The Australia Institute Feed Items

Australia’s addiction to consultants extends from the public sector to public universities. The final report of the NSW Government inquiry into the use of consultants was released last week. The number one finding is that there is no clear and readily available public record of exactly how much the NSW Government spends on consultants – far from encouraging. If this is the situation for the NSW Government, then what does it look like for Australia’s public universities?

Public universities in Australia spend big on consultants. In 2023, universities in two states alone spent $209 million on consultants – Victorian universities spent at least $72 million while Queensland universities spent a whopping $137 million. Compare this to 2022, when just ten universities across the country spent $249 million on consultants. With amounts like these, is it any wonder then that universities have been accused of being captured by private consultancies? In the meantime, consultancy companies are increasingly partnering with universities to deliver programs, making their continued use more likely.

Oil and gas lobby group Australian Energy Producers (AEP) has published a media release claiming “record” government payments, with “industry expected to pay $17.1 billion in taxes in 2023-24”.1 This briefing note provides context for the AEP claim, and makes other criticisms such as the conflation of royalties and taxes and the unreliability of lobby group data.

The post Gas industry claims debunked appeared first on The Australia Institute.

Over the last four years, $111 billion worth of liquefied natural gas (LNG) was exported from WA, derived from royalty-free gas.

Key Findings:

• Around 90% of gas produced in WA is exported as LNG, mainly extracted from Commonwealth waters.
• No royalties are paid on 73% of the gas that is exported from Western Australia.
• No royalties are paid by Chevron’s Wheatstone and Gorgon LNG, Woodside’s Pluto LNG and Shell’s Prelude LNG.
• LNG worth $111 billion was exported from WA, royalty-free, over the past four years.
• Royalties are only paid on gas from the heavily-subsidised North West Shelf and onshore fields.
• At least $9.6 billion in revenue could have been made if royalties had been charged on royalty-free gas over the last four years.

“Many Western Australians will be shocked to realise that a large portion of WA’s gas is given away, essentially for free,” said Mark Ogge, Principal Advisor at the Australia Institute.

“In the words of WA Treasury, ‘a royalty is the purchase price for a community-owned resource,’ and ‘the community expects a fair return for its petroleum resources’.

“However, in many cases Western Australians are getting no return at all for the sale of their gas.

“This is a narrative that Trump has been running for a long time, saying that the Department of Justice is in particular, but the entire security state is completely corrupt.”

“Trump has been really effective at weaponising that narrative and in galvanizing his base in particular.”

– International & Security Affairs Senior Researcher Dr Emma Shortis on ABC News

The post Trump Already Weaponising Guilty Verdict | Video appeared first on The Australia Institute.

Inflation is stubbornly staying above the Reserve Bank’s target, but it’s not because Australian consumers are flush with cash, according to Australia Institute Chief Economist, Greg Jericho.

In fact, retail spending figures suggest that people are struggling and further suppressing consumer demand by increasing interest rates could have a detrimental effect on the economy, Jericho said on the latest episode of Dollars & Sense.

“Pretty much since December, inflation has been stuck at that 3.5, 3.6 per cent area.

“Whereas, before that, it had been coming down fairly steadily.

“And so, some economists are getting rather panicky about the fact that inflation is ‘sticky’.”

But that’s not the full picture, Jericho said.

“What I care about as an economist is: are consumers out there spending like mad? And, as a result shop owners are going ‘wow, I’ve got lines around the block – I can raise prices’.

“But what we see in the retail spending figures is that we are not buying much at all.

“That is a real sign that we are not flush with cash, we are not doing well – households are really struggling.”

Among many landmarks was the 1995 establishment of the National Competition Council (NCC) by the Commonwealth and states and territories. At this time there was broad consensus between these governments that more competitive markets would benefit Australia and its citizens.

However, over the last three decades initiatives to deliver competition and contestability to public services, namely through privatisation, outsourcing and deregulation, have repeatedly failed both economically and socially.

This submission, using a framework built on neoclassical economic principles, demonstrates how each failed attempt to add ‘competition’ and ‘contestability’ to a traditionally public service could have been predicted and avoided.

The post Privatised Failure appeared first on The Australia Institute.

In light of reports that the Victorian Government is considering privatising the Registry of Births, Deaths and Marriages, the Australia Institute – in a submission to the Productivity Commission’s National Competition Policy Analysis inquiry – recommends an urgent review of outsourced critical services such as electricity, aged, disability and childcare.

Key Findings:

• Despite the establishment of the Productivity Commission and National Competition Policy in the 1990s, growth of GDP per hour worked has declined over the past three decades.
• Neoliberal economic theory does not support the general conclusion that private ownership delivers lower costs, higher quality, or greater productivity than the public sector.
• The report advocates for a comprehensive inquiry into the performance of privatised and outsourced public services.
• This will likely involve bringing many services back into public control.

“The privatisation and outsourcing experiment of the past three decades has clearly failed,” said Richard Denniss, Executive Director of the Australia Institute.

“This failure is obvious to any Australian family paying for critical services like electricity, disability care, aged care or childcare.

