called campaign cease-fire that the main parties had proclaimed for two of the four days.</p>
<p>Morrison on Sunday was pictured in full voice with raised arm at his Horizon Pentacostal church in The Shire, where the media were invited in. On Friday he’d been at a Maronite Catholic service in Sydney.</p>
<p>Sunday morning saw Shorten at an Anglican service in Brisbane, his family including mother-in-law Quentin Bryce, former governor-general.</p>
<p>Neither leader was hiding his light under a bushel.</p>
<h2>Church, chocolate and penalty rates</h2>
<p>Sunday was an opportunity to wheel out the kids, chasing Easter eggs (Shorten) or on the Rock Star ride at Sydney’s Royal Easter Show (Morrison). This was campaigning when you’re not (exactly) campaigning.</p>
<p>The minor players weren’t into the pretend game. For them, the relative restraint on the part of the majors presented rare opportunity. Usually Centre Alliance senator Rex Patrick would have little chance of being the feature interview on the ABC’s Insiders.</p>
<p>But while Friday and Sunday were lay days for the major parties Saturday was not (and Monday won’t be either).</p>
<p>For Labor, Easter has meshed nicely with one of the key planks of its wages policy - restoration of penalty rate cuts by the Fair Work Commission. Even on Sunday, Shorten pointedly thanked “everyone who’s working this weekend”.</p>
<p>It was the start of Labor’s campaign focus turning from health to wages this week, when it will cast the election as a “referendum on wages”.</p>
<h2>Turnbull resurrects the NEG</h2>
<p>The weekend standout, however, was the intervention of Malcolm Turnbull, who launched <a href="https://twitter.com/TurnbullMalcolm/status/1119468310473560064">a series of pointed tweets</a> about the National Energy Guarantee (NEG).</p>
<p>Turnbull was set off by a reference from journalist David Speers to “Malcolm Turnbull’s NEG”.</p>
<p>“In fact the NEG had the support of the entire Cabinet, including and especially the current PM and Treasurer. It was approved by the Party Room on several occasions”, the former prime minister tweeted.</p>
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<p>“It had the support of the business community and energy sector in a way that no previous energy policy had. However a right wing minority in the Party Room refused to accept the majority position and threatened to cross the floor and defeat their own government”.</p>
<p>“That is the only reason it has been abandoned by the Government. The consequence is no integration of energy and climate policy, uncertainty continues to discourage investment with the consequence, as I have often warned, of both higher emissions and higher electricity prices.”</p>
<p>He wasn’t finished.</p>
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<a href="https://images.theconversation.com/files/270212/original/file-20190421-28100-18q9ud3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/270212/original/file-20190421-28100-18q9ud3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/270212/original/file-20190421-28100-18q9ud3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=162&fit=crop&dpr=1 600w, https://images.theconversation.com/files/270212/original/file-20190421-28100-18q9ud3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=162&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/270212/original/file-20190421-28100-18q9ud3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=162&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/270212/original/file-20190421-28100-18q9ud3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=204&fit=crop&dpr=1 754w, https://images.theconversation.com/files/270212/original/file-20190421-28100-18q9ud3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=204&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/270212/original/file-20190421-28100-18q9ud3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=204&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<p>“And before anyone suggests the previous tweet is some kind of revelation - all of the economic ministers, including myself, @ScottMorrisonMP, @JoshFrydenberg spent months arguing for the NEG on the basis that it would reduce electricity prices and enable us to lower our emissions.”</p>
<p>And then: </p>
<p>“I see the @australian has already described the tweets above as attacking the Coalition. That’s rubbish. I am simply stating the truth: the NEG was designed & demonstrated to reduce electricity prices. So dumping it means prices will be higher than if it had been retained. QED”</p>
<p>“The @australian claims I ‘dropped the NEG’. False. When it was clear a number of LNP MPs were going to cross the floor the Cabinet resolved to not present the Bill at that time but maintain the policy as @ScottMorrisonMP, @JoshFrydenberg& I confirmed on 20 August.”</p>
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<a href="https://images.theconversation.com/files/270210/original/file-20190421-28090-1oyryg1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/270210/original/file-20190421-28090-1oyryg1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/270210/original/file-20190421-28090-1oyryg1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=143&fit=crop&dpr=1 600w, https://images.theconversation.com/files/270210/original/file-20190421-28090-1oyryg1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=143&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/270210/original/file-20190421-28090-1oyryg1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=143&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/270210/original/file-20190421-28090-1oyryg1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=180&fit=crop&dpr=1 754w, https://images.theconversation.com/files/270210/original/file-20190421-28090-1oyryg1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=180&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/270210/original/file-20190421-28090-1oyryg1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=180&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<p>(Frydenberg, incidentally, has lost out every which way on the NEG. As energy minister he tried his hardest to get it up, only to see it fall over. Now he is subject to a big campaign against him in Kooyong on climate change, including from high-profile candidates and GetUp.)</p>
<p>Turnbull might justify the intervention as just reminding people of the history. But it is damaging for the government and an Easter gift for Labor – which is under pressure over how much its ambitious emissions reduction policy would cost the economy. It also feeds into Labor’s constant referencing of the coup against Turnbull.</p>
<p>Turnbull’s Easter tweets are a reminder</p>
<ul>
<li><p>the Coalition sacrificed a coherent policy on energy and climate for a hotchpotch with adverse consequences for prices;</p></li>
<li><p>it dumped that policy simply because of internal bloodymindedness, and</p></li>
<li><p>the now-PM and treasurer were backers of the NEG, which had wide support from business.</p></li>
</ul>
<p>Shorten has strengthened his commitment on the NEG, indicating on Saturday he’d pursue it in government even without bipartisan support.</p>
<p>“We’ll use some of the Turnbull, Morrison, Frydenberg architecture, and we will work with that structure,” he said.</p>
<p>Given the hole it has left in the government’s energy policy, pressing Morrison on the economic cost of walking away from the NEG is as legitimate as asking Shorten about the economic impact of his policy.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/video-michelle-grattan-on-the-starting-line-of-the-2019-election-campaign-115365">VIDEO: Michelle Grattan on the starting line of the 2019 election campaign</a>
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</p>
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<img src="https://counter.theconversation.com/content/115795/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 major party’s Easter ceasefire allowed Malcolm Turnbull to resurrect the National Energy Guarantee.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1082002018-12-04T11:46:39Z2018-12-04T11:46:39ZView from The Hill: Malcolm Turnbull and his NEG continue to haunt the government<figure><img src="https://images.theconversation.com/files/248700/original/file-20181204-34148-17lkcuy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The former PM via twitter effectively inserted himself into Question Time - in real time.</span> <span class="attribution"><span class="source">Dan Himbrechts/AAP</span></span></figcaption></figure><p>If anyone needs further evidence of the self-defeating weird places
the Liberals seem to find themselves in, consider what happened on
Tuesday.</p>
<p>Malcolm Turnbull made another intervention in the political debate,
this time talking about the National Energy Guarantee, when he spoke
at an energy conference on Tuesday morning.</p>
<p>“I’ve strongly encouraged my colleagues to work together to revive the
National Energy Guarantee. It was a vital piece of economic policy and
had strong support, and none stronger I might say, than that of the
current Prime Minister and the current Treasurer,” he said.</p>
<p>This and the rest of Turnbull’s observations on energy policy provided
abundant material for a question time attack by a Labor party bloated
from dining on the unending manna that’s been flowing its way from
some political heaven.</p>
<p>As Scott Morrison sought to counter this latest attack by concentrating on
Labor’s substantial emissions reduction target (45% on 2005 levels by
2030), suddenly a <a href="https://twitter.com/TurnbullMalcolm/status/1069790507167969280">tweet</a> appeared from Turnbull.</p>
<p>“I have not endorsed "Labor’s energy policy”. They have adopted the
NEG mechanism,“ Turnbull said - adding a tick of approval - "but have
not demonstrated that their 45% emissions reduction target will not
push up prices. I encouraged all parties to stick with Coalition’s NEG
which retains wide community support.”</p>
<p>Here was the former PM effectively inserting himself into Question
Time - in real time.</p>
<p>Morrison quickly quoted from the tweet, but it couldn’t repair the
damage done by Turnbull’s earlier comments.</p>
<p>All round, it was another difficult day for the government on the energy front.</p>
<p>The Coalition parties meeting discussed its controversial plan
providing for divestiture when energy companies misuse market power,
with conduct that is “fraudulent, dishonest or in bad faith” in the wholesale market.</p>
<p>The government has put more constraints on its plan than originally
envisaged. Notably, rather than a divestiture decision resting with
the treasurer, it would lie with the federal court (although precisely what this would mean is somewhat unclear).</p>
<p>Treasurer Josh Frydenberg told a news conference: “This power will be on the advice
of the ACCC [the Australian Competition and Consumer Commission] to
the Treasurer, and then the Treasurer will make a referral to the
Federal Court. The Federal Court will then be empowered to make that
judicial order.”</p>
<p>There had already been backbench criticisms of the divestiture proposal expressed to Frydenberg last week; the changes dealt with some of these.</p>
<p>But the plan is still leaving some in Coalition ranks uneasy.</p>
<p>According to the official government version, in the party room 18
speakers had a say, with 14 supporting (though a couple of them were
concerned about the interventionism involved) and four expressing
varying degrees of reservation. No one threatened to cross the floor.</p>
<p>Backbench sources said the strongest critics were Jason Falinski,
Russell Broadbent, Tim Wilson and former deputy Liberal leader Julie Bishop,
while milder criticisms came from Craig Laundy, Scott Ryan and Jane
Prentice.</p>
<p>There were two main worries about the measure – the potential negative
impact on business investment and its inconsistency with Liberal party
free market principles.</p>
<p>Bishop - who, it might be recalled, was recently saying there should
be a bipartisan deal with Labor on the NEG - highlighted the
investment implications and the issue of sovereign risk.</p>
<p>She said: “This is not orthodox Liberal policy. We need to do more
consultation with the industry and we need to be cautious of
unintended consequences of forced divestiture”.</p>
<p>Addressing the concerns, Morrison told the party room that a variety
of principles were at play.</p>
<p>The energy sector was not “a free market nirvana” but rather “a
bastardised market,” he said. The law was targeted at situations where
sweetheart deals came at the expense of consumers.</p>
<p>Energy minister Angus Taylor said governments of the centre-right,
including the Menzies and the Thatcher governments, had acted to
ensure markets operated for consumers.</p>
<p>Taylor invoked an example of the beer drinkers against the brewers,
when Thatcher had been on the side of the beers drinkers.</p>
<p>Frydenberg produced a quote from Menzies’ “Forgotten People”
broadcasts about the need to balance the requirements of industry with
social responsibilities.</p>
<p>The legislation, which is opposed by Labor even with the changes, is
being introduced this week. But there is no guarantee that it can be
passed by the time of the election – not least because there are so
few sitting days next year.</p>
<p>So the most controversial part of the government’s “big stick”, which
has caused so much angst with business, may never become a reality.</p><img src="https://counter.theconversation.com/content/108200/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>This and Turnbull’s observations on energy policy provided abundant material for a question time attack by Labor bloated from dining on the unending manna that’s been flowing from political heaven.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1075652018-11-26T01:32:09Z2018-11-26T01:32:09ZLabor’s policy can smooth the energy transition, but much more will be needed to tackle emissions<p>The Labor party’s energy policy platform, <a href="http://www.billshorten.com.au/_labor_s_plan_for_more_renewable_energy_and_cheaper_power_thursday_22_november_2018">released last week</a>, is politically clever and would likely be effective. It includes plans to underwrite renewable energy and storage, and other elements that would help the energy transition along. Its approach to the transition away from coal-fired power is likely to need more work, and it will need to be accompanied by good policy in other sectors of the economy where greenhouse emissions are still climbing.</p>
<p>The politics is quite simple for Labor: support the transition to renewable electricity which is already underway and which <a href="https://theconversation.com/lowy-institute-poll-shows-australians-support-for-climate-action-at-its-highest-level-in-a-decade-98625">a large majority of Australians support</a>, and minimise the risk that its proposed policy instruments will come under effective attack in the lead-up to the 2019 election. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/grattan-on-friday-labors-energy-policy-is-savvy-now-is-it-scare-proof-107451">Grattan on Friday: Labor's energy policy is savvy – now is it scare-proof?</a>
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<p>By aiming for 50% renewables at 2030, the party has claimed the high ground. That goal and perhaps a lot more is achievable, given that the large <a href="http://www.cleanenergyregulator.gov.au/RET/About-the-Renewable-Energy-Target/Large-scale-Renewable-Energy-Target-market-data#supply">investment pipeline</a> in electricity consists almost entirely of wind and solar projects, and that new renewables are now <a href="https://reneweconomy.com.au/unsubsidised-wind-and-solar-now-cheapest-form-of-bulk-energy-96453/">typically the cheapest options to produce energy with new plants</a>.</p>
<p>The question then is what policy instruments Labor would use to facilitate the transition from coal to renewables. </p>
<h1>NEG games</h1>
<p>The government’s <a href="https://theconversation.com/turnbull-dumps-emissions-legislation-to-stop-rebels-crossing-the-floor-101754">abandoned National Energy Guarantee (NEG) policy</a> is now a political asset for Labor. If the Coalition were to support it under a Labor government, the policy would effectively be immune to political attack. If the Coalition were to block it, Labor could blame many future problems in electricity on the Coalition’s refusal to endorse a policy that it originally devised.</p>
<p>The NEG has many warts. Some of the compromises in its design were necessary to get it through the Coalition party room. That no longer matters, and so it should be possible to make improvements. One such improvement would be to allow for an explicit carbon price in electricity under the NEG, by creating an emissions intensity obligation for electricity generators with traded certificates. This is better than the opaque model of contract obligations on electricity retailers under the original version.</p>
<h2>Underwriting renewables</h2>
<p>But the real action under a Labor government might well come from a more direct policy approach to push the deployment of renewables. In his <a href="http://www.billshorten.com.au/australia_s_energy_future_sydney_thursday_22_november_2018">energy policy speech</a> last week, Shorten foreshadowed that Labor would “invest in projects and underwrite contracts for clean power generation, as well as firming technologies like storage and gas”. </p>
<p>As interventionist as this sounds, it has some clear advantages over more indirect support mechanisms. First, it brings the costs of new projects down further by making cheap finance available – a tried and tested method in state-based renewables schemes. Second, it allows for a more targeted approach, supporting renewable energy generation where it makes most sense given demand and transmission lines, and prioritising storage where and when it is needed. Third, it channels government support only to new installations, rather than giving free money to wind farms and solar plants that are already in operation.</p>
<h2>Managing coal exit</h2>
<p>Where renewables rise, coal will fall. Labor’s approach to this issue centres on the affected workers and communities. A “just transition authority” would be created as a statutory authority, to administer redundancies, worker training, and economic diversification. </p>
<p>This is a good approach if it can work effectively and efficiently. But it may not be enough to manage the large and potentially rapid shifts in Australia’s power sector.</p>
<p>Contract prices for new wind farms and solar plants now are <a href="https://reneweconomy.com.au/origin-says-solar-cheaper-than-coal-moving-on-from-base-load-70999/">similar to or lower than the operating costs of many existing coal plants</a>. The economics of existing coal plants are deteriorating, and many of Australia’s ageing coal power plants may shut down sooner than anticipated. </p>
<p>All that Labor’s policy says on the issue is that all large power plants would be required to provide three years’ notice of closure, as the <a href="https://theconversation.com/the-finkel-review-finally-a-sensible-and-solid-footing-for-the-electricity-sector-79118">Finkel Review recommended</a>. But in practice this is unlikely to work. </p>
<p>Without any guiding framework, coal power plants could close very suddenly. If a major piece of equipment fails and repair is uneconomic, then the plant is out, and operators may find it opportune to run the plant right until that point. It’s like driving an old car – it runs sort of OK until the gearbox goes, and it’s off to the wreckers right then. It is unclear how a three-year rule could be enforced. </p>
<p>This is effectively what happened with the Hazelwood plant in Victoria. That closure caused a temporary rise in wholesale power prices, as new supply capacity gradually fills the gap.</p>
<p>One way to deal with this would be to draw up and implement some form of specific exit timetable for coal power plants. This would give notice to local communities, provide time to prepare investment in alternative economic activities, and allow replacement generation capacity to be brought online. Such a timetable would need a mechanism to implement it, probably a system of carrots and sticks. </p>
<h2>Batteries, energy efficiency and the CEFC</h2>
<p>Most public attention was given to a relatively small part of Labor’s energy policy platform: the promise to <a href="https://theconversation.com/households-to-get-2000-subsidy-for-batteries-under-shorten-energy-policy-107417">subsidise home batteries</a>. Batteries can help reduce peak demand, and cut electricity bills for those who also have solar panels. But it is not clear whether home batteries are good value for money in the system overall. And the program would tend to benefit mostly upper middle-income earners.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/labors-battery-plan-good-policy-or-just-good-politics-107434">Labor's battery plan – good policy, or just good politics?</a>
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<p>Labor’s platform also foreshadows a renewed emphasis on energy efficiency, which is economically sensible.</p>
