Rudd's Massive New Tax on Wealth - CPRS

[Jimmy_041]

Electicity market claims power prices 'set to soar'

BEN PACKHAM
January 02, 2010 12:01am

POWER prices could triple under the Federal Government's blueprint to fight climate change, the nation's electricity market operator says.

The independent regulator modelled the impact of Prime Minister Kevin Rudd's proposed emissions trading scheme and renewable energy targets on the wholesale price of electricity.

It found the wholesale price could rise from $30 a megawatt hour to about $90 by 2020.

"Our simulations indicate that substantial change is coming to the electricity supply industry, as higher carbon and market prices drive new investment to cut energy emissions intensity by 40 per cent," the Australian Energy Market Operator said.

Opposition energy spokesman Nick Minchin said the Carbon Pollution Reduction Scheme would hit living standards while doing little to cut carbon emissions.

"This modelling is very sobering, and I think Australians will be stunned to learn that their power bills could more than triple as a result of Mr Rudd's climate change policies," Senator Minchin said.

But the Federal Government, which again will try to get its CPRS legislation through Parliament this year, has pledged to compensate millions of Australians for the impact of its policy.

"The Rudd Government will provide direct cash assistance to most Australian households," Environment Minister Peter Garrett said.

"A total of 90 per cent of all households will receive assistance and on average these households will receive around $660 of compensation in 2013.

"On average, low-income households are $190 better off under the CPRS, because the average price impact for low-income households is $420, while their average annual assistance is $610."

The report said the policies were likely to result in rapid investment in wind power and the retirement of high-polluting power stations.

1. No doubt Gozu will condemn the independent regulator as a right wing heretic
2. Peter Garrett confirms that, on average, low-income householders will be the winners with this wonderful new wealth distribution law. They will probably go out and buy a new electrical toy to use more power

This is madness - no wonder they dont want to debate its merits

[southee]

Agree Jimmy.....so much for Rudd's $900 bonus......ciao!!!

[dedja]

Electricity market claims power prices 'set to soar'

BEN PACKHAM
January 02, 2010 12:01am

"Our simulations indicate that substantial change is coming to the electricity supply industry, as higher carbon and market prices drive new investment to cut energy emissions intensity by 40 per cent," the Australian Energy Market Operator said.

This is exactly what the CPRS is aiming to achieve.

For example, the generators at the Torrens Island power station are amongst the dirtiest in the country and should be replaced.

Whether the CPRS is the best vehicle is debatable, but AEMO clearly have articulated the desired result.

[Squawk]

Electricity market claims power prices 'set to soar'

BEN PACKHAM
January 02, 2010 12:01am

"Our simulations indicate that substantial change is coming to the electricity supply industry, as higher carbon and market prices drive new investment to cut energy emissions intensity by 40 per cent," the Australian Energy Market Operator said.

This is exactly what the CPRS is aiming to achieve.

For example, the generators at the Torrens Island power station are amongst the dirtiest in the country and should be replaced.

Whether the CPRS is the best vehicle is debatable, but AEMO clearly have articulated the desired result.

Dedja - I think TIPS is a gas fired power station. Pt Augusta is coal fired. The latter generates the majority of base load for the state and these days TIPS is more of a power station that only really cranks up when the demand curve rises and so too do the spot prices for Megawatts.

[dedja]

Yes, you are quite right ... I did mean Pt Augusta!

[Squawk]

TIPS does have the capacity to burn oil if it loses gas supply however - in which case your error would no longer be an error at all! (Imagine the GG emissions from burning oil to generate electricity! )

[dedja]

Considering I work for the company that supplies gas to Torrens Island it's a pretty bad error!

[redandblack]

Jimmy, I think the party line so far has been "a great, big, new tax".

Has it now changed to a "Massive new tax on wealth"?

[Psyber]

I'd be happy to pay higher energy prices if I were guaranteed all the money raised was going into developing reliable clean energy like Thorium fusion and Hydrogen fuel for vehicles.
The fact that the costs are being passed on to the general consumer/taxpayer, and this dispersal of the money raised is not being guaranteed, makes it look like just a tax to me.
The wealth redistribution component of the proposal does too..

I am not totally against wealth redistribution.
I would support a more open and honest legislation limiting executive salaries, and, in broad principle an increase in base rates of pay.
I think dumping the "basic wage" concept for published "average wages" was an error, though it did help to con the unions into maintaining the "Accord" for a while a few years ago.

[Jimmy_041]

Jimmy, I think the party line so far has been "a great, big, new tax".

Has it now changed to a "Massive new tax on wealth"?

Thats what I am saying - why is there a transfer of wealth from the supposedly rich to the poor?

Why are they getting $190 more than they supposedly will spend but I will pay more than I supposedly spend?

It is wealth transfer by stealth and once it gets outed to the general public, it will show what a crock of shit this entire CPRS was.

How about some methods of encouragement to reduce carbon emissions? This is just the alcopop tax all over again - that worked well.........

[redandblack]

Jimmy, I'll see your $190 and raise you by the millions redistributed to the wealthy by Mr Howard's superannuation contribution laws.

It makes the $190 look like 2 cents.