However, it barely keeps up with inflation and fails to repair the loss in real purchasing power experienced by most Award-covered workers in recent years.

The price of necessities such as housing, energy and food have increased faster than average inflation, causing real incomes for low-wage workers – who spend more of their income on those essentials – to fall further.

Research from the Centre for Future Work shows the real value of most Award wages has lagged behind inflation since 2021 – losing about 4% of purchasing power in that time. It also found an increase of between 5% and 10% was required to keep up with current inflation and undo that past damage.

“Today’s decision, in light of current inflation forecasts, means real wages for Award-covered workers will not change much in the year ahead,” said Dr Fiona MacDonald Policy Director, Industrial and Social at the Centre for Future Work.

“It locks in the recent decline in living standards for Award-covered workers, making it harder for them to manage the challenges of housing prices, insecure work and a weakening economy.

“While the painful reality of lower real wages was acknowledged by the Fair Work Commission in announcing its wage award, its decision does not begin to repair this problem.

The ongoing incarceration of Julian Assange is a case of “punishment-by-process”, said his long-term legal advisor, Jennifer Robinson.

The United Kingdom High Court’s decision to an allow an appeal against his extradition to the United States is a welcome one, said Robinson. But 14 years after Wikileaks published confidential American military and government documents, Assange – the website’s founder – remains in legal limbo.

This uncertainty and the five years he’s now spent in London’s Belmarsh Prison are having a serious impact on Assange’s health, Robinson said on the latest episode of Follow the Money.

This ordeal is the result of a Trump administration decision to indict Assange for publishing material connected to the Afghanistan and Iraq wars, including the notorious Guantanamo Bay detention centre and the killing of journalists and civilians.

“We will be looking at the impact of this material for decades and generations to come.

“And yet, the person responsible for making this available to the public – with hundreds of media partners around the world – is in prison.

“We’ll look back on this time and think ‘how on earth did it take so long? How could we have allowed an award-winning publisher to sit in a British prison?’.”

“The Australian public thinks the gas industry should be paying for the gas.”

“We can keep doing dumb things if we want to. But if this Government wants to have more money for schools, more money for hospitals…there is a simple tax reform opportunity here.”

– Executive Director Richard Denniss on ABC The Business

The post Majority of Offshore Gas Projects Paid ZERO Royalties | Video appeared first on The Australia Institute.

An hour or so before Trump was due to take the stage at the Libertarian National Convention last Saturday evening, National Chair Angela McArdle appeared at the lectern. McArdle drily observed that the crowd, full of MAGA cap-wearing Trump supporters, was occupying seats clearly reserved for Libertarian Party delegates. McArdle asked them to move, even going so far as to warn them not to make her come down there and “start a chair fight”.

The atmosphere was tense, and felt close to cracking, but McArdle deftly held things together. The Trump supporters moved for the Libertarians, eventually.

Trump was, as McArdle pointed out, there to speak to them, not the adoring fans who had tried to pack out the event. The former president had accepted the invitation in an effort to convince libertarians to vote for him in November – the first time a former president has ever graced them with his presence.

But the libertarians are a skeptical bunch; it was never going to be an easy task.

McArdle was followed by favorite Libertarian comedian David Smith, who reminded the restless audience that “we are not a bunch of college leftist sissies. We believe in free speech, so be respectful…the message that we are sending to the world is not that we can’t handle ideas we disagree with.”

Gas companies are meant to pay royalties for the right to extract and sell Australian gas. But no royalties are paid on 56% of gas exported from Australia. Report author Mark Ogge joined ABC News to discuss.

A new report from the Australia Institute, Australia’s Great Gas Giveaway, shows that over the last four years, multinational companies made $149 billion exporting royalty-free gas.

Australians have missed out on at least $13.3 billion in revenue that could have been raised over the last four years had royalties been charged on royalty-free gas.

The post “Extraordinary” No royalties paid on 56% of gas exported from Australia | Video appeared first on The Australia Institute.

With interest rates refusing to fall below three per cent, some analysts are making dire assessments of the Australia economy. But while so-called ‘sticky’ inflation isn’t great, it’s better than risking a huge drop in demand and a deep recession, according to Greg Jericho. On this episode, Greg examines why inflation is refusing to budge and what policymakers can do about it.

Greg Jericho is Chief Economist at the Australia Institute and the Centre for Future Work and popular columnist of Grogonomics with Guardian Australia. Each week on Dollars & Sense, Greg dives into the latest economic figures to explain what they can tell us about what’s happening in the economy, how it will impact you and where things are headed.

Host: Greg Jericho, Chief Economist, the Australia Institute and Centre for Future Work // @GrogsGamut

Producer: Jennifer Macey // @jennifermacey

Theme music: Blue Dot Sessions

Australia Institute research has found that 56% of gas exported from Australia attracts zero royalty payments, effectively giving a public resource to multinational gas corporations for free.

Around 80% of Australia’s gas is exported as liquefied natural gas (LNG). Most of this gas is extracted from gas fields in Commonwealth waters, but the Australian Government has failed to levy royalties on gas feeding six of the seven offshore gas LNG export terminals operating in Western Australia and the Northern Territory.