<p>Finally, Labor promises to double the Clean Energy Finance Corporation’s endowment with another A$10 billion, to be used for revolving loans. The CEFC is already the world’s biggest “green bank”, co-financing projects that cut emissions and deliver financial returns. Another A$5 billion is promised as a fund for upgrading transmission and distribution infrastructure. These are big numbers, and justifiably so - building our future energy system will need massive investments, and some of these will be best made by government. </p>
<h2>Big plans for electricity, but what about the rest?</h2>
<p>Overall, Labor’s plan is a solid blueprint to support the electricity transition, with strong ambition made possible by the tremendous technological developments of recent years. </p>
<p>But really it is only the start. Electricity accounts for one-third of national greenhouse emissions. Emissions from the power sector will continue to fall, but emissions from other sectors have been rising. That poses a huge challenge for the economy-wide emissions reductions that are needed not only to achieve the 2030 emissions targets, but the much deeper reductions needed in coming decades.</p>
<p>A national low-carbon strategy will need to look at how to get industry to shift to zero-emission electricity, how to convert road transport to electricity or hydrogen, and how to tackle the difficult question of agricultural emissions. More pre-election announcements are to come. It will be interesting to see how far Labor will be willing to go in the direction of putting a price on carbon, which remains the economically sensible but most politically charged policy option. </p>
<p>As difficult as electricity policy may seem based on the tumultuous politics that have surrounded it, more seismic shifts are waiting in the wings.</p><img src="https://counter.theconversation.com/content/107565/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Frank Jotzo leads research projects on energy and climate policy. There are no conflicts of interest regarding this article arising from any funding received or any of the author's affiliations. </span></em></p>The Labor Party’s newly announced energy policy could finally set Australia’s electricity sector on the path to a renewables-driven future. But policies are still needed to cut emissions elsewhere.Frank Jotzo, Director, Centre for Climate Economics and Policy, Crawford School of Public Policy, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1075832018-11-25T13:19:25Z2018-11-25T13:19:25ZView from The Hill: Labor’s 55-45% Newspoll lead adds to Liberals’ weekend of woe<p>Labor has maintained a 55-45% two-party lead in the latest <a href="https://www.theaustralian.com.au/opinion/columnists/newspoll-coalition-slides-but-scott-morrison-gains-popularity/news-story/1972b14dd892a090650e94f93d38fc02">Newspoll</a>,
in a weekend of woe for the Morrison government, which is trying to
play down the federal contribution to the Victorian Liberal wipeout.</p>
<p>The Coalition’s primary vote fell for the third consecutive
time, to 34%, in a poll that if replicated at an election would see a loss of 21 seats. Labor’s primary vote remained at 40%. One Nation rose 2
points to 8%; the Greens were steady on 9%.</p>
<p>Scott Morrison boosted his lead over Bill Shorten as better PM to 12
points, leading 46-34% compared with 42-36% a fortnight ago. Morrison
has a net positive satisfaction rating of plus one, improving from
minus 8 in the last poll.</p>
<p>The poll will reinforce Coalition gloom after Saturday’s Victorian
election which saw a swing to the Labor government estimated by ABC
election expert Antony Green at around 4% in two-party terms. While an
ALP win was expected, the stunning size of it came as a surprise.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/labor-has-landslide-win-in-victoria-107514">Labor has landslide win in Victoria</a>
</strong>
</em>
</p>
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<p>Even assuming the Victoria election was mainly won (or lost) on state
issues, there are clearly federal factors and lessons in this smashing
of the Liberals, which if translated federally would potentially put at risk half a dozen Victorian seats.</p>
<p>As Premier Daniel Andrews said, Victoria is a “progressive” state. It
stands to reason that Liberal infighting and the dumping of Malcolm
Turnbull, the trashing of the National Energy Guarantee and the
talking down of renewables, and the broad rightward lean of the
federal Coalition alienated many middle-of-the-road Liberal voters.</p>
<p>The anecdotal evidence backs the conclusion that Victorians were
sending strong messages to the Liberal party generally, including the
federal party.</p>
<p>But are the federal Liberals willing to hear those message? And anyway,
does Morrison have the capacity to respond to them effectively?</p>
<p>Morrison has so far demonstrated no personal vision for the country,
and his play-for-the-moment tactics are being increasingly seen as
unconvincing.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/victorian-labors-thumping-win-reveals-how-out-of-step-with-voters-liberals-have-become-105574">Victorian Labor's thumping win reveals how out of step with voters Liberals have become</a>
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<p>Morrison took the unusual course of not saying anything about Victoria
on Saturday night or Sunday. He will meet the Victorian federal
Liberals on Monday to discuss the outcome.</p>
<p>Ahead of that meeting Treasurer Josh Frydenberg - who is from Victoria and is deputy Liberal leader - played down the federal implications. While conceding “the noise from Canberra certainly didn’t help”, he claimed in an ABC Sunday night interview that the lessons to be learned federally were about grassroots campaigning and the need to rebut “Labor lies”. He would not concede a recalibration of policy was needed.</p>
<p>Some in the right will try to write Victoria off as unrepresentative
of the nation, just as they did Wentworth. This flies in the face of
reality – there were big swings in the eastern suburbs and the sandbelt,
the sort of areas the Liberals would expect to be their middle class strongholds.</p>
<p>The government needs to pitch much more to the centre in policy terms
but it will be hard to do so.</p>
<p>Given its current positioning, how could it sound moderate on energy
and climate policy? It can’t go back to the NEG. It is stuck with its
obsessions about coal and its distrust of, or at least equivocation
about, renewables, as well as its business-bashing threat of
divestitures.</p>
<p>On issues such as coal and climate change, the party’s eyes have been
turned obsessively to Queensland, where there is a raft of marginal
seats, without sufficient regard to those in Victoria and NSW. Even in
relation to Queensland, there has been a failure to adequately
recognise that that state is not monolithic when it comes to issues
and priorities.</p>
<p>The right is unlikely to stop its determined effort to take over the
party, whatever the cost. Indeed some on the right will argue that the Morrison strategy should be to sharpen the policy differences further, rather than looking to the centre.</p>
<p>The right’s mood will be darkened by the Saturday dumping of rightwing senator Jim Molan to an unwinnable position on the NSW Liberal ticket. Molan has <a href="https://www.abc.net.au/news/2018-11-25/jim-molan-says-he-cannot-defend-party-on-television/10552708">pulled</a> out from Monday’s Q&A program; the ABC tweeted that he’d said he could “no longer defend the Liberals”.</p>
<p>As if the Victorian result was not sobering enough, the government
this week begins the final fortnight of parliament for the year in minority
government, with independent Kerryn Phelps sworn in on Monday as
Turnbull’s replacement in Wentworth.</p>
<p>The government wants the focus on national security legislation but
other issues will be political irritants for it.</p>
<p>Labor and crossbenchers are pushing the case for a federal
anti-corruption body - the sort of initiative that would appeal to
voters highly distrustful of politicians.</p>
<p>Crossbenchers Cathy McGowan and Rebekha Sharkie will introduce a
private member’s bill. 34 former judges have signed an <a href="https://nb.tai.org.au/integrityopenletter">open letter</a>
advertisement calling for a national integrity commission.</p>
<p>They said: “Existing federal integrity agencies lack the necessary
jurisdiction, powers and know-how to investigate properly the
impartiality and bona fides of decisions made by, and
conduct of, the federal government and public sector.”</p>
<p>The government is resisting a new body but will need some convincing
alternative response.</p>
<p>The government will also be under pressure over Morrison’s pledge to
legislate to remove the opportunity for religious schools to
discriminate against gay students. Negotiations with the opposition
have been at an impasse, although the government says it still wants
legislation through this fortnight.</p>
<p>In the middle of the fortnight Morrison attends the G20, where he is
expected to have a meeting with Donald Trump. One would assume they
will canvass the Australian government’s consideration of moving our
embassy to Jerusalem, with Trump urging Morrison to go ahead with
the controversial move.</p><img src="https://counter.theconversation.com/content/107583/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 federal Coalition’s primary vote fell for the third consecutive time, to 34%, in a poll that if replicated at an election would cost 21 seats.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1075032018-11-23T00:37:39Z2018-11-23T00:37:39ZVIDEO: Michelle Grattan on Labor’s energy plan, and the government’s anti-terrorism measures<figure>
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<p>Michelle Grattan speaks with University of Canberra Vice-Chancellor Deep Saini about the week in Australian politics. They discuss Labor unveiling it’s energy plan, Minister for Women Kelly O’Dwyer’s announcement of the women’s economic statement, the government’s anti-terrorism measures, and what to expect in Parliament’s final sitting fortnight of the year.</p><img src="https://counter.theconversation.com/content/107503/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>Michelle Grattan speaks with Deep Saini about the week in Australian politics.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1074512018-11-22T10:27:56Z2018-11-22T10:27:56ZGrattan on Friday: Labor’s energy policy is savvy – now is it scare-proof?<p>Hours before Bill Shorten delivered his energy policy on Thursday,
Scott Morrison’s office had circulated an attack.</p>
<p>Labor’s plan was for a “carbon tax”; the proposed subsidy for “pink
batteries” would leave households “$8000 out of pocket”.</p>
<p>It was a wild broadside that said much about how the government hopes
a massive scare campaign can be an effective front line weapon in next year’s election.</p>
<p>In 2016 Malcolm Turnbull declined to run a heavily negative campaign,
especially against Shorten personally. When things went pear-shaped he
was strongly criticised for his approach.</p>
<p>Tony Nutt, Liberal federal director at the time, speaking soon after
the election, defended the approach by saying research had confirmed
voters were sick of political aggression and wanted to see a positive
vision and plan. But others in the party were not convinced.</p>
<p>Labor, for its part, did very well with its “Mediscare”.</p>
<p>In more desperate circumstances and with a new leader, the Liberals at
the next election will go all out stoking fears. Morrison is a much
better negative campaigner than Turnbull ever could be: he delivers
lines sharply and is not troubled by inconvenient nuance.</p>
<p>The government, assisted by the cooling of the housing market, has
been stepping up its warnings about the effects on house prices of
ALP’s negative gearing plan. Labor’s proposed crackdown on cash
refunds from dividend imputation is also a ripe target, especially for
agitating retirees (although pensioners are exempt).</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/pensioners-would-retain-cash-refunds-on-franked-dividends-under-labor-backdown-93972">Pensioners would retain cash refunds on franked dividends under Labor backdown</a>
</strong>
</em>
</p>
<hr>
<p>And now that Shorten has released the energy policy this week, the
Coalition is reaching back into the past for lines and spectres.</p>
<p>Labor’s promise to subsidise home batteries ($2000 for
households with incomes under $180,000) is dubbed “pink batts to pink batteries” to trigger memories of Kevin Rudd’s ill-prepared policy that cost several lives.</p>
<p>Energy Minister Angus Taylor went for the ultimate try-on, when he
posed outside the Tomago Aluminium Smelter in Newcastle and claimed
that “if all of Bill’s batteries were installed, it would keep this
smelter, this business, going for less than 15 minutes”. “Bill’s
batteries” are not, of course, aimed at powering Tomago.</p>
<p>The old line about the ALP putting a “wrecking ball” through the
economy with its policy is getting a fresh workout.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/households-to-get-2000-subsidy-for-batteries-under-shorten-energy-policy-107417">Households to get $2000 subsidy for batteries under Shorten energy policy</a>
</strong>
</em>
</p>
<hr>
<p>In crafting its energy policy, Labor is drawing on different, more
recent history – the widespread support from the business community
and other stakeholders for the National Energy Guarantee that the
Coalition abandoned amid its leadership meltdown.</p>
<p>Shorten says a Labor government would try to get bipartisan agreement for a NEG, but not rely on doing so.</p>
<p>In an interventionist approach, Labor proposes an additional $10
billion for the Clean Energy Finance Corporation; its investments
would support large scale generation and storage projects.</p>
<p>Labor’s investment would be in renewables, pushing towards its target
of 50% of Australia’s energy coming from renewables by 2050. In
contrast, the government is planning early next year to have a “short
list” of dispatchable power projects, focusing on coal, gas and hydro,
that it will look at underwriting.</p>
<p>An ALP government would also provide $5 billion for “future-proofing”
the energy network – the transmission and distribution systems.</p>
<p>Labor’s energy policy is in the context of its commitment to a much
more ambitious emissions reduction target than the government has – a
45% economy-wide reduction by 2030 on 2005 levels, compared with the
Coalition’s 26%-28%. </p>
<p>This week’s announcement is about the energy
sector only – the opposition will release soon its climate change
policies to lower emissions in other sectors including
transport. The government, homing in on the 45% target, is conjuring up scares about the nation’s cattle herd and the like.</p>
<p>Labor claims its energy policy would drive power prices down; the
government says it would drive them up. In fact no one can be sure
what will happen in the next few years in a situation where we are
undergoing a major transition to a different energy mix.</p>
<p>Nor is it clear which side will win the coming debilitating round of the
energy-climate wars.</p>
<p>The ALP would be unwise to underestimate the power of the scare. On
the other hand, the government’s own policy looks like a
shredded garment now it has torn up the NEG. Its “big stick’,
including the threat of divestitures, and its promised "short list” of new
dispatchable power projects don’t really cut it.</p>
<p>Labor would be heartened by the early responses its policy is
receiving from business groups, despite their reservations.</p>
<p>In a crack at the government’s threat, the Business Council of
Australia welcomed “Labor’s commitment not to support heavy-handed,
intrusive changes into the energy sector such as forced divestiture”.</p>
<p>Most notable in the reaction of these groups, however, was their
hankering for the NEG.</p>
<p>The Ai Group said a revised NEG was “still achievable” and “would be
greatly preferable” to a government directly underwriting new
generation, versions of which were being proposed by both major
parties. The BCA was pleased Labor was taking the NEG to the election,
reiterating that it was “a credible, workable, market-based solution
to the trilemma of affordability, reliability and reducing our
emissions”. The Australian Chamber of Commerce and Industry was
likewise encouraged by the reference to the NEG.</p>
<p>This indicates that Labor’s decision to include the NEG in its plan is
not just sound on policy grounds but is politically savvy. By keeping
alive the NEG option, Labor has reached out to business.</p>
<p>Surely many Liberals are now starting to think that far from giving
themselves a break against Labor by rejecting the NEG, they may have
put themselves at a serious disadvantage which could be hard to
overcome even with a fierce scare campaign.</p>
<p>This also raises an interesting question for after the election, if
Labor wins. Given the widespread support for a NEG, would a Coalition
opposition persist in rejecting it? Much would depend on the factional
make up of the Liberal party of the day.</p><img src="https://counter.theconversation.com/content/107451/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’s promise to subsidise batteries for households quickly became, in government parlance, “pink batts to pink batteries” – seeking to trigger memories of Rudd’s policy that cost several lives.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1057402018-10-31T18:54:42Z2018-10-31T18:54:42ZState governments can transform Australia’s energy policy from major fail to reliable success<p><em>This week we’re exploring the state of nine different policy areas across Australia’s states, as detailed in Grattan Institute’s <a href="https://grattan.edu.au/?post_type=report&p=6974&preview=true">State Orange Book 2018</a>. Read the other articles in the series <a href="https://theconversation.com/au/topics/state-of-the-states-2018-61464">here</a></em>.</p>
<hr>
<p>Energy policy in Australia is a major failure. The federal government has been unable to forge an effective policy to ensure affordable, reliable and low-emissions electricity. It’s time for the states to step up. </p>
<p>Internationally, responsibility for climate change policies rests with national governments. The federal government says it remains committed to <a href="https://theconversation.com/australias-2030-climate-target-puts-us-in-the-race-but-at-the-back-45931">Australia’s target</a> under the <a href="https://theconversation.com/the-paris-climate-agreement-at-a-glance-50465">Paris Agreement</a>, but it has <a href="https://reneweconomy.com.au/coalition-votes-down-coag-push-to-keep-climate-on-energy-policy-agenda-16324/">abandoned</a> the emissions-reduction obligation of the <a href="https://theconversation.com/infographic-the-national-energy-guarantee-at-a-glance-85832">National Energy Guarantee (NEG)</a>. This leaves Australia’s electricity sector, which is responsible for <a href="http://www.environment.gov.au/system/files/resources/63391569-7ffa-4395-b245-e53893158566/files/nggi-quarterly-update-mar-2018.pdf">34% of our overall emissions</a>, with no credible policy to reduce those emissions. </p>
<p>The states should fill this policy vacuum if it persists. They should work together on a nationwide emissions reduction scheme through state-based legislation, independent of the federal government. A Commonwealth-led national policy would be best, but a state-based policy is far better than none.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-too-hard-basket-a-short-history-of-australias-aborted-climate-policies-101812">The too hard basket: a short history of Australia's aborted climate policies</a>
</strong>
</em>
</p>
<hr>
<p>In October 2018 the <a href="http://coagenergycouncil.gov.au/publications/20th-energy-council-ministerial-meeting-communiqu%C3%A9">COAG Energy Council agreed</a> to continue work on the reliability element of the NEG. The states and territories should maintain this support and implement this policy with the Commonwealth government, and so support the reliability of the <a href="https://www.aemo.com.au/Electricity/National-Electricity-Market-NEM">National Electricity Market</a> during a challenging transition.</p>
<p>The Grattan Institute’s <a href="https://grattan.edu.au/?post_type=report&p=6974&preview=true">State Orange Book 2018</a> shows that there is also much the states can do to reduce energy prices. Consumers are understandably upset – household retail prices have increased by more than half in the past decade, according to the Australian Competition and Consumer Commission (see page 7 <a href="https://www.accc.gov.au/system/files/Retail%20Electricity%20Pricing%20Inquiry%E2%80%94Final%20Report%20June%202018_0.pdf">here</a>). </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/243156/original/file-20181031-76413-1hx1njx.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/243156/original/file-20181031-76413-1hx1njx.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/243156/original/file-20181031-76413-1hx1njx.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=424&fit=crop&dpr=1 600w, https://images.theconversation.com/files/243156/original/file-20181031-76413-1hx1njx.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=424&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/243156/original/file-20181031-76413-1hx1njx.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=424&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/243156/original/file-20181031-76413-1hx1njx.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=533&fit=crop&dpr=1 754w, https://images.theconversation.com/files/243156/original/file-20181031-76413-1hx1njx.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=533&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/243156/original/file-20181031-76413-1hx1njx.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=533&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">How your state measures up on energy.</span>