[Jimmy_041]

Jimmy, I'll see your $190 and raise you by the millions redistributed to the wealthy by Mr Howard's superannuation contribution laws.

It makes the $190 look like 2 cents.

Sorry - which superannuation contribution laws?

[redandblack]

The ones that over the last several years have allowed wealthy taxpayers to make deductible contributions of $100K a year each at our expense.

[Jimmy_041]

The ones that over the last several years have allowed wealthy taxpayers to make deductible contributions of $100K a year each at our expense.

Sorry - I didn't realise that it was limited to a particular class of people - I thought anyone could do it and Im not sure it was at your expense. I dont suppose the co-contribution allowance ever came to mind?

Really though, we could argue all day about other taxes / benefits

I am merely asking why do some people get more compensation than they are paying under the CPRS? In reality, do I have sufficient reason to be somewhat skeptical about the intentions of this new tax when this little gem appeared? Does it, in any way, encourage low income earners to reduce their carbon footprint?

[Psyber]

I thought the point of superannuation was to encourage people to be independently funded in their retirement, and not draw a federal pension for the rest of their lives at everybody's cost.
But for years those earning sufficient to put away money for their independently funded retirement were discouraged from doing so when the Hawke/Keating regime changed the laws to require a high taxable income to be declared before you could put much away, and to set a higher tax on what you did put in. It killed the incentive.
They just didn't grasp the psychology of the situation - people will fight back if they feel robbed or simply close up shop and leave..

Then one was better off to put the money into building other assets that were not taxable then if sold later, or buying tax deductions like a Porsche.
That was why in the end I was able to sell mine in 1987 for 40% more than I had paid for it 4 years earlier.
[And by structuring the dealings right under the law at the time, avoid being taxed on the profit.]

The Howard government's corrective changes were aimed at redressing that failed legislation, and get those people thus discouraged from providing for their independent retirement to reconsider.
The catch up provisions were aimed at achieving that end as rapidly as possible before the baby boomers all hit pensionable age.

I have long been convinced the general superannuation provision for workers introduced under Hawke/Keating, as the system stood at the time, where only token, and sufficient to ensure the average worker had enough superannuation to not get the pension fringe benefits, like the Health Care Card, but just a basic pension. Employer only funded superannuation, at levels that will not kill employment completely, will not make the average worker better off in retirement - just save the government money.

[redandblack]

It's limited to people who can afford to put $100K a year into Super, Jimmy.

If that's not a particular class of people, I'm not sure what is.

I agree, I don't want to debate it either, just making the point that these things work both ways.

PS: Read Psyber's offering after I wrote the above. Glad you made a big, non-taxable profit on the Porsche, Psyber. Thanks for helping my argument about wealth redistibution

[redandblack]

In breaking news, I think I'm changing my mind about this wealth distribution. I just read that the wealthiest 20% of individuals in Australia own 63% of its wealth.

The bottom 20% own 0.2%.

They should give back their $190.

[Jimmy_041]

Still not getting my gist r&b

Is this a well thought out way of addressing the climate problem or a wealth distribution measure?

If they want bipartisan agreement on Australia's approach to this problem, dont cloud it with political or social ideology or people like me get up in arms about it being a cynical attempt at the usual socialist rich v poor argument.

If someone on $30,000 uses as much electricity etc as me, why should they make money out of it whilst I pay for the use?

I've got a good idea - here's a bit of social ideology -

We cut the electricity to all pokie machines for 20 hours a day
Around 100 very rich people in SA will be much poorer
Many thousands of people will be much wealthier and be able to afford to put more money into their superannuation (at the reduced tax rate )
Less black balloons over Adelaide
Everyone gets CPRS compensated at the same rate

OK - that's fixed - back to the cricket..............

[redandblack]

Well Jimmy, I haven't had time to study the legislation much so far, so I'll look at it in time.

It's a bit rich (pardon the pun) to complain about a rich versus poor argument when you put up a thread with the title ""Rudd's Massive New Tax on Wealth -CPRS"

[Psyber]

PS: Read Psyber's offering after I wrote the above. Glad you made a big, non-taxable profit on the Porsche, Psyber. Thanks for helping my argument about wealth redistibution

Good side step, R&B, but my real point was that people will find a way around these socialist measures if they bite too hard - even leaving the country if necessary..

I remember talking to a guy from the Democrats at one of their stands at the Royal Show some years ago when they were a functional party.
He was all for a "social wage" and argued employers should then have to pay enough above that to attract people to work for them if they needed staff.

When I asked him how it would be funded, he replied with the standard, "Make the rich pay their taxes!"
So I said, "OK, I'm Alan Bond, just out of gaol and my ex-wife is going to lend me some money to set up business. I plan to manufacture widgets in Indonesia, and sell them in Australia. I won't make more than a few cents on each in Australia because my Liberian registered shipping company will charge me so much that the only real profits will be in Liberia.... What do you do?"
He was stopped in his tracks and had no solution.

I'd made it up on the spot - think what could be done with some real thought and a team of lawyers and accountants.
I was kind enough to suggest an Australian GST might help to ensure some taxes were paid here...