Overall, this means over half the gas exported from Australia is royalty free.

Press conference at Parliament House featuring:

• Senator David Pocock – Independent for the ACT
• Dr Monique Ryan MP – Independent Member for Kooyong
• Dr Richard Denniss – Executive Director, the Australia Institute
• Mark Ogge – Principal Advisor, the Australia Institute

Recorded 11:30am, Thursday 30th May

It’s been 12 years since Julian Assange has been free – but is the fight to keep him from a life in an American prison finally coming to an end?

United States President Joe Biden told reporters he’s considering Australia’s request to drop charges against Assange for publishing thousands of sensitive military and government documents, but the fight to free the Australian whistleblower isn’t over.

This episode was recorded on Tuesday 21st May 2024 and things may have changed since recording.

australiainstitute.org.au // @theausinstitute

Guest: Jennifer Robinson, international human rights lawyer and legal advisor to Julian Assange // @suigenerisjen

Host: Ebony Bennett, Deputy Director, the Australia Institute // @ebony_bennett

Producer: Jennifer Macey // @jennifermacey

Additional editing: Emily Perkins

Theme music: Pulse and Thrum; additional music by Blue Dot Sessions

Around 80% of Australia’s gas is exported as liquefied natural gas (LNG). Most of this gas is extracted from gas fields in Commonwealth waters, but the Australian Government has failed to levy royalties on gas feeding six of the seven offshore gas LNG export terminals operating in Western Australia and the Northern Territory. Overall, this means over half the gas exported from Australia is royalty free.

Key Findings:

• No royalties are paid on 56% of the gas that is exported from Australia, including 73% of gas exported from WA.
• Over the last four years, multinational companies made $149 billion exporting royalty free gas.
• At least $13.3 billion in revenue could have been raised over the last four years had royalties been charged on royalty-free gas.
• No royalties are paid on gas supplying major facilities owned by Chevron, Woodside (Pluto), Shell, Inpex and Santos
• Royalties are only paid by the heavily subsidised North West Shelf and onshore fields.

“Many Australians will be shocked to realise that a large portion of the nation’s gas is given away, essentially for free,” said Mark Ogge, Principal Advisor at the Australia Institute.

“In the words of WA Treasury, ‘a royalty is the purchase price for a community-owned resource,’ and ‘the community expects a fair return for its petroleum resources’.

“However, in many cases Australians are getting no return at all for the sale of their gas.

In view of this, many Australians might be surprised to learn that a large amount of the country’s gas reserves are essentially being given away for free.

Australia has ten facilities that export gas as liquified natural gas (LNG). Six of these projects—four of the five operating in Western Australia, along with both of the Northern Territory’s facilities—pay no royalties, either state or federal. These facilities represent 56% of Australia’s gas export capacity. This means that more than half the gas exported from Australia is given for free to the companies exporting it.

The monetary value of this gas is enormous. The total value of LNG exports over the last four years is estimated at $265 billion. Exports of LNG based on royalty-free gas were valued at a total of $149 billion. To put this another way: in the last four years alone, Australians have given away the gas that made $149 billion worth of LNG, for free. $111 billion worth of this royalty-free LNG was produced in Western Australia.

The billions of dollars in forgone revenue each year from effectively giving away Australian gas for free could be invested in a sovereign wealth fund (as it is in Norway) or used to raise productivity and increase living standards of Australians by funding schools, hospitals, renewable energy, and other needed public infrastructure.

The gas industry does not make a fair contribution to the community. The Australia Institute recommends:

When US President Joe Biden said that this year, “democracy is on the ballot”, he was more on the money than he possibly knew. But while we could be forgiven for thinking 2024 will be all about American democracy, this year is in fact a big one for democracies across the world. Depending on how you do the maths, somewhere between two and four billion people will head to the polls.

So according to Vox, 2024 will be “the biggest election year in history”; according to Time Magazine, it’s “a make-or-break year for democracy worldwide”; and according to the Economist, it will be “a nerve-wracking and dangerous year.” You get the picture!

From Algeria to Venezuela, democratic and not-so democratic countries are holding elections. Many of them will have critical implications for Australia, our allies, and our region.

It is a dismal document. Defence argot and clunky phrases present what is little more than portentous persiflage – where it is not just self-serving.

The breathless opening ­sentence tells us that there is no greater responsibility for the government than defending Australia.

But what does that mean?

The second sentence explains it: the government is committed to “deploying all elements of national power” to protect our security, interests and way of life.

Nowhere are any of these concepts explained. What is national power? How much of it does Australia have? How does Australia use it? Is it just armed force? What is security? What are our interests? What is our way of life? Did anyone ask the First Peoples? What about climate?

The document ends with the same sort of logorrhoea. It announces a biennial NDS cycle that “provides a structured basis to regularly evaluate and prioritise efforts to maintain a more lethal ADF that is capable of credibly holding potential adversaries at risk – including as military forces modernise and strategic challenges continue to evolve”.