<span class="attribution"><span class="source">Grattan Institute State Orange Book 2018</span></span>
</figcaption>
</figure>
<p>The federal government is certainly focused on price – Prime Minister Scott Morrison has <a href="https://www.abc.net.au/news/2018-08-26/scott-morrison-announces-new-cabinet-after-julie-bishop-quits/10166300">referred</a> to Energy Minister Angus Taylor as the “minister for getting electricity prices down” – but many important pricing policies depend on state action. </p>
<p>Retail pricing is the obvious example. Poorly regulated retail electricity markets have <a href="https://grattan.edu.au/report/price-shock/">not delivered for consumers</a>. Retail margins are higher than would be expected in a truly competitive market. Many consumers find the market so <a href="https://theconversation.com/if-you-need-a-phd-to-read-your-power-bill-buying-wisely-is-all-but-impossible-98617">complicated</a> they give up trying to understand it. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/a-high-price-for-policy-failure-the-ten-year-story-of-spiralling-electricity-bills-89450">A high price for policy failure: the ten-year story of spiralling electricity bills</a>
</strong>
</em>
</p>
<hr>
<p>State governments should work alongside the federal government to help consumers navigate the retail “confusopoly”. Governments should require retailers to help consumers compare offers and get the best deal. They should also stop retailers using excessive pay-on-time discounts (which tend to confuse rather than help consumers and can trap lower-income households), and ensure vulnerable customers do not pay high prices. </p>
<p>However, governments should <a href="https://theconversation.com/capping-electricity-prices-a-quick-fix-with-hidden-risks-101981">resist the temptation</a> to use price caps as a quick fix. If set too low, price caps could reduce competition and drive longer-term price increases. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/capping-electricity-prices-a-quick-fix-with-hidden-risks-101981">Capping electricity prices: a quick fix with hidden risks</a>
</strong>
</em>
</p>
<hr>
<p>Western Australia, Tasmania and the Northern Territory, which have not yet adopted retail competition, should move in that direction – while learning from the mistakes of others.</p>
<p>Network costs make up the biggest share of the electricity bill for most households (see page 8 <a href="https://www.accc.gov.au/system/files/Retail%20Electricity%20Pricing%20Inquiry%E2%80%94Final%20Report%20June%202018_0.pdf">here</a>) and some small businesses. This is particularly an issue in New South Wales, Queensland and Tasmania, where network values <a href="https://grattan.edu.au/report/down-to-the-wire/">increased substantially under public ownership</a> and those costs were passed on to consumers. </p>
<p>These states should write down the value of their overvalued networks or provide rebates to consumers, so the price of the networks is more closely aligned to the value they provide to consumers. Given the poor performance of publicly owned networks, any network businesses still in government hands should be privatised. </p>
<p>Responsibility for setting network reliability requirements should be transferred to the <a href="https://www.aer.gov.au/">Australian Energy Regulator</a> to prevent risk-averse state governments from imposing <a href="https://theconversation.com/amid-blackout-scare-stories-remember-that-a-grid-without-power-cuts-is-impossible-and-expensive-102115">excessive reliability standards</a>, which would drive up network costs again. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/amid-blackout-scare-stories-remember-that-a-grid-without-power-cuts-is-impossible-and-expensive-102115">Amid blackout scare stories, remember that a grid without power cuts is impossible... and expensive</a>
</strong>
</em>
</p>
<hr>
<p>Until recently, it seemed state governments had learned the lessons from the bad old days of <a href="https://theconversation.com/policy-overload-why-the-accc-says-household-solar-subsidies-should-be-abolished-99937">excessively generous subsidies</a> for rooftop solar. That was until August 2018, when the Victorian government <a href="https://www.premier.vic.gov.au/cutting-power-bills-with-solar-panels-for-650000-homes/">committed more than A$1 billion</a> to pay half the cost of solar panels for eligible households and provide an interest-free loan for the remainder. Most of these systems would pay for themselves without subsidy. The Victorian government should abandon this waste of taxpayers’ money. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/policy-overload-why-the-accc-says-household-solar-subsidies-should-be-abolished-99937">Policy overload: why the ACCC says household solar subsidies should be abolished</a>
</strong>
</em>
</p>
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<p>Finally, Australia’s gas market is adding to the price pain of homes and businesses. As <a href="https://www.accc.gov.au/media-release/east-coast-gas-market-conditions-have-eased-but-more-gas-required-to-lower-prices">international prices rise</a>, there is no easy way to avoid some painful decisions. But some state policies are making matters worse. </p>
<p>The Victorian and Tasmanian governments’ moratoria on gas exploration and development constrain supply and drive up prices. The moratoria should be lifted. Instead, these states should give case-by-case approval to gas development projects, with safeguards against specific risks. </p>
<p>Australia needs reliable, affordable electricity to underpin our 21st-century economic prosperity. That must be protected while we also decarbonise the energy sector.</p>
<p>Energy market reform was at the forefront of national competition policy in the mid to late 1990s. But reform has since slowed, and the states are partly responsible. The states can rekindle the fire by pursuing a clear, nationally consistent action plan for affordable, reliable and low-emissions electricity.</p>
<p>Australia’s households and businesses – and the environment – are relying on the states to step up.</p><img src="https://counter.theconversation.com/content/105740/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The State Orange Book 2018, from which this article draws, was supported by a grant from the Susan McKinnon Foundation. The Grattan Institute began with contributions to its endowment of $15 million from each of the Federal and Victorian Governments, $4 million from BHP Billiton, and $1 million from NAB. In order to safeguard its independence, Grattan Institute’s board controls this endowment. The funds are invested and contribute to funding Grattan Institute's activities. Grattan Institute also receives funding from corporates, foundations, and individuals to support its general activities as disclosed on its website.</span></em></p>The federal government is primarily to blame for the mess that is Australia’s energy policy. It’s time for the states to step up, to reduce both prices and emissions.Tony Wood, Program Director, Energy, Grattan InstituteGuy Dundas, Energy Fellow, Grattan InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1047972018-10-11T10:47:57Z2018-10-11T10:47:57ZGrattan on Friday: Malcolm Turnbull is gone but son Alex keeps the climate faith<p>In a Thursday video for the Wentworth byelection, Malcolm Turnbull’s son Alex has denounced “extremists on the hard right” who, he says, have taken over the Liberal Party.</p>
<p>The younger Turnbull called on voters in his dad’s old seat to register a protest about the party’s direction, and deliver a message on climate change. “If you want to pull the Liberal party back from the brink, there is one clear signal you can send,” he said, urging people not to vote Liberal.</p>
<p>Apart from the leadership coup Turnbull, a Singapore-based investment manager, highlighted energy policy to make his point about the hard right’s “crazy agenda”.</p>
<p>“As an investor in energy, I’ve seen that in particular there’s no way coal can compete anymore. Renewables have gotten too cheap, firming costs are reasonable, and really there’s no trade off any more between lowering your power bills and reducing emissions. And yet still some would like to prosecute a culture war over this issue”.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1050262665073811456"}"></div></p>
<p>Kerry Schott, head of the Energy Security Board, is coming from a
rather different place but at the Australian Financial Review’s energy summit this week she delivered an equally blunt <a href="https://www.smh.com.au/business/the-economy/i-haven-t-left-anger-yet-energy-chief-schott-slams-policy-anarchy-20181010-p508s1.html">message</a> about the
politics of energy, describing “the general state of affairs right now
as anarchy”.</p>
<p>Schott spearheaded the development of the National Energy Guarantee, a plan that had widespread backing, only to be slain by the Liberal party’s right in the exercise that felled Turnbull. Schott likened her feelings to “going through the stages of grief”, saying “I haven’t left anger yet”.</p>
<p>Anyone with an eye for decent policy, for getting some order into an area that’s long been the plaything of chaotic hyper-partisanship, would be there with Schott. As for investors in the sector, they’re in despair.</p>
<p>Scott Morrison stepped into the prime ministership amid the smouldering ruins of the NEG - which he quickly declared dead - and the Liberal right wingers’ scepticism about emissions reduction targets and hostility to the Paris climate agreement.</p>
<p>His approach has been to load all the emphasis onto price, with Angus
Taylor “the minister for getting electricity prices down”. As for emissions, the 26%-28% on 2005 levels by 2030 reduction target has
stayed, but it is played down, with Morrison’s line being that it will
be reached “in a canter”.</p>
<p>Morrison has, however, fended off the right’s persistent calls for Australia to get out of Paris. Tackled this week by shock jock Alan Jones, the Prime Minister gave his usual two reasons for declining to exit.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/view-from-the-hill-the-uncivil-mr-jones-104549">View from The Hill: The uncivil Mr Jones</a>
</strong>
</em>
</p>
<hr>
<p>Australia should stick with agreements it had made, he said, pointing out that the Abbott government (not a Labor one) had signed up. And climate change was an “enormously important issue” to the Pacific countries, which in turn were important to Australia strategically.</p>
<p>More broadly though, Morrison avoids dwelling on the significance of climate change.</p>
<p>To deal with energy in all its aspects – policy and politics - a government requires a linked, multi-pronged approach that manages, at the most efficient price, the inevitable transition to cleaner energy.</p>
<p>For business, the policy needs to set an investment framework providing predictability; for consumers it has to constrain prices; for the general citizenry, it should pay regard to their concerns about global warming.</p>
<p>The Morrison government isn’t doing much on the first or the third requirement, and is likely, when the election comes around, to have fallen short of significant progress on the second.</p>
<p>After the collapse of the NEG there is no certainty for investors. According to one independent source close to the industry, business
has given up on this government. Another source says business is trying to work out its own way ahead.</p>
<p>Business is more tuned into, and willing to talk about, the emissions challenge and climate change than the government is. For the government, going there takes it down the alley of internal ideological conflict.</p>
<p>When the Intergovernmental Panel on Climate Change’s <a href="http://www.ipcc.ch/report/sr15/">report</a> came this week, the Coalition was unimpressed by its call for the international community to phase out coal by mid-century in order to contain the temperature rise. After all, the government is still under internal pressure to underpin investment in new coal-fired power, if investors can be found.</p>
<p>In contrast, Alex Turnbull said in his video the IPCC report “frankly was terrifying … and it’s seemingly insane to me that we could not be doing something about this and soon”.</p>
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<a href="https://theconversation.com/ipcc-1-5-report-heres-what-the-climate-science-says-104592">IPCC 1.5℃ report: here's what the climate science says</a>
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<p>Obviously the government is correct when it judges voters are focused on power prices. But it errs in its apparent belief that the public don’t care much about emissions, and it under-estimates people’s commitment to renewables.</p>
<p>In this year’s <a href="https://www.lowyinstitute.org/publications/2018-lowy-institute-poll">Lowy poll</a>, 59% agreed with the proposition: “Global warming is a serious and pressing problem. We should begin taking steps now even if this involves significant costs”.</p>
<p>The survey found 84% agreed with the statement: “The government should focus on renewables even if this means we may need to invest more in infrastructure to make the system more reliable”.</p>
<p>Only 14% agreed: “The government should focus on traditional energy sources such as coal and gas, even if this means the environment may suffer to some extent”.</p>
<p>And yet the government refers to dispatchable power as “fair dinkum” power. It doesn’t just go to the problems that have to be addressed with renewables, but often in its rhetoric gives them something of a second-class status.</p>
<p>The government’s near-total focus on prices translates into what it characterises as a “big stick” approach towards companies – a degree of intervention it would roundly condemn if it were being pursued by a Labor government.</p>
<p>The biggest stick can only do so much, and prices will still be high when people vote.</p>
<p>Taylor told the AFR summit, “If the industry focuses on consumers, customers and their interests, government can return to the light touch regulations that we would always prefer”.</p>
<p>But while measures at the consumer end have an essential place, the core of the issue is further back in the chain – getting the proper settings to encourage investment.</p>
<p>That is what the government can’t achieve, because of its own divisions.</p>
<p>As on other fronts, the Coalition has handed an advantage to Labor on energy and climate policy.</p>
<p>The ALP has a controversially ambitious target for emissions reductions (45 per cent reduction on 2005 levels by 2030), but the government’s ability to run a scare campaign about the implications for price and reliability is diminished by its own gaping policy hole.</p>
<p>Labor is looking to pick up the discarded NEG. It is currently grappling with the question of how, if it brought in a NEG, it could maximise certainly for investors in a political situation where a Coalition opposition could play “the politics of repeal” - as Tony Abbott did when the then ALP government introduced its carbon policy. </p>
<p>After the government’s shambles, Labor has a reasonable story to tell investors. But the story those investors really wanted to hear was a bipartisan one, and that won’t be delivered.</p><img src="https://counter.theconversation.com/content/104797/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>Alex Turnbull said in his video the IPCC report “frankly was terrifying … and it’s seemingly insane to me that we could not be doing something about this and soon”.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1028052018-09-06T13:10:10Z2018-09-06T13:10:10ZGrattan on Friday: Morrison ticks the boxes but can’t hide the dysfunction<p>Scott Morrison is approaching a prime ministership that fell into his lap in the tactical manner you might expect from the NSW Liberal party director he once was. Take this week.</p>
<p>First, he seized the Howard barnacle scraper, dumping the plan to lift the pension eligibility age to 70. Not because it was bad policy, but because it could lose votes.</p>
<p>Then there was the “back to Menzies” speech. All Liberal leaders feel the need to touch those spiritual bones – this time that came with a pilgrimage to Albury, the site of one of the party’s founding conferences.</p>
<p>Invoking Menzies is a gesture to the faithful. But Morrison’s preacher-style stump speech sent some wider messages.</p>
<p>We heard again his mantra of “a fair go for those who have a go”. The exhortation to “make a contribution, not to seek one” is a version of Joe Hockey’s “lifters and leaners” (which Hockey got from Menzies).</p>
<p>“We’ve got to look after our mates”, Morrison said, to flag he believes in the social safety net and Medicare.</p>
<p>There was a pitch about inclusion: “you love all Australians if you love Australia” - whether they “rocked up” in chains like his forebears or arrived last week.</p>
<p>And as for the peskies who demand gestures like getting out of the Paris climate accord: don’t worry about Paris, he’s saying, “we’ll absolutely be able to deal with our present target out to 2030 with no impact on electricity prices at all.”</p>
<p>In his neat must-do list, Morrison has already visited both a drought area and our most important big neighbour. He spurned some little neighbours by bypassing the Pacific Islands Forum in Nauru, a difficult meeting, given their views about climate change, and the backdrop of refugees. But he’d reckon Australian voters wouldn’t care or even notice that he didn’t go.</p>
<p>In copybook terms, it’s hard to fault Morrison’s first fortnight, if you can get past his description of events that tore down a PM as “that Muppet Show”, and swallow any cynicism about his carefully crafted choreography.</p>
<p>But stand back, and you see a wider shambles.</p>
<p>The leaks this week have been prolific, distracting and damaging.</p>
<p>The Liberal women are seriously up in arms, about both bullying and female under-representation.</p>
<p>The blokes felt they could dismiss the complaints of backbenchers Julia Banks and Lucy Gichuhi, either by denying their substance or with platitudes. But the coup had blown the lid off longer-held grievances and created some fresh deep resentment.</p>
<p>The Minister for Women, Kelly O'Dwyer, weighed in, followed by Julie Bishop. If Bishop is on your political tail, be very afraid.</p>
<p>In a swingeing speech the former Liberal deputy condemned unacceptable behaviour in Canberra, flatly rejected the “nothing to see here, move on” line, and delivered a tough message on women.</p>
<p>“I say to my party … it is not acceptable for us to have in 2018 less than 25% of our parliamentarians as female. It is not acceptable for our party to contribute to the fall in Australia’s ratings from 15th in the world in terms of female parliamentarian representation in 1999, to 50th today”, Bishop said.</p>
<p>On another front, the controversy over Peter Dutton’s use of his ministerial discretion in granting visas to au pairs is spinning out of control. While he’s the one in the political dock, it is a collective problem because Dutton – the coup instigator – remains a senior minister.</p>
<p>The issue is whether Dutton’s decisions were responses to representations from people he knew. He had denied any personal links but information contradicting that denial has come out.</p>
<p>The au pair affair on Thursday burst into a bitter public fight between Dutton and his former Australian Border Force chief Roman Quaedvlieg. </p>
<p>Quaedvlieg wrote to the Senate inquiry into Dutton’s conduct claiming that in June 2015 he was called by Dutton’s chief of staff, Craig Maclachlan, who said “the boss’s mate in Brisbane” had run into a problem with a prospective au pair - she had been detained over her visa. </p>
<p>In a blistering counter attack, Dutton accused Quaedvlieg of “fabrication of evidence to a Senate committee”. Dutton said Maclachlan didn’t even work for him at the time; he also suggested Quaedvlieg had mental health issues.</p>
<p>Apart from the au pair affair, a question mark remains over whether Dutton could be in breach of the constitution’s section 44, relating to pecuniary interests, because of a family trust that gets funds from a child care business, which in turn receives government moneys.</p>
<p>At a policy level, the Morrison government has a serious gap at the heart of its agenda.</p>
<p>A few weeks ago the Turnbull government was on the brink of clinching a National Energy Guarantee that commanded wide support from business and opened the prospect of providing investment certainty. Now energy policy is back to chaos.</p>
