Let me dwell on the first para of this story in the AFR today titled, Abbott’s plan to axe RET:
The federal government is moving towards abolishing the Renewable Energy Target rather than scaling it back in a move that will cost almost $11 billion in proposed investment and which is at odds with the views of its own Environment Minister.
Let’s parse this sentence bit by bit.
Scaling back the RET is described as “a move that will cost almost $11 billion in proposed investment”. “Investment” is one of those hurrah words so that anything that can be described as investment is automatically given a warm reception. What cutting the RET will actually do is cut almost $11 billion dollars of waste. Eleven bil on more windmills and solar panels would not get you back ten cents in the dollar. Stopping such expenditure dead in its tracks will only promote future economic growth, or at least it will if the government doesn’t decide to spend the money itself in some other totally useless way.
The second bit is that this decision “is at odds with the views of its own Environment Minister”. This, alas, is one of the great problems with the Coalition. It really is a coaltion. Labor is too, but it’s a coalition of the left, the far left and the loony left, each branch of which could comfortably fit into the Greens. The Coalition is made up of conservatives, small-l liberals, libertarians, the centre right and the centre left. The centre left as it happens overlaps the Labor left and could also comfortably fit into the Greens. The centre left is a very strong tail that wags the dog.
I, however, and most others who voted for the Coalition did not seek to preserve the Green legacy of economic ignorance, nor for that matter did we seek to maintain the Martin Parkinson/Ken Henry school of Keynesian economic mis-management.
Here is the message: DO NOT SPEND MONEY ON ANY SINGLE INVESTMENT THAT WILL NOT OF ITSELF AND ON ITS OWN PROVIDE A POSITIVE RETURN ON FUNDS EMPLOYED IN A REASONABLE PERIOD OF TIME (LET US SAY THE NEXT THREE YEARS). If you can’t see a return, and prove it in a published cost-benefit study, don’t do it.
I don’t say you shouldn’t provide welfare. By all means provide welfare. Let us look after the sick, the aged and the disabled. But here, since the demands are near infinite, judicious allocations of funds will be required. But while welfare expenditures may be important for those who are unable to work or are too old to work, none of these expenditures will promote economic growth and future prosperity.
We do not have an infinite pool of productive resources. We must prioritise. Removing renewable energy targets is pure profit for the economy, a 100% benefit. So would getting rid of paid parental leave. Get rid of them both at once. I wish the NBN was also up for grabs since getting rid of it would also be a net positive.
And I should finally mention since I am throwing it all into the pot, do not raise taxes on anything in any part of the economy. If the kinds of revenues you are in receipt of are insufficient to pay for everything in the basket, then take some things out of the basket.
The Coalition’s Labor Left is a heavy burden that is weighing down good decision making.