So there you are: everything’s quite clear! And we know where the next iteration of Australia’s defence strategy might take us. The US now talks about “integrated deterrence” (whatever that means). It is just a matter of time before the Australian echo sounds. We are already on the way to an “Objective Integrated Force”, whatever that might be.

Every year, over 300,000 tonnes of clothing is either sent to landfill or exported from Australia.

To respond to the growing textiles waste problem, the Commonwealth has proposed policies intended to create a ‘circular economy.’

However, a genuinely circular economy depends on drastically reducing the rate at which textiles are produced and consumed, banning the export of textiles waste, and investing in Australia’s capacity to manufacture and recycle better alternatives domestically.

This paper discusses how textiles waste is generated and discarded in Australia, and the policies needed to create a ‘circular economy’ for textiles. Australia’s addiction to cheap textiles, many of which are derived from fossil fuels, has global consequences. The rapid production and overconsumption of textiles – particularly ‘fast fashion’ – creates obstacles to the reuse and repair of textiles, and our inability to reuse or recycle them domestically means we continue to rely on exporting textiles waste to landfills, waterways and beaches far from Australian shores.

The post Textiles waste in Australia appeared first on The Australia Institute.

The analysis shows Australia has surpassed the US as the world’s biggest consumer of textiles per capita, much of which is fast fashion that ends up in landfill.

Key findings

The oil and gas industry loves to tell Australians that they pay a lot of tax, but the evidence says otherwise.

Not only has the Australian Taxation Office (ATO) described the oil and gas industry as home to “systemic non-payers” of tax, but new Australia Institute research shows that Australia’s teachers pay twice as much tax as the oil and gas industry.

Read that again if you have to. Teachers pay more in personal income tax than the entire oil and gas industry pays in company tax and Petroleum Resource Rent Tax (PRRT).

Over the last ten years, ATO data shows that all of Australia’s school teachers paid $95 billion in personal income tax, an average of $9.5 billion per year.

By contrast, the oil and gas industry paid $12.5 billion in PRRT and $33 billion in company tax over the last ten years, or an average of just $4.6 billion per year.

In May 2024, the Australia Institute once again surveyed a nationally representative sample of Australians about whether they support, for their own state or territory, each of those 10 policies.

The results show that most of these policies have widespread support across Australia.

The post Polling – Australian attitudes to ACT policies appeared first on The Australia Institute.

Indeed, its decision to spend $3.5b on an Energy Relief Fund is an innovative, and likely effective, policy response to current idiosyncratic and challenging economic circumstances.

Jim Chalmers’ use of new policy tools to solve new kinds of inflation has enraged many commentators, but the anger of those stuck in the past doesn’t mean we shouldn’t be looking to the future.

For many of the loudest voices in Australia’s economic debate, it is a truism that public spending causes inflation. Public funding is simply fuel for the inflationary fire that they fear more than anything, including recessions and climate change.

For these ‘inflation hawks’ the idea that increasing public spending could lower inflation is simply absurd. But just because powerful people believe something doesn’t make it right.

In Australia, the most common measure of inflation is the CPI.

The CPI represents an incredibly large ‘basket of goods’ that captures the price of pretty much everything a consumer might spend money on.

Of course, it includes the price of bread and milk and petrol. But it also includes the price of building a new house, private health insurance, private school fees and even HECS fees.

Obviously not everyone buys the same things each week and in turn the ABS tries to identify a ‘representative household’. Understandably, that’s not really possible, as most people spend zero dollars per year on private school fees while some spend $100,000 per year keeping their kids away from the masses.

The ACT goes to an election later this year. During the campaign, what bold policies will candidates and parties propose?

100% renewable energy by 2020 target

In 2019, the ACT became the first Australian state or territory to transition from fossil fuel to 100% renewable electricity, and just the eighth jurisdiction in the world to do so – and the first outside of Europe.

The ACT’s transition to 100% renewable has reduced emissions by 40%, secured $500 million in local investment and economic benefits and kept energy prices low as prices in the rest of the country soared. The ACT is now looking to build the Big Canberra Battery, to provide energy storage and help meet the ACT’s net zero emissions by 2045 target.

Earlier this month, the Australia Institute polled a nationally representative sample of Australians – and found 71% support a 100% renewable energy policy.

According to the Productivity Commission, wealth inequality declined during the COVID years due to boosted government support payments. And when those payments finished, predictably inequality went back up.

The overwhelming majority of gains from economic growth since the GFC have gone to the wealthiest people. On this episode, Greg Jericho discusses inequality, poverty, and government support.

Greg Jericho is Chief Economist at the Australia Institute and the Centre for Future Work and popular columnist of Grogonomics with Guardian Australia. Each week on Dollars & Sense, Greg dives into the latest economic figures to explain what they can tell us about what’s happening in the economy, how it will impact you and where things are headed.

australiainstitute.org.au // @theausinstitute

Host: Greg Jericho, Chief Economist, the Australia Institute and Centre for Future Work // @GrogsGamut

Producer: Jennifer Macey // @jennifermacey

Theme music: Blue Dot Sessions

The Wrap with Richard Denniss

Money can’t buy everything, but it may buy this government a reduction in inflation ahead of the next election.