<p>The emerging policy is little more than a collection of “big sticks”, including threatened divestment and even a possible royal commission, designed to force companies to lower prices.</p>
<p>Some on the Liberal right and among the hardline commentariat continue to make withdrawal from Paris a benchmark. Morrison won’t do that but his attitude is, please let’s not talk emissions. At the Pacific Islands Forum, Australia sought to water down the climate language.</p>
<p>As for certainty, there is less than before and without doubt much less than the NEG promised.</p>
<p>Sarah McNamara, CEO of the Australian Energy Council, which represents generators and retailers, says recent events have “impacted negatively [on investment prospects] because the uncertainty we have been dealing with now looks set to continue.</p>
<p>"And it’s dawning on us that the critical bipartisanship that’s needed may be impossible to achieve even in the medium term”.</p>
<p>As we move towards an election, certainty on another front will come front and centre.</p>
<p>Morrison, the ultimate pragmatist, will throw everything at winning. But if he managed to do so, against the odds, how would he govern after the election?</p>
<p>In the early days of the Turnbull government, Morrison was casting himself as a reformer, including promoting changes to the GST. But he is not expected to go to next year’s election with a robust reform program.</p>
<p>If he has a small-target strategy, Labor will claim he’s the wolf in sheep’s clothing – a classic scare campaign. Morrison will have to convince voters his word is his bond.</p>
<p>Would a re-elected Morrison have a new tack post election? He wouldn’t be the first PM to say one thing pre poll and another afterwards. But on the other hand he saw what happened to Tony Abbott when he broke his pre-election promises. He never got over it. Malcolm Turnbull was always careful in sticking to his pledges.</p>
<p>If before the election Morrison locks himself out of a serious reform agenda, the hands of a post-election Coalition government would be tied – unless Morrison were willing to go back on his undertakings and risk the consequences.</p><img src="https://counter.theconversation.com/content/102805/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>It’s hard to fault Morrison’s first fortnight, if you can get past his description of events that tore down a PM as “that Muppet Show”, and swallow any cynicism about his careful choreography.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1019812018-08-22T06:30:46Z2018-08-22T06:30:46ZCapping electricity prices: a quick fix with hidden risks<p>Governments have got the message: Australians are angry about electricity prices. On Monday, Prime Minister Malcolm Turnbull announced a decisive shift away from <a href="https://theconversation.com/malcolm-turnbull-shelves-emissions-reduction-target-as-leadership-speculation-mounts-101811">reducing emissions</a> to <a href="http://sjm.ministers.treasury.gov.au/media-release/089-2018/">reducing prices</a>. </p>
<p>This move means that both the federal government and the <a href="http://www.billshorten.com.au/labor_s_plan_to_cut_power_bills_sunday_19_august_2018">opposition</a> have adopted an <a href="https://www.accc.gov.au/system/files/Retail%20Electricity%20Pricing%20Inquiry%E2%80%94Final%20Report%20June%202018_0.pdf">Australian Competition and Consumer Commission</a> (ACCC) recommendation to cap electricity prices through a regulated “default offer”, although whether the states and territories will support this approach is unclear. </p>
<p>The good news is that price caps will probably work as advertised. That is, they will reduce prices for a relatively small number of customers who are currently on bad deals. </p>
<p>The bad news is that capping prices could also have unintended consequences.</p>
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Read more:
<a href="https://theconversation.com/a-high-price-for-policy-failure-the-ten-year-story-of-spiralling-electricity-bills-89450">A high price for policy failure: the ten-year story of spiralling electricity bills</a>
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<p>Electricity prices have risen much faster than inflation for more than a decade. From around 2005 to 2014 the cost of the electricity network (the “poles and wires”) <a href="https://grattan.edu.au/report/down-to-the-wire/">increased substantially</a>, mainly through over-investment by various state government owners, and highly prescriptive (and expensive) reliability standards. </p>
<p>Since 2016, wholesale electricity prices have <a href="https://grattan.edu.au/report/mostly-working/">increased rapidly</a> as gas prices have risen and as old coal-fired power stations were retired at the end of their life, reducing supply. During the same period governments required prices to rise to pay for renewable energy subsidies, particularly for rooftop solar systems.</p>
<p>Together, these three factors account for about 80% of the increase in household electricity prices <a href="https://www.accc.gov.au/system/files/Retail%20Electricity%20Pricing%20Inquiry%E2%80%94Final%20Report%20June%202018_Exec%20summary.pdf">over the past decade</a>. Bashing big companies is the flavour of the month, but there was not a lot that energy companies such as AGL, Origin and EnergyAustralia could realistically have done to mitigate any of this.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/233073/original/file-20180822-149472-1lc3cab.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/233073/original/file-20180822-149472-1lc3cab.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/233073/original/file-20180822-149472-1lc3cab.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=256&fit=crop&dpr=1 600w, https://images.theconversation.com/files/233073/original/file-20180822-149472-1lc3cab.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=256&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/233073/original/file-20180822-149472-1lc3cab.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=256&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/233073/original/file-20180822-149472-1lc3cab.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=322&fit=crop&dpr=1 754w, https://images.theconversation.com/files/233073/original/file-20180822-149472-1lc3cab.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=322&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/233073/original/file-20180822-149472-1lc3cab.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=322&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">Change in average residential customer effective prices (c/kWh) from 2007–08 to 2017–18 across the National Electricity Market (prices in real 2016–17 dollars, excluding GST).</span>
<span class="attribution"><span class="source">ACCC</span></span>
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<p>But several other factors have driven prices still higher, including the substantial profit margins charged by the big energy retailers. This prompted the ACCC’s recommendation of a “default offer”, to ensure that a customer who does not sign up to a market contract pays no more than a regulated price. </p>
<h2>Household savings?</h2>
<p>Both sides of politics say that this policy will save some households more than A$100 a year. But this is only true of the relatively small number of households who have not signed a contract with a retailer and so are on a “standing offer”. </p>
<p>In Victoria, the state with the most developed retail market, this is only 7% of households. That figure is higher where price controls have been removed more recently (around 19% in Southeast Queensland), but it is declining rapidly (see page 244 <a href="https://www.accc.gov.au/system/files/Retail%20Electricity%20Pricing%20Inquiry%E2%80%94Final%20Report%20June%202018_0.pdf">here</a>). </p>
<p>So there will be large savings, but only for a small proportion of households. What’s more, the ACCC’s analysis suggests that the measure will not particularly benefit lower-income households, because those on hardship payment programs are less likely to be on a standing offer (see page 245 <a href="https://www.accc.gov.au/system/files/Retail%20Electricity%20Pricing%20Inquiry%E2%80%94Final%20Report%20June%202018_0.pdf">here</a>). Think beach houses, not working families. </p>
<h2>A quick fix</h2>
<p>The danger is that politicians may be tempted to use price caps as a quick fix to reduce prices across the board. Given the many factors that have pushed up electricity prices in recent years, this approach is likely to be counterproductive. </p>
<p>It is likely to damage competition and inadvertently benefit the biggest power companies. An aggressively low price cap would make it impossible for many retailers to recover their genuine costs of supplying electricity. Fewer retailers would mean increased market concentration. And because most power companies are both retailers and generators, a small saving for consumers from lower retail margins could be more than offset by price increases resulting from a less competitive wholesale market. </p>
<p>Now is not the time to abandon market-based competition, given the rapid change in Australian and global energy markets. International companies such as <a href="https://www.zenenergy.com.au/blog/french-and-australian-leaders-witness-landmark-green-power-agreements-for-industry/">Neoen</a>, <a href="http://www.gfgalliance.com/media/sacome-joint-electricity-purchasing-group-awards-long-term-supply-contract-sanjeev-guptas-simec-zen-energy/">SIMEC ZEN</a>, <a href="https://onestepoffthegrid.com.au/mars-goes-100-solar-six-australian-factories/">Total Eren</a> and <a href="http://www.baywa-re.com.au/en/baywa-re/news/235/">BayWa r.e.</a> are investing in renewable generation and battery storage, and increasingly selling power directly to commercial and industrial customers. It is only a matter of time before these players begin to compete in the wider retail market. </p>
<p>What’s more, while product innovation in retailing has been limited to date (indeed, one of the critiques of a competitive electricity retail market is that they are all supplying the same electrons through the same wires), the prospects for future innovation are good. Rooftop solar panels and batteries provide a new way to supply power, and companies can increasingly use data from smart meters to inform and empower consumers.</p>
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Read more:
<a href="https://theconversation.com/the-solar-panel-and-battery-revolution-how-will-your-state-measure-up-76866">The solar panel and battery revolution: how will your state measure up?</a>
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<p>It is understandable that governments want to protect consumers from high electricity prices. A modest price cap through a default offer, implemented cautiously, might be analogous to existing measures under Australian consumer law that limit excessive credit card payment surcharges. But the ACCC does not directly regulate credit card fees, and nor should governments directly regulate electricity prices, the drivers of which are complex and constantly changing. Rather, the focus should be on helping consumers to navigate a competitive electricity market.</p>
<p>The ACCC’s default offer recommendation is not just about capping prices for a small number of disengaged customers. It is also intended to provide a clear benchmark against which all customers can compare offers and get a fair deal. Both major federal parties have indicated their support for a range of ACCC proposals to help consumers understand electricity prices. The government should implement the full package, with price caps playing a limited role, if any. Price caps are a seductive short-term solution with dangerous longer-term consequences.</p><img src="https://counter.theconversation.com/content/101981/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Guy Dundas 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>Australians are angry about electricity prices and both the federal government and opposition are proposing to cap them. Will this approach work, and what are the risks?Guy Dundas, Energy Fellow, Grattan InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1018192018-08-20T20:02:21Z2018-08-20T20:02:21ZHow to move energy policy models beyond bias and vested interests<figure><img src="https://images.theconversation.com/files/232638/original/file-20180820-30593-fmzgin.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Modelling should be a chance to test your assumptions, not just confirm them.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>The Turnbull government’s flagship energy plan, the <a href="https://www.energy.gov.au/government-priorities/better-energy-future-australia">National Energy Guarantee</a>, was intended to end a decade-long stalemate on energy and climate policy in Australia. </p>
<p>Ironically, since its <a href="https://www.pm.gov.au/media/national-energy-guarantee-deliver-affordable-reliable-electricity">unveiling in October 2017</a>, the debate has <a href="https://theconversation.com/emissions-policy-is-under-attack-from-all-sides-weve-been-here-before-and-it-rarely-ends-well-101103">heightened</a> considerably, with the result that the government has now <a href="https://theconversation.com/malcolm-turnbull-shelves-emissions-reduction-target-as-leadership-speculation-mounts-101811">walked away from the emissions-reduction component of the policy</a>. </p>
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Read more:
<a href="https://theconversation.com/malcolm-turnbull-shelves-emissions-reduction-target-as-leadership-speculation-mounts-101811">Malcolm Turnbull shelves emissions reduction target as leadership speculation mounts</a>
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<p>Plenty of attention has gone to the high political drama – and fundamental conflicts over the importance of emissions reductions. But another key issue is the <a href="https://theconversation.com/the-national-energy-guarantee-is-a-flagship-policy-so-why-hasnt-the-modelling-been-made-public-100754">lack of trust</a> in government models predicting the results of their policies. </p>
<p>For instance, the government claimed this month that the NEG will reduce household bills by A$150 per year. <a href="https://theconversation.com/the-national-energy-guarantee-is-a-flagship-policy-so-why-hasnt-the-modelling-been-made-public-100754">Independent analysts</a>, as well as <a href="https://www.cmtedd.act.gov.au/open_government/inform/act_government_media_releases/rattenbury/2018/neg-needs-more-work,-says-act">Labor</a> and <a href="https://greensmps.org.au/articles/senate-forces-minister-reveal-full-neg-modelling">Greens</a> politicians, have questioned this figure. They point out that other <a href="https://theconversation.com/the-national-energy-guarantee-is-a-flagship-policy-so-why-hasnt-the-modelling-been-made-public-100754">models</a> suggest different results – especially one announced by federal energy minister Josh Frydenberg in October 2017, which predicted a A$100 reduction. All these groups have called for the full release of the government’s modelling work.</p>
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Read more:
<a href="https://theconversation.com/the-national-energy-guarantee-is-a-flagship-policy-so-why-hasnt-the-modelling-been-made-public-100754">The National Energy Guarantee is a flagship policy. So why hasn't the modelling been made public?</a>
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<p>But if modelling is a form of scientific analysis, why do different models give such different results?</p>
<h2>What is a model?</h2>
<p>A model is a simplified representation of reality, but that “reality” is defined by the modeller. We give a model a set of inputs and it produces a set of outputs. </p>
<p>The modelling process involves a sequence of “choices” which the modeller makes about the methods to use, the input data to feed in, and the relationships between these data (that is, what impacts what). </p>
<p>By giving some factors more weight – whether deliberately or <a href="https://www.sciencedirect.com/science/article/pii/S1364815216309835">unintentionally</a> – the modeller can make one outcome look more appealing, likely or important than the others. </p>
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Read more:
<a href="https://theconversation.com/explainer-why-we-shouldnt-be-so-quick-to-trust-energy-modelling-88228">Explainer: why we shouldn't be so quick to trust energy modelling</a>
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<p>Imagine asking 100 cooks from different countries to make the best noodle soup in the world. They would all chose different ingredients, types of noodles, and ways of cooking. </p>
<p>These choices would reflect the recipes they already know, the tastes they personally like or dislike, and the ingredients with which they are familiar. These form their biases with regard to what a good noodle soup should be. You would not be surprised if you see 100 very different noodle soups at the end of this competition!</p>
<p>Like noodle soup, policy models are also made with a variety of ingredients, which are shaped by the choices and biases of their modellers and stakeholders. The cumulative effect of these choices creates different models, and therefore different results.</p>
<p>That’s why some modellers and analysts now argue that no model is “the” right model, just as no noodle soup is the right noodle soup, and that no single model would result in an “<a href="http://jsterman.scripts.mit.edu/docs/Sterman-2002-AllModelsAreWrong.pdf">established truthfulness</a>”.</p>
<p>So, how can we design policies using models that are filled with biases and vested interests?</p>
<h2>Exploration, not prediction</h2>
<p>Here is <a href="https://www.sciencedirect.com/science/article/pii/S221462961730350X">our answer</a>: we should not consider models tools for “prediction”, but rather for “exploration”. We should not expect models to give us “the” answer to our policy questions. We need models to explore a range of scenarios to inform policy discussions.</p>
<p>Let’s use the example of reducing greenhouse gas emissions. There are many ways to do this. We can transform our electricity generation systems to boost the amount of renewables; we can improve building efficiencies; we can use cleaner means of transport. </p>
<p>Each pathway has its opponents and proponents. They might argue over their benefits, their consequences, and how much investment each deserves from a finite pool of money.</p>
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<a href="https://theconversation.com/inaccurate-energy-forecasts-are-costing-us-the-earth-heres-why-42808">Inaccurate energy forecasts are costing us the Earth: here's why</a>
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<p>In the conventional predictive approach, we would model each policy option (or a combination of options) and assess its impact on emissions. (And probably each side would undertake their own modelling, with their own implicit assumptions.)</p>
<p>But in an exploratory approach, we treat the model as something to play with, to “test” policy options. We change assumptions underlying the model and see how the results change. We change future scenarios and run numerous scenarios and see how policy options perform under different scenarios. And in the end of this playful exercise, there is no single answer! Each result depends on the assumptions and the scenarios from which it was produced, and – crucially – these assumptions are all documented and made transparent.</p>
<p>We used this approach to investigate India’s <a href="https://www.sciencedirect.com/science/article/pii/S030142151730513X?via%3Dihub">transition to clean energy</a>. They, like Australia, are dealing with highly complicated political and social issues that do not fold neatly into conventional ways of modelling, which strive to give a single answer.</p>
<p>We certainly do not suggest that exploratory modelling is a silver bullet for resolving political differences on complex policy issues. </p>
<p>It can, however, transform our understanding of models from a “blackbox” process to a transparent process open to scrutiny. It can turn implicit assumptions into explicit scenarios which can be tested and debated. In this way, we may have more policies which will deliver what they promise – and a commonly agreed foundation of information over which to argue.</p><img src="https://counter.theconversation.com/content/101819/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>We need to move past biased, opaque models for energy policies.Shirin Malekpour, Research Leader in Strategic Planning and Futures Studies, Monash Sustainable Development Institute, Monash UniversityEnayat A. Moallemi, Research Associate, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1018582018-08-20T13:37:37Z2018-08-20T13:37:37ZView from The Hill: Energy policy and Turnbull’s leadership plunge into debilitating uncertainty<p>The most fraught day of his prime ministership has seen the implosion of one of Malcolm Turnbull’s key policy pledges – to deliver certainty on energy policy – that only weeks ago seemed on course.</p>