As I wrote in the Nine papers this week, the government’s $3.5 billion Energy Bill Relief Fund is an innovative response to the unusual and challenging economic times we’re experiencing.

By reducing everybody’s energy bills by $300, they will lower the consumer price index (CPI) – and so are quite literally buying a reduction in inflation.

For 46 years, Meredith Stanton has lived on a small bush block at Clouds Creek, near Dorrigo in NSW.

It’s surrounded by forest, much of it within the planned Great Koala National Park: a vast nature sanctuary the NSW Government is promising to create.

In 2019, as terrible bushfires ravaged the region, flames licked the boundary of Ms Stanton’s property.

“All the forest 360 degrees around me burnt,” she recalls, “some of it severely, some of it slowly.”

Millions of creatures perished in the fires, including significant numbers of koalas and other endangered species such as the greater glider.



The Great Koala National Park, promised by the NSW Labor government over a decade ago, is meant to protect forests that are home to nearly one in five of the state’s wild koalas.

But the NSW government is yet to set a date for the park and is allowing native forest logging within the proposed park boundaries to continue ravaging critical habitat for the endangered greater glider and koala.

A video report presented by Stephen Long, Senior Fellow, and Contributing Editor at the Australia Institute on Gumbaynggirr land.

Featuring:

• Mark Graham, Ecologist
• Meredith Stanton, Environmentalist
• Uncle Micklo Jarrett, Gumbaynggirr man

Learn More

Read more from Stephen Long: “Smash and Grab”: Backwards Carbon Credits Logic Incentivises Native Forest Logging 

A series of recent high-profile incidents has thrust the national crisis of domestic violence into the spotlight. Clearly the current approach to violence against women isn’t working, so what can be done?

1800RESPECT is the national domestic, family and sexual violence counselling, information and support service. Call 1800 737 732, text 0458 737 732, chat online or video call via their website.

This episode was recorded on Tuesday 21st May 2024 and things may have changed since recording.

australiainstitute.org.au // @theausinstitute

Guest: Jess Hill, investigative journalist, educator on coercive control, and author of See What You Made Me Do. // @jessradio

Host: Ebony Bennett, Deputy Director, the Australia Institute // @ebony_bennett

Producer: Jennifer Macey // @jennifermacey

Additional editing: Emily Perkins

Theme music: Pulse and Thrum; additional music by Blue Dot Sessions

As a “snapshot”, the report is just presenting the current situation rather than offering solutions. But unfortunately, it also perpetuates the lie that inequality and poverty is beyond our ability to fix.

It took only two paragraphs for warning bells to start ringing in my ears. On the opening page, the commission notes “the initial period of the pandemic saw an unprecedented fall in income inequality”. This of course did not happen by accident but “as a result of the significant increase in support payments from the Australian Government”.

These increases “included the Coronavirus Supplement, which was paid to income support recipients, such as those receiving JobSeeker and Youth Allowance”.

The budget reveals what governments actually care about. And Labor has chosen to keep jobseekers in poverty
Greg Jericho

All good so far. The government increased payments $550 a fortnight and it caused “an unprecedented fall in income inequality”.

But then comes the kicker.

The Productivity Commission states with a misguided certainty that only comes from a lifetime of adherence to the God of small government and market forces that these payments were “not fiscally sustainable in the long term”.

Excuse me?

Not fiscally sustainable? Sorry, but that is just flat out wrong. And irresponsibly so.

“Reporting on a crime should not be a crime. Assange’s case is a political one – he continues to be punished for embarrassing the United States by drawing attention to possible war crimes by its military forces. Australia, in contrast, has acknowledged war crimes perpetrated by its soldiers,” said Dr Emma Shortis, Senior Researcher at the Australia Institute.

“Assange, an Australian citizen, is being pursued by Australia’s most trusted and important ally for publishing the truth. The US-Australia relationship is supposedly based on ‘shared values’ – that is evidently not the case.

“The fact that the US is continuing with this case despite direct appeals from the Australian Government should be understood as an appalling show of disrespect for a critical security ally.

“This is especially true as it is happening in the shadow of the AUKUS pact – a deal in which Australia will hand over $368 billion and likely a significant portion of our sovereignty.

“Assange’s case reflects the alliance as it stands today – anti-democratic, secretive, and militarised.

“The Australian Government has repeatedly made it clear that Assange should be allowed to return to Australia. It is crucial that this diplomacy continues loudly and unapologetically.”

The post Assange Verdict Sees Punishment-By-Process Continue appeared first on The Australia Institute.

This means by 2027-28 Western Australian motorists will pay 6 times more in vehicle registration than the gas industry pays in royalties.

Key Findings

• In 2022-23, royalties from WA’s gas exports were $1.5 billion and made up just 3.4 % of WA Government revenue
• In 2023-24, royalties are expected to drop to $647 million (just 1.4% of revenue), falling again to just $258 million (0.6%) by 2027-28.
• By contrast, the vehicle registration fees paid by WA motorists will exceed $1.3 billion in 2024-25; double the value of oil and gas royalties.
• In 2027-28 the $258 million in forecast oil and gas royalties will equate to:
  • Just 5% of forecast iron ore royalties ($5.7 billion).
  • 1/6 of forecast vehicle registration revenue ($1.6 billion).
  • Less than half the value of forecast lithium royalties ($623 million).
  • Half the value of forecast gold royalties ($526 million).

“The return to the WA community from oil and gas production is tiny, and set to shrink further,” said Mark Ogge, Principal Advisor at the Australia Institute.

“This is shocking given that WA is one of the biggest LNG exporters in the world and both state and federal governments are planning on expanding gas production.

“Vast amounts of gas are exported from WA, but this doesn’t benefit Western Australians. It’s multinational gas corporations that make enormous profits while paying little in return.

It is expected to halve again by 2028, reaching just 0.6% of revenue, meaning WA’s motorists will pay 6x more in vehicle registration than the oil and gas industry pays in royalties.

When considering WA’s tiny and shrinking revenues from oil and gas, it is important to remember that WA is an internationally significant gas producer. If it were a country, WA would be the world’s third largest exporter of liquefied natural gas (LNG), behind only the USA and Qatar. The multinational companies that export LNG from WA made revenue of $56.3 billion in 2022-23, more than WA Government revenue ($43.6 billion in that year).

Despite the volume of gas produced and the huge export revenue, WA Government figures show that the WA community sees very little in return.

The gas industry has ripped of Western Australians for too long. The WA and Australian governments have an opportunity to raise far more money from oil and gas production

The post Budget revenue from WA gas exports appeared first on The Australia Institute.

In an ideal world, governments would help citizens to spot greenwashing. In reality, governments are part of the problem.

We’re exposed to stories of the climate crisis almost daily – catastrophic floods, extreme heat, species extinction, ecosystem collapse – and most of us are trying to do our bit to help. Government and industry tell us to recycle, turn off our lights, bring our KeepCup, offset our flights, get our solar panels. Because we’re all in this together … aren’t we?

Advertising for sustainable, carbon-neutral, climate-friendly brands is everywhere. Companies want consumers to know they care about the climate and biodiversity crisis and their business and its products and services are part of the solution. And that’s great, if it’s true.

But if all the sustainability claims being made by government and businesses were true, habitat destruction would be decreasing. Greenhouse gas emissions would be falling, not rising.

While in most states, you need permission to prune a tree in your backyard, Rio Tinto can blow up a rock shelter dating back 46,000 years and get little more than a slap on the wrist. If you exaggerate your deductions on your tax return you face serious consequences with the ATO; but if Ampol says its petrol is “carbon-neutral”, they’re endorsed by the government.

A revised NSW Koala Strategy is welcome but will be ineffective unless broader state and federal policies to address biodiversity decline and climate change are implemented.

Effective policy measures available to the NSW Government in the short term include: an immediate end to logging of koala habitat; establishment of the Great Koala National Park without generating carbon credits; and climate policy that reduces absolute greenhouse gas emissions such as a moratorium on fossil fuel projects.

The post No delay, no excuses, no carbon offsets appeared first on The Australia Institute.

What does the latest data reveal about Australian living standards? Why is there so much fearmongering about a wages breakout? And did the government hit the mark in the budget? On this episode, Greg Jericho discusses living standards, wages growth and this week’s federal budget.

Greg Jericho is Chief Economist at the Australia Institute and the Centre for Future Work and popular columnist of Grogonomics with Guardian Australia. Each week on Dollars & Sense, Greg dives into the latest economic figures to explain what they can tell us about what’s happening in the economy, how it will impact you and where things are headed.

Host: Greg Jericho, Chief Economist, the Australia Institute and Centre for Future Work // @GrogsGamut

Producer: Jennifer Macey // @jennifermacey

Theme music: Blue Dot Sessions

The schedule removed today would have allowed the Resources Minister to create new rules for offshore gas that weakened consultation requirements with First Nations people and the wider community. The agreement was reached to secure passage of the Bill.

“Blocking the Resources Minister’s attempt to circumvent Australia’s environment laws and consultation with First Nations people is welcome. However, this deal is a missed opportunity to raise more money from the oil and gas industry, get better fuel efficiency standards and fix Australia’s broken environment laws,” said Dr Richard Denniss, Executive Director of the Australia Institute.

“For too long, Australia’s resources ministers have put the profits of the gas industry ahead of the Australian national interest. Preventing the minister from setting the rules for offshore gas is a necessary move.

“Giving First Nations people a bigger say in development on their lands and waters is an important step, but it’s time that our parliament started to take the need to tax the gas industry seriously.

“Revenue from the Petroleum Resource Rent Tax was revised down in Tuesday’s budget. Australia Institute analysis shows that simple changes to the PRRT could generate $18 billion over the forward estimates.”

The Australian Government’s 2024-25 budget claims to be “supercharging Australian renewable hydrogen”. The new policy that will apparently achieve this is the Hydrogen Production Tax Incentive (HTPI) – a tax credit scheme that will pay developers $2 for every kilogram of green hydrogen they make. That might seem like a lot, but a closer look at the figure reveals it will do little to alleviate any of the greenhouse gas emissions Australia produces.