<p>As Turnbull threw everything at shoring up his leadership, business critics denounced the compromise he unveiled to appease rebellious backbenchers.</p>
<p>His energy policy rework placated some internal dissidents, but the capitulation has left his authority weakened and the issue itself back in confusion. Stakeholders have been left dismayed and bewildered.</p>
<p>After the <a href="https://theconversation.com/malcolm-turnbull-shelves-emissions-reduction-target-as-leadership-speculation-mounts-101811">announcement</a>, the government was insisting the National Energy Guarantee policy was alive, as some of its backbench critics were pronouncing its demise.</p>
<p>Asked “is the National Energy Guarantee dead?”, Treasurer Scott Morrison said on Sky, “No, not at all. It remains government policy.” He told the ABC: “The policy remains as we took it to the party room with improvements.”</p>
<p>But Kevin Andrews, one of Tony Abbott’s close allies, told Sky: “The reality is that the NEG, for at least the term of this parliament, is dead in the water. There is more chance of seeing a Tyrannosaurus in the local suburban street than seeing this legislation come into the parliament.”</p>
<p>Turnbull’s energy compromise has two parts.</p>
<p>First, legislation to set the 26% emissions reduction target has been shelved, on the ground that a bunch of Coalition MPs would cross the floor.</p>
<p>Turnbull didn’t dare to risk the hazardous route of negotiating the legislation’s passage with Labor, which might have come to nothing but an embarrassing failure, and anyway would have incited the hardliners in his ranks. And a brief flirtation with implementing the target by regulation was abandoned after that caused its own backbench backlash.</p>
<p>Second, a set of highly interventionist measures will be rolled out for use against recalcitrant power companies, including the possibility of breaking up those which abuse their market power. </p>
<p>The initiatives are based on the recent <a href="https://www.accc.gov.au/publications/restoring-electricity-affordability-australias-competitive-advantage">report</a> from the Australian Competition and Consumer Commission, but even the ACCC didn’t support divestiture.</p>
<p>“Requiring the divestiture of privately owned assets is an extreme measure to take in any market, including the electricity market,” it said.</p>
<p>It is certainly an extraordinary course for a pro-market Liberal prime minister to contemplate.</p>
<p>Notably, the Nationals were happy – they had been pressing for the government to take this route. As former deputy prime minister Barnaby Joyce said with enthusiasm, it means “if you play up, we can break you up”.</p>
<p>So where is the great NEG adventure left?</p>
<p>Battered by political bastardy, with months of good work by Energy Minister Josh Frydenberg trashed. Without a legislated target. With less chance of an agreement with the states, which need to tick off on the mechanism. Throwing up fresh problems for investors and promising a continuation of the political climate wars.</p>
<p>As Innes Willox, chief executive of the Australian Industry Group, <a href="https://www.aigroup.com.au/policy-and-research/mediacentre/releases/no-energy-outcome-20Aug/">put it</a> succinctly: “Long-term investment certainty in the energy sector remains further away than ever. Despite the best efforts and goodwill of many, energy policy has again fallen victim to short-term political gamesmanship.”</p>
<p>And where is Turnbull’s leadership left, as backbenchers contemplate whether they would be better off under a Peter Dutton prime ministership?</p>
<p>No one quite knows.</p>
<p>Morrison told the ABC: “I spoke to Peter today in Question Time and he said his position hadn’t changed and he was fully supportive of the prime minister and the government’s policies.” </p>
<p>Just think about that. The Treasurer is asking (in question time no less) a senior cabinet colleague about his intentions.</p>
<p>Basically anything could happen, anytime.</p>
<p>On Tuesday morning, as chance has it, there is a separate Liberal party meeting, before the joint Coalition parties meeting. At the very least, it will be an interesting discussion. Whether more occurs, who knows?</p>
<p>On Monday night Dutton, the man on the leadership stair, was reportedly very angry after the Ten Network ran a <a href="https://tendaily.com.au/news/politics/a180820xwi/constitutional-cloud-emerges-over-peter">story</a> raising a question about his eligibility for parliament under section 44’s pecuniary interest provision.</p>
<p>Ten has said the story was not a political leak, and the timing coincidental. But Dutton would naturally see it as a strike from the Turnbull camp.</p>
<p>If the next few days go quietly, Turnbull will live now from poll to poll, with enemies circling like crows over a weakened animal.</p>
<p>Those enemies could hardly have anticipated they would be able to do so much damage to him, in just a week, after a Coalition parties meeting that actually strongly endorsed the original NEG policy.</p>
<p>They’re watching, waiting. If, or when, they judge Turnbull is vulnerable – that he has lost his numbers – they are ready to strike. Now or later.</p><img src="https://counter.theconversation.com/content/101858/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>If the next few days go quietly, Turnbull will live now from poll to poll, with enemies circling like crows over a weakened animal.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1018122018-08-20T06:26:29Z2018-08-20T06:26:29ZThe too hard basket: a short history of Australia’s aborted climate policies<p>Less than three years ago, after Malcolm Turnbull had wrested the prime ministership from Tony Abbott, I wrote an article entitled “<a href="https://theconversation.com/carbon-coups-from-hawke-to-abbott-climate-policy-is-never-far-away-when-leaders-come-a-cropper-47542">Carbon coups: from Hawke to Abbott, climate policy is never far away when leaders come a cropper</a>”.</p>
<p>Less than two weeks ago I <a href="https://theconversation.com/emissions-policy-is-under-attack-from-all-sides-weve-been-here-before-and-it-rarely-ends-well-101103">wrote again</a> about climate policy’s unique knack of causing leaders to falter, with terminal results for the policies and, often, the leaders themselves.</p>
<p>Now Turnbull has added a new chapter to this saga. He has <a href="https://theconversation.com/malcolm-turnbull-shelves-emissions-reduction-target-as-leadership-speculation-mounts-101811">abandoned the emissions component</a> of his beleaguered <a href="https://theconversation.com/infographic-the-national-energy-guarantee-at-a-glance-85832">National Energy Guarantee</a>, in what has been characterised as a capitulation to a vocal group of backbench colleagues. The climbdown may still not be enough to save his leadership.</p>
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<a href="https://theconversation.com/emissions-policy-is-under-attack-from-all-sides-weve-been-here-before-and-it-rarely-ends-well-101103">Emissions policy is under attack from all sides. We've been here before, and it rarely ends well</a>
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<p>A workable, credible climate policy has been the impossible object that has brought down every prime minister we’ve had for a more than a decade – all the way back to (and including) John Howard.</p>
<h2>Howard’s way</h2>
<p>Howard had spent the first ten years of his prime ministership denying either the existence of climate change or the need to do anything about it. In 2003, virtually all of his cabinet supported an emissions trading scheme. But, after meeting with industry leaders, he <a href="https://www.theage.com.au/national/howard-blows-hot-and-cold-on-emissions-20061115-ge3kkq.html">dumped the idea</a>.</p>
<p>The following year Howard <a href="http://www.abc.net.au/pm/content/2004/s1194166.htm">called a meeting of large fossil fuel companies, seeking their help in destroying the renewable energy target</a> that he had been forced to accept in the runup to the 1997 Kyoto climate summit.</p>
<p>However, in 2006, the political pressure to act on climate became too great. The <a href="https://theconversation.com/au/topics/millennium-drought-22237">Millennium Drought</a> seemed endless, the European Union had launched its own emissions trading scheme, and Al Gore’s documentary <a href="https://theconversation.com/ten-years-on-how-al-gores-an-inconvenient-truth-made-its-mark-59387">An Inconvenient Truth</a> cut through with the Australian public. Late in the year, Treasury came back for another bite at an emissions trading cherry. </p>
<p>In his book <a href="https://www.mup.com.au/books/triumph-and-demise-paperback-softback">Triumph and Demise</a>, journalist Paul Kelly describes how Treasury secretary Ken Henry convinced Howard to adopt an emissions trading policy, telling him: </p>
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<p>Prime Minister, I’m taking as my starting point that during your prime ministership you will want to commit us to a cap on national emissions. If my view on that is wrong, there is really nothing more I can say… If you want a cap on emissions then it stands to reason that you want the most cost-effective way of doing that. That brings us to emissions trading, unless you want a tax on carbon.</p>
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<h2>The moral challenge</h2>
<p>Howard’s problem was that voters were not convinced by his backflip. In November 2007, Kevin Rudd – who had proclaimed climate change “the great moral challenge of our generation” – became prime minister. A tortuous policy-making process ensued, with ever greater concessions to big polluters. </p>
<p>In late 2009, according to <a href="https://books.google.com.au/books?id=Ij9bBAAAQBAJ&pg=PT169&lpg=PT169&dq=turnbull+chris+kenny+kevin+rudd+cprs&source=bl&ots=YYMvDihfrR&sig=w7cmgULKBCRLE26MWrB3mlz0Gqw&hl=en&sa=X&ved=2ahUKEwjl7rzg7frcAhUKjLwKHci9DDUQ6AEwB3oECAIQAQ#v=onepage&q=turnbull%20chris%20kenny%20kevin%20rudd%20cprs&f=false">Kelly’s account</a>, Rudd refused to meet with the then opposition leader Malcolm Turnbull to resolve the outstanding issues around Rudd’s Carbon Pollution Reduction Scheme. Then, in December of that year, Turnbull was toppled by Abbott and the legislation was doomed. </p>
<p>Meanwhile, the Copenhagen climate conference ended in disaster, and although advised to go for a double-dissolution election, Rudd baulked. In April 2010, he <a href="https://www.smh.com.au/environment/climate-change/rudds-ets-flipflop-sparks-climate-chaos-20100428-tsgu.html">kicked emissions trading into the long grass</a> for at least three years, and his approval ratings plummeted.</p>
<p>In July 2010 Julia Gillard toppled Rudd, and the prime ministership has never been safe from internal dissent since. Not since 2004 has a federal leader won a general election from which they would survive to contest the next. </p>
<p>In the final days of the 2010 election campaign, Gillard made the fateful statement that “there will be no carbon tax under a government I lead”.</p>
<p>That election resulted in a hung parliament, and after meeting climate policy advocates Ross Garnaut and Nick Stern, two crucial independents – Tony Windsor and Rob Oakeshott – made a carbon price their price for supporting Gillard.</p>
<h2>The carbon tax war</h2>
<p>Gillard steered the legislation through parliament in the face of ferocious opposition from Abbott, who declared a “<a href="https://theconversation.com/abbott-has-pledged-to-repeal-the-carbon-tax-but-could-it-be-done-7986">blood oath</a>” that he would repeal her legislation. After winning the 2013 election, he <a href="https://theconversation.com/obituary-australias-carbon-price-29217">delivered on his pledge</a> in July 2014. Gillard, for her part, said she <a href="https://www.theguardian.com/world/2013/sep/13/julia-gillard-labor-purpose-future">regretted</a> not taking issue with Abbott’s characterisation of her carbon pricing scheme as a tax.</p>
<p>Abbott also <a href="https://theconversation.com/planned-cut-to-renewable-energy-target-a-free-kick-for-fossil-fuels-33317">reduced the Renewable Energy Target</a>, and tried but failed to rid himself of the Australian Renewable Energy Authority and the Clean Energy Finance Corporation. </p>
<p>Abbott’s demise as prime minister was not as directly tied to climate policy as Howard’s, Rudd’s or Gillard’s. Far more instrumental were gaffes such as giving the Duke of Edinburgh a knighthood.</p>
<p>But as Abbott’s government was descending into chaos, Turnbull seemed to many middle-of-the-road voters like the perfect solution: Liberal economic policy but with added climate concern. On today’s evidence, he seems to have been willing to trade that concern away to stay in the top job.</p>
<h2>The future?</h2>
<p>As of the time of writing – Monday 20 August (it pays to be specific when the situation is in such flux) – it is clear that the NEG is dead, at least in its original incarnation as a means of tackling the climate issue. No legislation or regulation will aim to reduce greenhouse emissions, with the policy now addressing itself solely at power prices. </p>
<p>It is not clear how long Turnbull will remain in office, and one could make a case that he is no longer truly in power. Thoughts now inevitably also turn to what a Shorten Labor government would do in this area if the opposition claims victory at the next election.</p>
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Read more:
<a href="https://theconversation.com/its-ten-years-since-rudds-great-moral-challenge-and-we-have-failed-it-75534">It's ten years since Rudd's 'great moral challenge', and we have failed it</a>
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<p>The first question in that regard is whether Mark Butler – an able opposition spokesman on climate change – would become the minister for a single portfolio covering energy and environment. The next is the degree of opposition that Labor would face – both from members of the union movement looking out for the interests of coal workers, and from business and industry. If Australia’s environment groups win the battle over Adani’s planned Carmichael coalmine, will they have the heart to win the wider climate policy struggle?</p>
<p>As ever, it will come down to stamina and stomach. Would Shorten and Butler have the wherewithal to face down the various competing interests and push through a credible, lasting policy, in an area where all their predecessors have ultimately failed? </p>
<p>Will the Coalition government formulate a new emissions policy – one that can withstand the feet-to-the-fire approach that has killed off every other similar effort so far?</p><img src="https://counter.theconversation.com/content/101812/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>Prime Minister Malcolm Turnbull has abandoned the emissions-reduction component of his signature energy policy, in the latest chapter of a brutal decade-long saga for Australian climate policy.Marc Hudson, PhD Candidate, Sustainable Consumption Institute, University of ManchesterLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1017542018-08-17T11:34:04Z2018-08-17T11:34:04ZTurnbull dumps emissions legislation to stop rebels crossing the floor<p>Prime Minister Malcolm Turnbull has done a backflip on his proposal to put the emission reduction target into legislation, in the face of rebel backbenchers threatening to cross the floor.</p>
<p>The new plan is for the energy target – a 26% reduction to carbon dioxide emissions for the electricity sector – to be set by an executive order of the minister. Such an order cannot be disallowed.</p>
<p>The stunning retreat emerged as the energy issue threatened to turn into a crisis for Turnbull’s leadership, and the government worked on measures to reduce power prices to meet the demands of Coalition dissidents.</p>
<p>Cabinet Minister Peter Dutton remained conspicuously silent on Friday in face of a report that conservatives in the Liberal party were urging him to challenge Malcolm Turnbull within weeks.</p>
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Read more:
<a href="https://theconversation.com/video-michelle-grattan-on-the-neg-showdown-and-a-ray-of-parliamentary-unity-after-fraser-annings-racist-speech-101732">VIDEO: Michelle Grattan on the NEG showdown and a ray of parliamentary unity after Fraser Anning's racist speech</a>
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<p><a href="https://www.dailytelegraph.com.au/news/nsw/conservative-coalition-mps-urging-peter-dutton-to-replace-malcolm-turnbull-within-weeks/news-story/68ea9ee855c6b840ec6557985e4d359e">A report in Sydney’s Daily Telegraph</a> injected leadership speculation into the centre of Turnbull’s already highly difficult battle to curb a backbench rebellion over the government’s National Energy Guarantee (NEG).</p>
<p>The government has consistently refused a demand from the Victorian Labor government that the target should be set by regulation not legislation.</p>
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<a href="https://theconversation.com/infographic-the-national-energy-guarantee-at-a-glance-85832">Infographic: the National Energy Guarantee at a glance</a>
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<p>The executive order would be accompanied by an Australian Competition and Consumer Commission report to parliament on the price impact of the target.</p>
<p>If Turnbull had gone ahead with legislation, and enough backbenchers had crossed the floor to defeat the bill, it would have amounted to an effective vote of no confidence in his leadership.</p>
<p>While some of the backbench rebels will be satisfied with the price package, it is not clear whether this will include Tony Abbott and his hardcore supporters, who want to bring Turnbull down and have smelled political blood.</p>
<p>Tuesday’s Coalition parties meeting will discuss the new proposals.</p>
<p>On another front, Nationals leader and Deputy Prime Minister Michael McCormack is facing mounting criticism of his performance, as the Nationals federal council meets in Canberra at the weekend. The energy issue is likely to be front and centre there.</p>
<p>Despite his public silence, it is understood that Dutton on Friday privately told Turnbull that he was comfortable with the government’s energy policy.</p>
<p>The backbench critics have had two major areas of concern. They did not think the NEG plan did enough to reduce electricity prices. And they were unhappy with the 26% target for reducing emissions in the electricity sector being legislated.</p>
<p>But the retreat from the target being enshrined in legislation will not be enough to satisfy those who want Australia to walk away from the target altogether and pull out of the Paris climate agreement. </p>
<p>Up to 10 backbenchers had threatened to cross the floor on the emissions reduction legislation.</p>
<p>The report about Dutton followed his interview with Ray Hadley on 2GB on Thursday in which Hadley challenged him over whether he was “blindly loyal” to Turnbull.</p>
<p>Dutton said he gave his views privately as a cabinet member and wasn’t going to bag out his colleagues or the Prime Minister publicly.</p>
<p>“If my position changes – that is, it gets to a point where I can’t accept what the government’s proposing or I don’t agree – then the Westminster system is very clear: you resign your commission,” he told Hadley.</p>
<p>The Telegraph report said Dutton was being urged to challenge Turnbull “on a policy platform of lower immigration levels and a new energy policy focusing on cheaper bills rather than lowering emissions.” Conservative MPs had told the Telegraph “a ‘torn’ Mr Dutton was considering his options,” the report said.</p>
<p>Asked on Nine whether Dutton was going to have a crack at the leadership, Defence Industry Minister Christopher Pyne said “absolutely not.”</p>
<p>Pyne also rejected the suggestion the government was on the ropes. In an obvious reference to Abbott and his supporters, Pyne said: “The polls are about 50-50 and there’s a lot of hyperventilating going on, and there’s a few people I think who are trying to put the band back together from the late 2000s, noughties.”</p>
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Read more:
<a href="https://theconversation.com/grattan-on-friday-malcolm-turnbulls-neg-remains-in-snake-infested-territory-101688">Grattan on Friday: Malcolm Turnbull's NEG remains in snake-infested territory</a>
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<p>Finance minister Mathias Cormann said he had not heard any talk of some conservatives urging Dutton to challenge.</p>
<p>Cormann, a fellow conservative who is close to Dutton and said they had had four walks this week at 5.30 am, told Sky,: “We are both very committed to the success of the Turnbull Government and to winning the next election.</p>
<p>"We strongly support the Turnbull leadership of course and we want to see the Coalition government successfully re-elected early next year when the election is due.”</p>
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Read more:
<a href="https://theconversation.com/the-national-energy-guarantee-is-a-flagship-policy-so-why-hasnt-the-modelling-been-made-public-100754">The National Energy Guarantee is a flagship policy. So why hasn't the modelling been made public?</a>