What this policy tells us is how big the government expects hydrogen production to be and what it believes a “renewable energy superpower” actually looks like.

The way this policy will work is that projects that get off the ground before 2030 will get access to the credit for the first ten years of production. For projects that manage to access the credit, it has no hard cap – the more they produce, the more credits they get. This means that we can work back from the cost estimate of the HPTI in the budget papers to find how much hydrogen the government thinks will be produced each year in the 2030s.

Treasurer Jim Chalmers used budget night to sell the government’s cost-of-living measures – and its inflation-fighting credentials – ahead of the next election.

While some of the measures to support people in need will be welcomed, this budget lacks ambition and a centrepiece, according to Australia Institute Senior Economist Matthew Grudnoff.

“It was a real scattergun approach,” Grudnoff said on the latest episode of Follow the Money.

“Usually, a budget has a theme or a story that a government’s trying to tell, but this one seemed to be all over the shop.”

Increases to rent assistance, adding new treatments to the Pharmaceutical Benefits Scheme and energy bill relief are all positive, but they fail to address the underlying issues that are driving increased inequality, Grudnoff said.

The government chose to ignore the recommendation of its handpicked Economic Inclusion Advisory Committee, which called for the JobSeeker unemployment payment to be increased to 90 per cent of the aged pension.

“We have the worst rate of unemployment benefits in the OECD.

“They’ve really done nothing to lift those on JobSeeker out of poverty.

Had you been listening to the media after the Budget was released you could be forgiven for thinking that the government has unleashed a massive stimulus plan that is going to send interest rates higher. Such concerns however are woefully misguided and lack a true consideration of the economic picture.

Firstly, the $300 energy rebate will reduce inflation because the ABS calculates the price of energy by the actual cost paid by consumers. There has been some misguided commentary suggesting that this will only reduce “measured inflation” as though there is some mythical non-measured inflation that is the real amount. Government intervention affects inflation all the time – whether it be via increases in tobacco excise or changes to the cost of university tuition fees, or through subsidies.

We know that in the past government subsidies on things such as childcare and energy have had a significant effect on CPI.

The response from these critical economists is that this will lift demand in the economy because it is in effect free money that people will go out and spend on non-essential items that will in turn drive up prices.

Such a view is wrong because of a number of factors.

1/ Credit where credit’s due

The Albanese Government will rightly claim they have delivered the promised cost-of-living relief in this year’s Budget. The headline figures of the $300 energy bill rebate, and the 10% increase to the maximum rate of rent assistance will complement the “centrepiece” of the modified stage 3 tax cuts, all welcome policies, providing much-needed relief.

But for Australians concerned about the future of our planet, and for those feeling the cost-of-living squeeze, they’ll no doubt be left feeling that more could have been done.

"Stage Three, as the Morrison Government created it, it mostly went to the top end."

"The new Stage Three we're going to see in a couple of months' time, that is spread evenly across all taxpayers."

– Senior Economist Matt Grudnoff@MattGrudnoff @GrogsGamut #auspol #Budget2024 pic.twitter.com/Ev2Tud04qz

— Australia Institute (@TheAusInstitute) May 14, 2024

What does the budget mean for inflation and living standards? What does it reveal about the government’s priorities as it approaches an election? And does it ultimately make Australia a better place? Matt Grudnoff, Senior Economist at the Australia Institute, joins Ebony Bennett on this episode of Follow the Money to examine this year’s federal budget.

This episode was recorded on Tuesday 14 May 2024 and things may have changed since recording.

Guest: Matthew Grudnoff, Senior Economist, the Australia Institute // @MattGrudnoff

Host: Ebony Bennett, Deputy Director, the Australia Institute // @ebony_bennett

Producer: Jennifer Macey // @jennifermacey

Additional editing: Emily Perkins

Theme music: Pulse and Thrum; additional music by Blue Dot Sessions

The Future Gas Strategy (the Government’s plan to expand fossil gas until 2050), the Minister for Climate Change and Energy’s defence of the “critical role” of the gas industry, and the Government’s $1.5 billion commitment for the Middle Arm “sustainable development” (actually a gas manufacturing hub) are completely contrary to the scientific reality, and make clear that the Government’s priorities lie with the gas industry, not with its climate commitments.

In this critical decade when fossil fuel use should be plummeting, Australian governments are investing in expanding the gas industry and telling us it’s both good for the climate and the economy.

It’s not. Here’s why expanding the gas industry is economically and environmentally reckless.

1. Gas is a small employer

While the gas industry would have you think it’s a huge employer in Australia, in reality, gas doesn’t create very many jobs.

Australia Institute research shows that for every million dollars it makes in sales, the gas industry creates just 0.2 jobs, while industries like education and training (private) create 9.3 jobs.

Targeted cost of living measures will directly reduce inflation in some areas (like energy and rents), while helping working Australians deal with higher prices in others (including reworked State 3 tax cuts, and support for higher wages for ECEC and aged care workers). Unlike previous years, the budget is projecting real wage gains in coming years that are actually likely to materialise — however, the damage from recent real wage cuts will take several years to repair, and further support for strong wage growth will be required, from both fiscal policy and industrial laws. The budget also spelled out initial steps in the government’s Future Made in Australia strategy to build renewable energy and related manufacturing industries; these steps are welcome but need to be expanded, and accompanied by strong and consistent measures to accelerate the phase-out of fossil fuels.

Our team of researchers at the Centre for Future Work has parsed the budget, focusing on its impacts on work, wages, and labour markets. Please read our full briefing report.

The post Budget 2024-25: Resists Austerity, Reduces Inflation, Targets Wage Gains appeared first on The Australia Institute.

“The emphasis on a surplus is a missed opportunity to invest in measures that would lift those on Jobseeker out of poverty,” said Matt Grudnoff, Senior Economist at the Australia Institute. 

“Budgets are a question of choices, and the Government has chosen to bank a surplus over measures to reduce inequality or tackle a fall in real wages.

“Changes to Commonwealth Rent Assistance are much needed, but the fact remains that the Budget lacks the ambition required to address the underlying causes of growing inequality, especially access to affordable housing.

“Annual inflation has almost halved over the last year, and the measures in this Budget will help to continue that trend. Steps to address rent and energy costs will all make a difference to people feeling cost of living stress while keeping downward pressure on inflation.

“The Government’s choice not to increase the JobSeeker payment fails on both economic sense and compassion. In a time when inflation is having a disproportionate impact on non-discretionary expenditure, keeping those looking for work below the poverty line is cruel.

The Reserve Bank have revised their inflation projections, suggesting that interest rates are going to remain high for longer than many expected.

This has sent plenty of people into a spin, with media speculating about interest rate armageddon and some economists calling for a recession.

But with inflation still heading in the right direction, cooler heads must prevail as policymakers navigate the tricky economic climate, Australia Institute Chief Economist Greg Jericho said on the latest episode of Dollars & Sense.

“[Inflation] is not dropping as fast as people thought because the previous thinking was probably a bit hopeful.

“Importantly, the long-term trend – where the Reserve Bank thinks inflation is going to go – really wasn’t changed. They still believe it’s going be below three per cent by the end of next year.

“That was what they were thinking in February – perhaps it’s just not going to be as sharp a drop.”

But that’s not necessarily a bad thing, Jericho argued – saying inflation’s fall had been roughly mirroring the pattern leading into the 1990s recession.

“That’s generally not a good thing to try and copy.

As I noted last month, not really. But while the surplus might not matter, the choices in the budget do, so let’s have a look at what the budget tells us about the economy and some of the choices the government has made.

No real change in the budget balance

One of the things to remember about the treasurer announcing a changed budget deficit or surplus is that it really just means the Treasury estimates were more wrong than they expected.

It is no different from if, for example, in January the AFL predicted 80,000 people would turn up to the Anzac Day game between Collingwood and Essendon, but then because the weather is nice and Essendon are winning more than expected, 93,000 turn up.

Fossil fuel subsidies cost Australians $14.5 billion in 2023-24, equivalent to $27,581 for every minute of every day – $540 for every person in Australia.

That’s the estimate from the Australia Institute’s latest research on fossil fuel subsidies from Australian state, territory and federal governments.

It’s a large amount of money and, as budgets are delivered across the country, it’s one to remember when treasurers lament that they just can’t afford more public housing, cheaper education or resources for victims of partner violence.

Whenever a treasurer says they can’t afford something, they should be reminded that fossil fuel subsidies cost more than governments spend on the army, the air force, foreign aid or First Nations health.

But the $14.5 billion price tag isn’t even the worst part.

The really bad news is that fossil fuel subsidies are increasing – up 31% from 2022-23 – and they are increasing because Australian governments expect to use and produce more fossil fuels in the future, not less.

If Australia is to use and produce more fossil fuels than we are now, the rest of Australian climate policy is just tinkering at the edges.

The analysis finds that over the forward estimates the Federal Government has budgeted $54 billion for fossil fuel subsidies, five times the amount it has committed to its key housing policy, the $10 billion Housing Australia Future Fund.

Key findings:

• Australia’s subsidies to fossil fuel producers and major users from all governments totalled $14.5 billion in 2023-24, the equivalent of $27,581 for every minute of every day, or $540 for every person in Australia.
• 2023-24 saw a 31% increase in fossil fuel subsidies to $14.5 billion, from the $11.1 billion recorded in 2022-23, driven by large increases to diesel and aviation fuel tax breaks.
• Total fossil fuel subsidies over the forward estimates from all governments has reached $65 billion, or 16 times the balance of Australia’s Disaster Ready Fund (as of December 2023).
• The OECD has recommended that Australia cut or reduce the largest subsidy, the Fuel Tax Credit Scheme, which alone cost the Federal Government $9.6 billion in 2023-24, more than Australia spends on the Royal Australian Air Force.

“Budgets are about choices. This research reveals Australian state and federal governments are budgeting for more fossil fuel use and more fossil fuel production, not less,” said Rod Campbell, Research Director at the Australia Institute.