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<p>The prices package would be based on recommendations made in the recent report of the Australian Competition and Consumer Commission.</p>
<p>The government has been briefing that Turnbull is willing to take a “big stick” to companies to ensure consumers get better deals.</p>
<p>The government is looking at cracking down on how companies bid into the wholesale electricity market and secret contracts between different players.</p>
<p>There would be closer scrutiny of energy companies buying and selling electricity internally between their own generation and retail companies at inflated prices.</p>
<p>This would put the contracts of “gentailers” under attention to ensure transfer prices did not disadvantage consumers. The ACCC said high transfer prices “raise concerns about the potential for substantial profit to be allocated to the wholesale businesses.” </p>
<p>The ACCC has also urged more transparency on direct contracts between retailers and individual generators, proposing these be put on a public register.</p>
<p>Among other changes being discusssed are:</p>
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<li><p>providing the Australian Energy Regulator (AER) with powers to deal with manipulation of the wholesale market.</p></li>
<li><p>requiring the reporting and disclosing of over-the-counter trades (in a de-identified format) to make available important market information.</p></li>
<li><p>expanding the AER wholesale market monitoring functions to include monitoring, analysing and reporting on the contract market.</p></li>
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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>Prime Minister Malcolm Turnbull has back away from a plan to enshrine a target to reduce carbon emission in the National Energy Guarantee.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1017322018-08-17T03:14:44Z2018-08-17T03:14:44ZVIDEO: Michelle Grattan on the NEG showdown and a ray of parliamentary unity after Fraser Anning’s racist speech<figure>
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<p>Michelle Grattan speaks with University of Canberra Vice-Chancellor Deep Saini about the week in Australian politics. They discuss the next hurdles in legislating the National Energy Guarantee now that it has passed the party room, cross-bench Senator Fraser Anning’s racist maiden speech, and the unified reaction from parliament in condemning it.</p><img src="https://counter.theconversation.com/content/101732/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>Michelle Grattan speaks with Deep Saini about the week in Australian politics.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1016882018-08-16T10:33:16Z2018-08-16T10:33:16ZGrattan on Friday: Malcolm Turnbull’s NEG remains in snake-infested territory<p>Malcolm Turnbull had a party-room victory but a god-awful week, and it wasn’t because his approval plunged in Monday’s <a href="https://www.theaustralian.com.au/national-affairs/newspoll/newspoll-turnbulls-popularity-plunges-in-wake-of-super-saturday/news-story/173bc47190e6c539412be241b15047c2">Newspoll</a>. His energy policy is back in the mire, and Tony Abbott is being – as one colleague neatly describes it – the agent of chaos.</p>
<p>It’s nearly unimaginable how the Coalition chooses to replay that old self-destructive record. In Bill Shorten’s office they’ve been digging out the 2009 headlines, such as “Battered Turnbull faces mutiny” and “Abbott leaves leader in crisis”.</p>
<p>Well, Turnbull is not “in crisis” but things are quite a serious mess, as those who hate him, plus others who don’t, sharpen their attack in another round of the climate wars.</p>
<p>In Tuesday’s Coalition parties meeting, where Turnbull won strong support for his energy policy, several reserved their right to cross the floor on the emissions reduction legislation, and later more said they might do so. There was talk of up to ten.</p>
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Read more:
<a href="https://theconversation.com/turnbull-beats-abbott-over-neg-now-frydenberg-has-to-win-victoria-101523">Turnbull beats Abbott over NEG, now Frydenberg has to win Victoria</a>
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<p>Assistant minister Keith Pitt, from the Nationals, let rumours run that he might stand down from the frontbench to oppose the legislation (a cynical Nationals source said: “he’s made hollow threats before”).</p>
<p>Resources Minister Matt Canavan (also a National), asked in the Senate whether he’d attempted to persuade Pitt on the National Energy Guarantee, said he’d “tried to persuade all I’ve spoken to about the common sense of adopting” the NEG.</p>
<p>The Nationals’ federal council meets this weekend in Canberra, where there will be a lot of chatter about the NEG. Deputy Prime Minister Michael McCormack in his council address will emphasise the vital importance of lowering power prices – very safe ground – but given his divided ranks, he isn’t expected to come out with a passionate advocacy of the technology-neutral NEG. A motion on the council’s agenda calls on the government “to support the building of high-energy, low-emissions, coal-fired power stations”.</p>
<p>It’s one thing for backbenchers to talk about crossing the floor, quite another to do it. Turnbull is working hard on the rebels – though obviously not on Abbott – to try to bring them around.</p>
<p>They have wish lists, and Turnbull, the ultimate transactional politician, is seeking doable ways to mollify them. The government has already indicated it will accept the Australian Competition and Consumer Commission’s recommendation to underwrite new dispatchable power projects.</p>
<p>On Thursday night a senior source said Turnbull was considering “heavy-handed intervention” to bring down prices. “The prime minister is not afraid to pull out the big stick on electricity companies if that’s what it takes,” the source said.</p>
<p>The stakes are clear. If everything went pear-shaped and there were enough floor-crossers in the House of Representatives to sink the package’s emissions reduction legislation, that would effectively (though not literally) amount to a vote of no confidence in the prime minister.</p>
<p>Hard to imagine, and probably only Abbott is thinking that far ahead. When other dissidents contemplate what could happen, some can be expected to fold on that ground alone.</p>
<p>Meantime, things fray as pressure mounts.</p>
<p>Take Peter Dutton’s Thursday <a href="https://www.2gb.com/peter-dutton-insists-hes-a-team-player-and-wont-bag-the-prime-minister-out/">interview</a> with 2GB’s Ray Hadley. Hadley challenged Dutton over the energy policy, demanding to know, “Are you blindly loyal [to Turnbull]?” Instead of mounting a full-throttle defence of the policy, Dutton said he gave frank advice in private as a member of the cabinet and didn’t bag out colleagues or the prime minister publicly. This just left a question mark over what Dutton actually thinks about the policy.</p>
<p>Turnbull is up against multiple obstacles, apart from the insurgents.</p>
<p>He needs to get the states and the ACT onboard for the NEG, but the Victorian Labor government has a particular interest in procrastinating, and may do so until it goes into caretaker mode in October. It is judging what’s best for itself electorally, especially given its battle with the Greens in Melbourne’s inner metropolitan electorates.</p>
<p>Impatient as the federal government is to get finality on the NEG, it could be risky for it to press the Victorians too hard before the November state election. That might just increase the chances of a firm “no”. As one federal source says, Victoria needs to be accorded some space.</p>
<p>After the state election, things would be easier. If the government changed in Victoria, the new administration would sign up. If Labor was returned – and had left open its position on the NEG during the campaign – it might be more readily persuaded to fall into line.</p>
<p>Then there is federal Labor. It is generally thought the government will need ALP support to pass the emissions reduction legislation in the Senate, and defections could mean Labor was needed in the lower house too.</p>
<p>The argument has gone: Labor would try to amend the emissions reduction target in the legislation but, assuming that failed, it could then pass the legislation in order to take the climate/energy issue off the 2019 election agenda. That would leave a Shorten government able to increase the target later.</p>
<p>If Labor sees Turnbull being wounded by the internal battle, however, it would have every incentive to hold out on the emissions legislation, leaving the prime minister unable to deliver it.</p>
<p>Another set of players in Turnbull’s energy problems comprise the media shouters: Alan Jones, Hadley, Peta Credlin, Andrew Bolt.</p>
<p>They direct their megaphones to the so-called Coalition “base” and their messages resonate particularly with the Liberal National Party’s grass roots in Queensland. This makes some backbenchers nervous, inclining them (in one description) to “virtue signal” to the base.</p>
<p>Coalition backbenchers generally, increasingly frightened for their seats, are caught in a swirl of pressures and emotions. Some are angry at Abbott. Some look for an unrealistic nirvana, where prices suddenly plunge in time for the election.</p>
<p>Some just want the NEG out of the way, a policy in the kit bag, whatever they think of it. NSW Liberal senator Jim Molan, who describes the NEG as “sub-optimal” told Sky he supported the package on the basis that “we’ve got to focus on getting re-elected”, noting: “I’ve spent all my life making rubbish policy work.” An endorsement of sorts.</p><img src="https://counter.theconversation.com/content/101688/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>If there were enough floor-crossers to sink the package’s emissions reduction legislation, that would effectively (though not literally) amount to a vote of no confidence in the Prime Minister.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1015192018-08-14T20:31:11Z2018-08-14T20:31:11ZThe renewable energy train is unstoppable. The NEG needs to get on board<p>On the face of it, the <a href="https://theconversation.com/infographic-the-national-energy-guarantee-at-a-glance-85832">National Energy Guarantee (NEG)</a>, adopted as Coalition policy at a <a href="https://theconversation.com/turnbull-beats-abbott-over-neg-now-frydenberg-has-to-win-victoria-101523">party room meeting yesterday</a>, appears to promise the certainty that industry, consumers and experts have desperately sought for the past decade. But beware: there is a renewable energy train coming down the track that is unstoppable.</p>
<p>The NEG cannot stop the train, but it could act as a guide rail to steer it – or even safely accelerate it - by reducing investment risk and lowering the cost of finance for renewable energy projects.</p>
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<a href="https://theconversation.com/turnbull-beats-abbott-over-neg-now-frydenberg-has-to-win-victoria-101523">Turnbull beats Abbott over NEG, now Frydenberg has to win Victoria</a>
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<p>The <a href="http://www.cleanenergyregulator.gov.au/RET/About-the-Renewable-Energy-Target/Large-scale-Renewable-Energy-Target-market-data#progress">latest figures</a> indicate that the renewable energy train will smash Australia’s <a href="http://www.environment.gov.au/climate-change/government/renewable-energy-target-scheme">2020 Renewable Energy Target</a>. Assuming that the current pace of renewable energy investment continues (and there is good reason to expect that it will, given the unarguable economics of <a href="https://theconversation.com/solar-is-now-the-most-popular-form-of-new-electricity-generation-worldwide-81678">plummeting renewable energy prices worldwide</a>), then the electricity sector would be on track to hit the government’s 26% emissions reduction target by 2030 with virtually no policy help at all.</p>
<p>The unstoppable renewable energy train may even end up contributing the lion’s share of the reductions needed to achieve Australia’s <em>economy-wide</em> target of cutting emissions by 26-28% relative to 2005 levels by 2030.</p>
<p>This would particularly be the case if we ramped up the electrification of other sectors such as transport and industry, and encouraged householders to replace gas with electricity for heating and cooking.</p>
<p>The big issue then would be whether the rest of the electricity system can adapt quickly enough as renewable energy reaches 50% and <a href="https://theconversation.com/the-electricity-sector-needs-to-cut-carbon-by-45-by-2030-to-keep-australia-on-track-80883">above</a>. This would call for significant grid upgrades and <a href="https://theconversation.com/with-battery-storage-to-the-rescue-the-kodak-moment-for-renewables-has-finally-arrived-74819">storage systems</a>, so as to provide efficient and reliable supply.</p>
<h2>Missing the train?</h2>
<p>With the NEG projected to deliver <a href="https://theconversation.com/infographic-the-national-energy-guarantee-at-a-glance-85832">no more than 36% renewable energy by 2030</a>, one could argue that this policy is simply waving from the platform as the renewables train goes whooshing by. But this argument ignores the impetus that the NEG would provide to advancing climate policy as a whole.</p>
<p>The NEG is widely regarded by energy analysts as the fourth-best solution – after a carbon pricing system, an emissions intensity scheme, or a clean energy target. But while many commentators have taken issue with both its <a href="https://theconversation.com/victoria-says-it-wont-sign-up-to-the-neg-without-concessions-101201">ambition</a> and its <a href="https://theconversation.com/could-the-neg-bring-down-power-prices-its-hard-to-be-confident-that-it-will-100965">effectiveness</a>, legislating the NEG would undeniably break the policy paralysis that has stopped Australia from moving forward for so many years.</p>
<p>There is no reason why a future government could not introduce other measures – such as an economy-wide price on carbon, regarded by most economists as the <a href="https://theconversation.com/ross-garnaut-qanda-there-is-no-doubt-australia-is-out-of-step-29099">most efficient way to combat climate change</a>. Such a scheme could be laid right over the top of the NEG and would drive further transformation not just of the electricity market, but every other sector of the economy. This would be complementary to the NEG and could help decarbonise the electricity sector even more rapidly.</p>
<p>Yet much of the <a href="http://www.abc.net.au/news/2018-08-13/abbott-joyce-spell-trouble-for-national-energy-guarantee/10114256">opposition</a> to the policy has come from government backbenchers concerned that it already puts too much emphasis on cutting emissions. How, then, can the NEG thread the political needle without being compromised as an effective tool for decarbonisation?</p>
<h2>Making the NEG better</h2>
<p>First, the mechanism itself needs to be decoupled from the ambition. That is, the politically charged emissions reduction target needs to be set not in legislation but by regulation, so that it can easily be used as a dial to tune the level of ambition.</p>
<p>Any future government could then ramp up the electricity sector’s emissions target beyond 26%. This could be done either to cover the inevitable shortfall in other sectors (where emissions reductions are harder to achieve), or to help deliver a steeper emissions-reduction trajectory if required by the world’s post-Paris progress. Bear in mind that signatories to the <a href="https://theconversation.com/the-paris-climate-agreement-at-a-glance-50465">Paris Agreement</a> have agreed to periodically review and tighten their emissions goals, meaning that Australia’s current target will probably be revised upwards.</p>
<p>Critics of this approach might argue that it provides less certainty to industry, rather than more. But the certainty would be established by the mechanism of emissions reductions rather than the rate. If that sounds hard to envisage, consider how financial institutions plan and prepare for changes to interest rates, within a broad economic regulatory framework. </p>
<p>A timetable for reviewing and adjusting emissions targets could be set in much the same way as the Reserve Bank of Australia handles interest rates, although this should perhaps be done on timeframes measured in years rather than months.</p>
<p>Second, the states need to be able to set their own renewable energy targets, independently of those states that currently have no target, such as New South Wales. One way to implement this would be for all states to agree to each comply with the minimum 26% target so there would be no free-riding on the back of those states that decide to be more ambitious than the national baseline.</p>
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Read more:
<a href="https://theconversation.com/emissions-policy-is-under-attack-from-all-sides-weve-been-here-before-and-it-rarely-ends-well-101103">Emissions policy is under attack from all sides. We've been here before, and it rarely ends well</a>
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<p>Whatever happens, the renewable energy train is building momentum, and the debates within COAG and with intransigent elements in the federal Coalition party room may end up being irrelevant in the long run. </p>
<p>But for the sake of our future, the resolution of climate and energy policy via the NEG will be an important baby step that helps to underpin the cost of decarbonising our entire economy. To do that, we must first pick the lowest-hanging fruit: the electricity sector.</p><img src="https://counter.theconversation.com/content/101519/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ken Baldwin receives funding from the Australian Research Council</span></em></p>Renewable energy investment is gathering steam throughout the world. Australia’s National Energy Guarantee policy should be made agile enough to jump on board, because this runaway train won’t stop.Ken Baldwin, Director, Energy Change Institute, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1015142018-08-14T20:27:12Z2018-08-14T20:27:12ZFractured Liberals need a new brand – ‘broad church’ is no longer working<p>Political parties wishing to win majority support in the pursuit of gaining control of government cannot afford to be tied too closely to a rigid ideology or set of views. They must accommodate a range of viewpoints and approaches to matters of public policy, even as they decide which policy to pursue.</p>
<p>In the case of the Liberal Party, former Prime Minister John Howard summed up this reality of political life with his description of the party as a <a href="https://www.theaustralian.com.au/national-affairs/federal-election-2016-howard-calls-for-calm-under-broad-church/news-story/299957cc57ba967d43a821636a72a96d">“broad church”</a> that married the conservative tradition exemplified by the Irish writer Edmund Burke with the liberalism of John Stuart Mill. </p>
<p>This formulation was vague enough to encompass a range of political positions, even if they were at odds with one another. The “broad church” ideal had a simple goal – ensure that all Liberals were inside the tent and shared a common outlook. </p>
<h2>The left-right divide</h2>
<p>In earlier days, the Liberal Party could define itself in terms of being “anti-Labor”. Labor sought an Australia based on national planning, abolishing the federal system and nationalising institutions such as the banks. The Liberals summed this up in one word: socialism.</p>
<p>The ALP increasingly adopted liberal principles, not just in economic terms as exemplified by the <a href="https://www.theguardian.com/commentisfree/2017/may/14/the-hawke-keating-agenda-was-laborism-not-neoliberalism-and-is-still-a-guiding-light">Hawke/Keating reforms</a>, but also in social matters. The party also dropped its traditional social conservatism; its last exponent was 1960s leader <a href="https://www.moadoph.gov.au/blog/the-day-the-alp-changed/">Arthur Calwell.</a></p>
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<a href="https://theconversation.com/can-the-liberal-party-hold-its-broad-church-of-liberals-and-conservatives-together-93575">Can the Liberal Party hold its 'broad church' of liberals and conservatives together?</a>
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<p>As the ALP “modernised” and jettisoned much of its earlier ideological baggage, the Liberal Party needed to find what is described these days as a new “brand”, and Howard’s “broad church” was a response to these changing circumstances. </p>
<p>In many ways, the “broad church” formulation of the Liberal brand is much weaker than “anti-socialism”. This may reflect the fact that the old left vs. right division, with its clear-cut understanding of politics in material terms, has largely ceased to be relevant.</p>
<p>In these circumstances, the possibility of conflict within the Liberal Party based on both values and interests becomes greater. For example, the issue of the <a href="http://www.abc.net.au/radionational/programs/drive/coalition-mps-divided-over-neg/9912318">National Energy Guarantee</a> cannot be conceptualised in traditional left/right terms.</p>
<p>The same is true of climate change in general. One of the biggest international critics of anthropogenic global warming is <a href="https://www.independent.co.uk/news/uk/politics/is-jeremy-corbyn-a-climate-change-sceptic-his-brother-suggests-he-could-be-a6760346.html">Piers Corbyn,</a> the brother of UK Labour leader Jeremy Corbyn, who considers “climate change” an attack by globalists on the working class.</p>
<p>The advocates of coal-fired power stations in the Coalition would seem to have more in common with Piers Corbyn and the values of Calwell’s Labor Party than with contemporary progressive liberalism. And from an old-style Labor perspective,
the focus in that party would be on prioritising cheap energy for the ordinary working person.</p>
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<a href="https://theconversation.com/christianity-does-not-play-a-significant-role-in-australian-politics-but-cultural-conservatism-does-78345">Christianity does not play a significant role in Australian politics, but cultural conservatism does</a>
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<p>What this suggests is that divisions about contemporary political issues are becoming increasingly difficult to comprehend with the ideological tools handed down to us from the past, and to do so is to paint a false picture. Of course, there are intellectual differences between those advocating for the increased use of renewable energy sources and those who wish to build new coal-fired power stations. There are also other interests involved of a more material kind.</p>
<p>Another issue currently being debated in parliament – whether to allow the territory governments to legalise euthanasia – is again not so much a left/right issue as a liberal/conservative one. I think it would be true to say that such a bill would have horrified the Labor party of the 1950s, especially given the significant number of Catholics in its ranks.</p>
<p>The Coalition is now the home of social conservatism in the Australian parliament. Given the success of the same-sex referendum last year, one can only wonder if the tide is <a href="https://www.theaustralian.com.au/national-affairs/john-howard-joins-tony-abbott-in-campaigning-against-samesex-marriage/news-story/d7cae3da2446598abb26b5ee4fe7596e">flowing against them</a> also on euthanasia.</p>
<h2>Evolving for the modern political age</h2>
<p>It may be possible to conclude that the Liberal reformulation of its brand in terms of the “broad church” model is limited by the way in which Australian politics in the 21st century has been evolving. The reason: the “broad church” model paints politics in what are largely 19th century terms.</p>
<p>The ALP has claimed at least some of the heritage of <a href="https://mises.org/library/john-stuart-mill-and-new-liberalism">John Stuart Mill</a> as expressed in contemporary liberal progressivism. The party has left the conservative working class behind. In so doing, they seem to have created a much stronger brand.</p>
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<a href="https://theconversation.com/australian-liberalism-old-and-new-15692">Australian liberalism old and new</a>
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<p>The Liberals, on the other hand, have perhaps created a rod for their own backs. They have a liberal progressive wing, exemplified by Malcolm Turnbull, and a conservative wing, exemplified by Tony Abbott. On matters where the ALP are unified, the Liberals are divided. </p>
<p>One reason for this division is the heterogeneity of the current Liberal Party and its support base. It can longer define itself as being “anti-socialist”. The “broad church” brand was an attempt to turn that heterogeneity into unity, but it may have only papered over the cracks. This reflects the ideological muddle of 21st century politics.</p>
<p>Modern-day Australia imposes certain realities on political parties. The most important one is that the important public policy issues of the day go beyond old-fashioned left/right characterisations. </p>
<p>Political parties need to be nimble and agile if they are to escape from the labels of a past age. Otherwise, they will continue to repeat the errors of recent years.</p><img src="https://counter.theconversation.com/content/101514/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Gregory Melleuish receives funding from the Australian research Council. He is a member of the Academic Advisory Board of the Menzies Research Centre.</span></em></p>The Liberals once tried to build a big tent to include a range of political positions. Recent conflicts over energy, same-sex marriage and euthanasia show this is no longer sustainable.Gregory Melleuish, Professor, School of Humanities and Social Inquiry, University of WollongongLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1013142018-08-09T20:13:05Z2018-08-09T20:13:05ZWhat’s your state’s position at the crucial National Energy Guarantee meeting?<p>State and territory energy ministers will hold a crucial meeting today with their federal counterpart Josh Frydenberg.</p>
<p>At stake is the future of the federal government’s flagship <a href="https://theconversation.com/infographic-the-national-energy-guarantee-at-a-glance-85832">National Energy Guarantee (NEG)</a>, which if implemented could finally end Australia’s long-running uncertainty over climate and energy policy.</p>
<p>The policy has <a href="https://theconversation.com/emissions-policy-is-under-attack-from-all-sides-weve-been-here-before-and-it-rarely-ends-well-101103">attracted criticism from a range of perspectives</a>, both for its perceived lack of climate ambition and its failure to placate pro-coal backbenchers. Energy analysts, meanwhile, have taken issue with the <a href="https://theconversation.com/the-national-energy-guarantee-is-a-flagship-policy-so-why-hasnt-the-modelling-been-made-public-100754">lack of publicly released modelling</a>, and <a href="https://theconversation.com/could-the-neg-bring-down-power-prices-its-hard-to-be-confident-that-it-will-100965">raised questions</a> over its ability to drive down emissions and prices.</p>
<p>However, the policy has been endorsed by the majority of the energy industry, including smaller retailers and the <a href="https://www.cleanenergycouncil.org.au/policy-advocacy/national-energy-guarantee.html">Clean Energy Council</a>, the major body representing the renewable energy sector. Further support has come from energy consumers and their representative associations. A number of these stakeholders share the concern about the emissions target, but have argued that the COAG Energy Council should focus on the NEG framework and that emissions policy should be left to the Commonwealth government and parliament. </p>
<h2>What’s being decided?</h2>
<p>The implementation of the NEG requires two legislative outcomes. The first is Commonwealth legislation to set a target for emissions reduction in the national electricity sector and address associated issues such as the use of offsets and the treatment of energy intensive, trade-exposed activities. </p>
<p>The second is legislation to alter the National Electricity Law to accommodate the two obligations imposed by the NEG. This law covers the states (Queensland, New South Wales, Victoria, Tasmania and South Australia) and the ACT that are part of the National Electricity Market, and is required to be passed by the South Australian parliament.</p>
<p>The COAG Energy Council will be asked to support the NEG as contained in a series of reports from the Energy Security Board. If this is successful, the final stage will be to prepare, agree on and then pass the legislation through the SA parliament.</p>
<p>In parallel, the federal government will seek to prepare and pass the emissions reduction legislation. One challenge for federal energy minister Josh Frydenberg is to coordinate the two legislative processes to accommodate those on both sides of the climate change debate, who are suspicious of one another.</p>
<p><strong>Every state and territory finds itself in a different position, both politically and logistically, with regard to the NEG. See below for a detailed breakdown of each state’s energy landscape and the likelihood that it will support the federal government’s policy.</strong></p>
<p><iframe id="tc-infographic-289" class="tc-infographic" height="400px" src="https://cdn.theconversation.com/infographics/289/7e812e126e20086a7f4276c7f23a951524ea80bc/site/index.html" width="100%" style="border: none" frameborder="0"></iframe></p><img src="https://counter.theconversation.com/content/101314/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tony Wood 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>As energy ministers head into a crucial meeting with their federal counterpart Josh Frydenberg, our state-by-state guide compares their various stances on the future of the National Energy Guarantee.Tony Wood, Program Director, Energy, Grattan InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1012572018-08-08T05:46:19Z2018-08-08T05:46:19ZPolitics podcast: Barnaby Joyce at his provocative best<p>Barnaby Joyce has confirmed he could cross the floor on the federal legislation associated with the National Energy Guarantee. “Of course I could,” he says in an interview with The Conversation. </p>
<p>Joyce is out on the author’s circuit for his just-released book Weatherboard and Iron, which reprises the personal saga that took him from deputy prime minister to backbencher, as well as canvassing life in Canberra and policy issues.</p>
<p>On the NEG, he says in this podcast: “If it comes back from COAG and it’s absolutely untenable in regards to what happens to power prices and it forces even more misery onto people that can no longer afford power then I think you’re almost duty bound to leave that option [crossing the floor] up your sleeve.” </p>
<p>Asked whether the government should ditch its tax cuts for big business if it cannot get them through the Senate, Joyce says: “To be quite frank I’ve probably got a different view than some of my colleagues, in that I look at the company tax cuts and I say, well we have to also be internationally competitive.”</p>
<p>Provocatively, Joyce says the Nationals should run a candidate in the NSW Labor held seat of Eden-Monaro - which would mean contesting against a Liberal contender.</p>
<p>On future aspirations, Joyce makes it clear he would like to return to the frontbench after the election. “If I was offered that I would never knock it back,” he said. “In politics you should try to get to the point of most effect – because that’s how you bring the best outcome”.</p><img src="https://counter.theconversation.com/content/101257/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>Barnaby Joyce has confirmed he could cross the floor on the federal legislation associated with the National Energy Guarantee. “Of course I could,” he says.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1011032018-08-06T19:41:37Z2018-08-06T19:41:37ZEmissions policy is under attack from all sides. We’ve been here before, and it rarely ends well<p>Federal energy minister Josh Frydenberg is battling to steer a course for his <a href="https://theconversation.com/infographic-the-national-energy-guarantee-at-a-glance-85832">National Energy Guarantee (NEG)</a> through choppy political waters, ahead of a crucial meeting this Friday on whether to adopt the policy.</p>
<p>Since 2014 and the <a href="https://theconversation.com/obituary-australias-carbon-price-29217">demise of Julia Gillard’s carbon pricing scheme</a>, Australia has been in a well-documented period of policy paralysis (although “mayhem” may be more accurate). Former prime minister Tony Abbott signed off on a 26-28% emissions reduction target to take to the 2015 Paris climate summit (despite <a href="https://www.theguardian.com/australia-news/2018/jun/19/tony-abbott-tells-party-he-was-misled-by-advisers-over-paris-climate-deal">later claiming to have been misled by his advisors</a>), and his successor Malcolm Turnbull ratified it as part of the resulting global treaty.</p>
<p>In late 2016, Frydenberg’s suggestion that an <a href="https://theconversation.com/turnbull-government-rules-out-an-emissions-intensity-scheme-70039">emissions intensity scheme</a> could help meet the target survived for a mere 24 hours before <a href="https://www.news.com.au/national/government-rules-out-carbon-pricing-after-internal-revolt/news-story/31748dca4d2df5a965b2b0bebb50e98e">dying in a Sydney fish market</a>. Next, the Clean Energy Target <a href="https://theconversation.com/the-finkel-review-at-a-glance-79177">proposed by chief scientist Alan Finkel</a> proved too hard for the Coalition to get behind. </p>
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<a href="https://theconversation.com/turnbull-has-politicked-himself-into-irrelevance-on-energy-and-climate-in-2018-89368">Turnbull has politicked himself into irrelevance on energy and climate in 2018</a>
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<p>Now we have the NEG, which is on the table at a crunch meeting of the COAG Energy Council on Friday. The table may yet become a chopping block. The policy will only get the nod if the federal government can get the states and territories on board, and then steer the resulting agreement through the Coalition party room. Frydenberg is caught between a rock and a hard-right place.</p>
<p>The ACT government is not a NEG fan, but doesn’t have veto power. Victoria’s Labor government <a href="https://theconversation.com/victorian-labor-government-shapes-up-to-canberra-over-neg-101089">does</a>, and what’s more, it is facing a battle for survival at this year’s state election. Backing the NEG and its modest emissions targets could mean surrendering seats to the Greens. Activist groups <a href="https://www.afr.com/news/getup-greenpace-urge-labor-states-to-reject-neg-20180803-h13ifp">Greenpeace and GetUp! are also running anti-NEG adverts in Queensland</a>, and the latter would presumably welcome an opportunity to shake off its reputation as a Labor stooge. Victoria and Queensland have pledged <a href="https://www.theaustralian.com.au/national-affairs/annastacia-palaszczuk-torpedoes-josh-frydenbergs-neg-deal/news-story/90e4ed3710d57fe126044ac03a5be783">not to sign up to the policy</a> until it gets a tick from the Coalition party room.</p>
<p>To do that, Frydenberg will have to fend off the hard right <a href="https://theconversation.com/the-pro-coal-monash-forum-may-do-little-but-blacken-the-name-of-a-revered-australian-94329">Monash Forum</a> types who are threatening a backbench mutiny. One of the more jaw-dropping stunts was Nationals MP George Christensen’s <a href="https://www.townsvillebulletin.com.au/news/george-christensen-seeks-japanese-cash-for-power-station/news-story/19a83d54de24600580b9453ec09d9369">visit to Japan</a> in search of new money for coal power. </p>
<p>To try and cut through the politics, energy policy analysts have <a href="https://theconversation.com/the-national-energy-guarantee-is-a-flagship-policy-so-why-hasnt-the-modelling-been-made-public-100754">demanded</a> that the government release the modelling that underpins the NEG, while also <a href="https://theconversation.com/could-the-neg-bring-down-power-prices-its-hard-to-be-confident-that-it-will-100965">pointing to its shortcomings</a> as a tool to drive down both emissions and prices. </p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/the-national-energy-guarantee-is-a-flagship-policy-so-why-hasnt-the-modelling-been-made-public-100754">The National Energy Guarantee is a flagship policy. So why hasn't the modelling been made public?</a>
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<p>It’s easy to get caught up in the horse race. But as is so often the case with climate policy, we’ve been here before – specifically in 1994-95, under the Keating government. History doesn’t repeat, but she rhymes.</p>
<p>In 1992 Australia had signed and ratified the United Nations Framework Convention on Climate Change (UNFCCC) – the treaty that underpins the UN climate negotiations. But it quickly became clear that Australia’s <a href="http://www.austlii.edu.au/au/journals/AUMPLawJl/1997/48.pdf">National Greenhouse Response Strategy</a>, containing only voluntary measures, wouldn’t drive emissions reductions. Indeed, emissions grew, and new coal-fired power stations were approved.</p>
<p>In early 1994, environment minister Ros Kelly resigned over the “<a href="https://en.wikipedia.org/wiki/Sports_rorts_affair">sports rorts</a>” scandal, and Graham Richardson briefly returned to the portfolio before then being replaced by John Faulkner from the New South Wales Labor left faction.</p>
<p>Faulkner started talking about a carbon tax, not so much to reduce emissions but to support research and development into renewable energy. This was something that the Australian Conservation Foundation, the Democrats and the newly formed Australian Greens had all been pressing for. It was also something tangible and credible for Australia to bring to the first UNFCCC conference, in <a href="https://en.wikipedia.org/wiki/United_Nations_Climate_Change_conference#1995:_COP_1,_Berlin,_Germany">Berlin in March 1995</a>.</p>
<p>Industry was not happy, and coordinated its response through a relatively new group called the <a href="http://aign.net.au/about/">Industry Greenhouse Network</a>. The main PR effort involved a flurry of well-timed economic modelling, given to carefully chosen journalists, purporting to show that the economic sky would fall if any carbon tax were introduced.</p>
<p>Faulkner eventually realised he just didn’t have the numbers to get his tax through cabinet, and withdrew it. Instead, industry’s preferred (and purely voluntary) scheme was launched shortly thereafter. Called the Greenhouse Challenge, it was widely derided, with one industry figure <a href="https://trove.nla.gov.au/work/14840867?q&versionId=46205424">describing it</a> as “a bit more paperwork but if it helps us avoid carbon taxes or more regulations, it’s worthwhile”.</p>
<p>Nevertheless, the policy survived the transition to the Howard government, where for many years it served as a stab vest to deflect criticism over a lack of climate policy ambition.</p>
<h2>Policy lock-in?</h2>
<p>Energy and climate researchers sometimes warn of “<a href="https://en.wikipedia.org/wiki/Carbon_lock-in">carbon lock-in</a>” – the self-perpetuating inertia created by large fossil fuel-based energy systems that inhibits public and private efforts to introduce alternative energy technologies.</p>
<p>One element of carbon lock-in – besides habit, inertia and <a href="https://www.nytimes.com/interactive/2018/08/01/magazine/climate-change-losing-earth.html">human nature</a> – is the capture of policy processes by incumbents, with a kind of low-ambition policy lock-in. This makes it much harder to ramp up ambition when a new government arrives.</p>
<p>Some critics of the NEG have <a href="https://www.theguardian.com/australia-news/2018/aug/04/dear-cynics-and-fools-australias-had-jack-of-your-taxpayer-funded-failure-on-energy">suggested</a> that it could be improved by making its emissions target flexible and adaptable by future policy-makers. But the more ground Frydenberg gives on this, the more likely he is to be mauled by his party-room colleagues.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/could-the-neg-bring-down-power-prices-its-hard-to-be-confident-that-it-will-100965">Could the NEG bring down power prices? It's hard to be confident that it will</a>
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<p>Climate change has often been described as a “<a href="https://en.wikipedia.org/wiki/Wicked_problem">wicked problem</a>” – one that is difficult or impossible to solve because of incomplete, contradictory, and changing requirements that are often difficult to recognise.</p>
<p>More recently, it has graduated to “<a href="https://link.springer.com/article/10.1007%2Fs11077-012-9151-0">super-wicked</a>” status –
an acknowledgement that time is running out, there is no central authority, those seeking to solve the problem are also causing it, and policies habitually discount the future in favour of preserving our economic present.</p>
<p>We didn’t “solve” climate change 20 years ago, when it was merely wicked. We are less likely to solve it now that it has grown harder as well as more urgent. As the allegedly ancient <a href="https://quoteinvestigator.com/2015/12/18/live/">Chinese curse</a>
goes, “may you live in interesting times”. Josh Frydenberg certainly will this week.</p><img src="https://counter.theconversation.com/content/101103/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>The National Energy Guarantee faces a crunch test this week. And if the climate wars of the past few decades are any guide, Australian policies more often sink than swim when the waters get choppy.Marc Hudson, PhD Candidate, Sustainable Consumption Institute, University of ManchesterLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1009652018-08-03T23:35:35Z2018-08-03T23:35:35ZCould the NEG bring down power prices? It’s hard to be confident that it will<p>The <a href="http://www.coagenergycouncil.gov.au/publications/energy-security-board-%E2%80%93-final-detailed-design-national-energy-guarantee">final design document</a> for the <a href="https://theconversation.com/infographic-the-national-energy-guarantee-at-a-glance-85832">National Energy Guarantee (NEG)</a>, released this week, contains a range of claims about the policy’s ability to drive down both greenhouse emissions and electricity prices. But still there is precious little detail on how exactly these assertions are backed up.</p>
<p>Specifically, two claims in the new document released by the Energy Security Board (ESB) are difficult to reconcile with other reputable modelling results. </p>
<p>First is the claim that greenhouse emissions will fall further under the NEG than they would in the policy’s absence. But a <a href="https://www.aemo.com.au/Electricity/National-Electricity-Market-NEM/Planning-and-forecasting/Integrated-System-Plan">fine-grained analysis</a> published a week earlier by the Australian Energy Market Operator (AEMO) suggests that the target of cutting emissions by 26% will be met regardless of whether the NEG is implemented or not. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/230538/original/file-20180803-41351-ln55jf.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/230538/original/file-20180803-41351-ln55jf.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/230538/original/file-20180803-41351-ln55jf.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=572&fit=crop&dpr=1 600w, https://images.theconversation.com/files/230538/original/file-20180803-41351-ln55jf.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=572&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/230538/original/file-20180803-41351-ln55jf.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=572&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/230538/original/file-20180803-41351-ln55jf.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=719&fit=crop&dpr=1 754w, https://images.theconversation.com/files/230538/original/file-20180803-41351-ln55jf.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=719&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/230538/original/file-20180803-41351-ln55jf.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=719&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The ESB predicts that emissions will fall further under the NEG (purple line) than without it (orange line). But according to the AEMO’s forecast (blue line), emissions will drop by more than this, even without the NEG. NEG modelling data are approximate, derived from measuring graphics provided in the ESB report.</span>
<span class="attribution"><span class="source">Hugh Saddler</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>If the AEMO analysis is right, the NEG in its currently proposed form will do nothing to cut emissions.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/aemos-new-electricity-plan-is-neither-a-death-knell-nor-a-shot-in-the-arm-for-coal-100096">AEMO's new electricity plan is neither a death knell nor a shot in the arm for coal</a>
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<p>The second claim is that wholesale electricity prices will fall by a further 20% under the NEG. But it is hard to see how this will happen, given that the policy is not expected to trigger large changes to the energy landscape. The ESB’s document provides no raw data on this, but if we squint hard at the graphs provided in its modelling summary, we get the following:</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/230548/original/file-20180803-41366-2frru6.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/230548/original/file-20180803-41366-2frru6.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/230548/original/file-20180803-41366-2frru6.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=354&fit=crop&dpr=1 600w, https://images.theconversation.com/files/230548/original/file-20180803-41366-2frru6.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=354&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/230548/original/file-20180803-41366-2frru6.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=354&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/230548/original/file-20180803-41366-2frru6.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=444&fit=crop&dpr=1 754w, https://images.theconversation.com/files/230548/original/file-20180803-41366-2frru6.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=444&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/230548/original/file-20180803-41366-2frru6.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=444&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">Forecast changes to electricity generation capacity under the NEG. Modelling data are approximate, derived from measuring graphics provided in the ESB report.</span>
<span class="attribution"><span class="source">Hugh Saddler</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>This is not just a technical quibble. Much of the political justification for the NEG rests on the hope that it will deliver cheaper electricity. But how?</p>
<p>Taking the assumptions provided in the ESB’s document, we can attempt to deduce what will be the main drivers of price changes, in rough order of importance:</p>
<h2>Contract coverage</h2>
<p>The modelling assumes that contract coverage – electricity retailers and generators currently use electricity contracts to manage their exposure to fluctuating prices in the spot market – will increase by 5% under the NEG. </p>
<p>This is based on the notion that the NEG’s reliability requirement – which would require electricity retailers to hold an appropriate portfolio of electricity contracts in dispatchable sources of generation – would incentivise retailers to buy more electricity contracts.</p>
<p>Whether this would indeed drive an additional 5% of contract coverage is rather difficult to ascertain given the information provided. On the face of it, 5% seems a lot given that the reliability requirement is not expected to be triggered, noting that no reliability issues have been identified in the AEMC’s recent <a href="https://www.aemc.gov.au/markets-reviews-advice/reliability-standard-and-settings-review-2018">reliability standard and settings review</a> and that <a href="https://www.aemo.com.au/Electricity/National-Electricity-Market-NEM/Planning-and-forecasting/Integrated-System-Plan">even the base cases in AEMO’s Integrated System Plan</a> do not trigger reliability problems.</p>
<p>Even if contracting does increase by 5%, how does that push down prices? This is a crucial point and yet it is not backed up by adequate analysis or evidence in the ESB report. </p>
<p>The ESB’s chain of reasoning appears to be: the NEG will result in a greater share of electricity output being sold under contract in anticipation of the reliability requirements kicking in; this will lead to lower spot market prices; this in turn will also pull down prices in the contract markets, reducing average wholesale prices overall.</p>
<p>So it all hinges on retailers changing their wholesale purchasing habits so as to ensure they meet the reliability requirement – even though, as discussed above, the reliability requirement is unlikely to be triggered Moreover, it is hard to believe that contract prices would fall as a result; it seems just as likely that the generating companies that sell those contracts (and which wield significant market power) would raise their prices, not lower them.</p>
<h2>More renewables</h2>
<p>The ESB assumes that the NEG will deliver an extra 1,000 megawatts of renewable capacity.</p>
<p>But this is an assumption, rather than a modelled outcome. The only justification offered is the ESB’s assertion that “recent renewable investment trends have been in part supported by the likelihood of an agreement to implement the guarantee”.</p>
<p>This is surprising, given that the NEG’s emissions target is so weak as to be ineffective, and ESB’s assumption that the policy will drive down power prices (and therefore profits for renewables generators). Any direct incentive for investment in renewables is highly unlikely to be coming from the NEG; the only plausible reasons would be greater confidence and lower financing costs.</p>
<h2>Demand response</h2>
<p>Demand response – in which consumers alter their power consumption so as to reduce peaks in electricity demand in exchange for payment – can potentially make a big difference to power prices by reducing the incidence of high-price events. </p>
<p>The use of this strategy is already growing strongly among electricity market participants. But once again, the ESB has given us little evidence to back up its assumption that the no policy case will have lower demand response than under the NEG. It all again hinges on the effect of the reliability requirement on contract coverage and on the extent to which emerging demand response products can take advantage of this. Very little analysis and no evidence to back up the choice of assumptions is contained in the ESB’s policy document.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/baffled-by-baseload-dumbfounded-by-dispatchables-heres-a-glossary-of-the-energy-debate-84212">Baffled by baseload? Dumbfounded by dispatchables?
Here's a glossary of the energy debate</a>
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<h2>Financing cost</h2>
<p>The ESB assumes that the NEG will reduce the uncertainty premium - an additional amount required to finance projects in the face of policy uncertainty – by 3 percentage points. It is clear that a policy uncertainty premium currently exists, although it is unclear how high it might be. The Finkel Review assumed it is 3%. So does that mean investment uncertainty would completely disappear once the NEG is legislated?</p>
<p>Certainly not. Given the highly publicised political disagreements (even within the government’s own ranks) about the NEG’s emissions target, it seems likely that substantial policy uncertainty will still linger. </p>
<p>Regardless, this scarcely matters for the price outcomes modelled by the ESB, given that the model is predicting very little new electricity investment and the small amount of additional investment in the model attributed to the NEG is entirely assumption-driven, rather than a modelling outcome. </p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/the-national-energy-guarantee-is-a-flagship-policy-so-why-hasnt-the-modelling-been-made-public-100754">The National Energy Guarantee is a flagship policy. So why hasn't the modelling been made public?</a>
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<p>Overall, the latest policy details don’t inspire confidence that the NEG will actually drive down power prices relative to what will happen anyway. We need a credible analysis of these assumptions, and modelling to tease out the effect of varying them.</p>
<p>It is helpful that the final report by the ESB does include at least a summary of the modelling. From here, it would be useful for the ESB, and the modellers it hired, to provide an investigation of the issues we have outlined here, or to undertake one if this has not yet been done. </p>
<p>As per this week’s <a href="https://reneweconomy.com.au/open-letter-energy-ministers-release-neg-modelling-full-73162/">open letter from energy analysts</a> calling for the release of the modelling, independent researchers have <a href="https://www.theguardian.com/commentisfree/2018/aug/02/the-energy-guarantee-ruckus-shows-why-we-need-independent-policy-analysis">offered to provide peer review</a>. Let’s hope the ESB takes us up on it.</p><img src="https://counter.theconversation.com/content/100965/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Salim Mazouz receives client funding from various organisations in his role as Principal at NCEconomics, none of which influenced his contributions to this article. He provides independent research as part of the the Energy Transition Research Hub</span></em></p><p class="fine-print"><em><span>Frank Jotzo leads research grants including funding by the Australian government. He has no conflict of interest with regard to the issues discussed in this article. </span></em></p><p class="fine-print"><em><span>Hugh Saddler 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 final design of the National Energy Guarantee promises that the policy will drive down power prices. But there is precious little evidence for this assertion.Salim Mazouz, Research Manager, Centre for Climate Economics and Policy, Australian National UniversityFrank Jotzo, Director, Centre for Climate Economics and Policy, Crawford School of Public Policy, Australian National UniversityHugh Saddler, Honorary Associate Professor, Centre for Climate Economics and Policy, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1010282018-08-03T03:44:33Z2018-08-03T03:44:33ZVIDEO: Michelle Grattan on the government’s uphill battle with company tax cuts and the NEG<figure>
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<p>Michelle Grattan speaks to University of Canberra Deputy Vice-Chancellor Nicholas Klomp about the week in politics. They discuss the results from Super Saturday, the state of play on the company tax cuts, dissent from the states and backbenchers on the National Energy Guarantee, and the future of Labor backbencher Emma Husar after allegations of questionable conduct.</p><img src="https://counter.theconversation.com/content/101028/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>Michelle Grattan speaks to Nicholas Klomp about the week in politics.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1009832018-08-02T11:27:05Z2018-08-02T11:27:05ZGrattan on Friday: Dutton and Frydenberg struggle with the currents in shark-infested waters<p>Peter Dutton and Josh Frydenberg, both aged 47, are two of Malcolm Turnbull’s cabinet high flyers with dreams of eventually flying a lot higher.</p>
<p>Political life has been going very well for Dutton. He sits atop his mega home affairs portfolio. He’s open about his longer term leadership aspirations. But everything would crash if he lost his ultra-marginal Queensland seat of Dickson.</p>
<p>The 9-point drop in the LNP primary vote in adjacent Longman would have sent shivers up his spine. He already faces a massive “Ditch Dutton” GetUp campaign, in which 30,000 calls have been made so far to find out voters’ concerns, and 20 locals meet fortnightly to plan events.</p>
<p>Like Dutton, Frydenberg has plenty of ambition. Though he’s further down “future leader” lists, at present he has the government’s toughest policy job, trying to “land” the National Energy Guarantee (NEG).</p>
<p>As a key deadline looms next week, Frydenberg is surrounded by hostile forces stretching, bizarrely, across the political spectrum. Think Tony Abbott under the doona with the Victorian Andrews Labor government.</p>
<p>Dutton might be the tough man, the right wing ideologue, but he’s also pragmatic.</p>
<p>He opposed same-sex marriage, but pushed for the postal vote that delivered it. He just wanted the issue settled. So it’s unsurprising he appeared to signal this week that if the tax cuts for big business can’t be legislated in the next parliamentary sitting, they should be off the agenda.</p>
<p>The government needed to “negotiate in good faith” with the senators, he told the Seven Network. If that failed his advice was, “we shouldn’t give [Bill Shorten] the ammunition to try and strike back against us”.</p>
<p>A couple of days later, under an extraordinary <a href="https://www.2gb.com/i-hope-one-day-you-can-come-on-the-program-and-say-what-you-really-think/">barrage</a> from 2GB’s shock jock Ray Hadley - “I hope one day you can come on the program and say what you really think” Hadley told the minister - Dutton was more constrained.</p>
<p>In government circles, the big business tax cuts have gone from being vital for Australian competitiveness to a serious political handicap that many in the Coalition are becoming desperate to be rid of.</p>
<p>As Treasurer Scott Morrison put it: “There are two issues here. It’s the right economic policy. The politics is a separate issue.” Indeed. </p>
<p>The trouble is, how does the government rationalise their ditching, after all ministers have said? How to recast the jobs and growth story? How to explain wilting under pressure, to the business community and to international investors, given Australia has a high corporate rate among OECD countries?</p>
<p>And will voters, already distrustful, be cynical? Will a backflip solve the problem with them?</p>
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<strong>
Read more:
<a href="https://theconversation.com/video-michelle-grattan-on-the-governments-uphill-battle-with-company-tax-cuts-and-the-neg-101028">VIDEO: Michelle Grattan on the government's uphill battle with company tax cuts and the NEG</a>
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<p>The leading “true believer” on business tax policy is Finance Minister Mathias Cormann, who in the wake of the byelections continues to ring and text the crossbench. One crossbench staffer likens Cormann to the child begging for an ice cream - he’s constantly tugging at the senators’ sleeves.</p>
<p>The government may end up willing to compromise, by excluding the giant companies from the cut – that is the banks, which have become the bogeymen, although other companies would be caught. But if it did that, winning support from, for example, Victorian crossbencher Derryn Hinch, it could lose Liberal Democrat David Leyonhjelm.</p>
<p>Meanwhile, the media are like sleeve-tugging kids too, pursuing ministers with awkward questions about the policy’s future. Yet with parliament not meeting until the week after next, this hiatus will continue a while.</p>
<p>More immediately, the government is on edge over the NEG. The federal, state and territories’ Council of Australian Governments energy council meets on Friday of next week to agree to the details of the mechanism – or not. If it did, the federal legislation for emissions reductions would be put to the Coalition party room the following Tuesday. After that, if all went well, the COAG energy council would give the final tick off.</p>
<p>Last minute obstacles loom, although whether they will be serious, even disastrous, or just inconvenient remains to be seen.</p>
<p>This week Victorian energy minister Lily D'Ambrosio declared her state wouldn’t “rush into” signing up to the NEG, and questioned the federal Coalition party room’s support.</p>
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Read more:
<a href="https://theconversation.com/victorian-minister-plays-hardball-with-turnbull-on-the-neg-100775">Victorian minister plays hardball with Turnbull on the NEG</a>
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<p>The government desperately needs the NEG and the associated narrative on power prices settled for next year’s election, but a more immediate election is intruding.</p>
<p>The Andrews government, facing the people in November, is under immense pressure from GetUp and the environment lobby not to sign up next week. GetUp has had ads running in Victoria and Queensland against Turnbull’s “dirty power plan”; Victorian ministers and backbenchers will receive a barrage of calls, with state cabinet meeting on Monday.</p>
<p>Now the Labor governments in Victoria, Queensland and the ACT are set to ratchet up demands to make the NEG plan “greener” - which would run right into the Abbott naysayers in the federal Coalition party room.</p>
<p>The Labor jurisdictions might agree to progress the NEG but make endorsing the needed state legislation contingent on their demands being met.</p>
<p>The hit Turnbull has taken to his authority from Super Saturday emboldens Abbott and his allies. As soon as modelling for the NEG was released on Wednesday Abbott <a href="https://www.2gb.com/this-is-just-wrong-tony-abbott-disputes-claims-neg-will-lower-power-prices/">slammed</a> it. “Pigs might fly”, he said to the suggestion the scheme would bring down prices. “This is just wrong, it’s completely implausible, it’s utterly incredible”.</p>
<p>The NEG “still needs an enormous amount of work,” he declared.</p>
<p>From the government’s point of view, the fate of the NEG is more important than that of the company tax cuts. As Dutton said on Thursday, “energy is the most important issue at the moment”.</p>
<p>If the big business tax cuts have to be jettisoned, that will dent the government’s economic credibility; the policy’s supporters will say it would have consequences for investment (Labor would dispute this).</p>
<p>But if the NEG is stymied, the investment consequences would be major because there is no suggestion the government has a fallback plan.</p>
<p>If Turnbull were hit with a double whammy – having to abandon the company tax cuts and unable to get the NEG – that would be a serious policy flunk.</p>
<p>The next few weeks will test whether Frydenberg can gain that moniker Christopher Pyne claimed but couldn’t grasp - “the fixer”.</p><img src="https://counter.theconversation.com/content/100983/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>If Turnbull were hit with a double whammy – having to abandon the company tax cuts and unable to get the NEG – that would be a serious policy flunk.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.