The Australia Institute Feed Items

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.

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.

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.

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 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 

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.

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.

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

“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.

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.”

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

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 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.

“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 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.

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 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.

On Monday at 10:30am, Independent MLC Meg Webb will join Australia Institute Tasmania Director Eloise Carr to launch a discussion paper calling on Tasmania’s 51st Parliament to fortify the state’s democracy in Democracy Agenda for the 51st Tasmanian Parliament.

The report is the result of extensive consultation by the Australia Institute Tasmania, which hosted a public forum and a roundtable for parliamentarians and candidates to discuss
democratic reform ahead of the Tasmanian election.

Key Priorities:

• Strengthening donations disclosure requirements
• Introducing truth in political advertising laws
• Reforms to grants administration for funding commitments during election campaigns (“pork barrelling”)
• A Joint Standing Committee on Electoral Matters
• Fixed four year terms for the House of Assembly
• A new, appropriately funded, independent anti-corruption commission that is fit for purpose and holds public hearings is urgently needed
• Right to Information reforms

“Many current Members of Parliament committed to strengthening integrity in politics during the recent election and the 51st Parliament provides a golden opportunity to follow
through on this,” said Eloise Carr, Director of the Australia Institute Tasmania.

“Democracy should never be taken for granted, and fortifying Tasmania’s democratic institutions is the responsibility of all Parliamentarians.

Similar to the Code of Conduct for Members of the Parliament of Tasmania, the Nolan Principles are a succinct set of seven principles to guide the conduct of public officers. The
Nolan Principles have become synonymous with good governance and are provided in this discussion paper as relevant background to the recommended reforms.

The first nine recommendations to strengthen democratic architecture are identified as the highest priorities, with remaining reforms in this section recommended for action during
this term of Parliament. Several of these have draft legislation prepared or can be addressed quickly as soon as Parliament returns. The Australia Institute’s nine principles for fair
political finance reform are included. Actions to improve the functioning of, and representation within Parliament, have been proposed.

The post Democracy Agenda for the 51st Tasmanian Parliament appeared first on The Australia Institute.

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.

$14.5 billion equates to $27,581 for every minute of every day, or $540 for every person in Australia.

Beyond the 2023–24 budget year, total budgeted fossil fuel subsidies over the longer term have reached $65 billion.

This longer term total is 16 times the balance of Australia’s Disaster Ready Fund, and 6.5 times greater than the Housing Australia Future Fund (HAFF). The Federal Government’s share of this total is $54 billion, or 5.4 times the HAFF.

Australia is not taking serious action on climate change. Instead, the majority of its governments continue to subsidise the fossil fuel industry and greenwash their poor climate policies. Cutting fossil fuel subsidies would not only help achieve genuine reductions in emissions, but would save money that could be spent on public services.

But the coming months bring new opportunities to change course. Budgets will soon be passed for the 2024-25 financial year, and elections will be held in the ACT, Northern Territory and Queensland. A federal election is due in the next 18 months. The costs of Australia’s fossil fuel subsidies, both financial and environmental, and the opportunities that their phase out could present, should be front and centre of Australian policy debate.

The post Fossil fuel subsidies in Australia 2024 appeared first on The Australia Institute.

Researchers at the OECD, IEA and IISD describe it as a fossil fuel subsidy. The OECD has called for its elimination. Australian Government and mining industry representatives dispute the use of the term subsidy, but not its cost to government or benefit to miners.

Key points:

• The FTCS clearly meets the World Trade Organisation’s definition of ‘subsidy’, as the tax refund represents ‘government revenue that is foregone or not collected…such as tax credits’.
• Organisations that explicitly call Australia’s FTCS a subsidy include the Organisation for Economic Cooperation and Development (OECD), the International Energy Agency (IEA), International Institute for Sustainable Development (IISD), Overseas Development International (ODI) and Oil Change International.
• The International Monetary Fund (IMF) does not mention the FTCS specifically, but IMF fossil fuel subsidy estimates include the impact of the FTCS.
• The OECD has called for the elimination of the FTCS.

The post Australia’s Fuel Tax Credits and the debate over fossil fuel subsidies appeared first on The Australia Institute.

The FTCS costs the Commonwealth Budget around $10 billion per year and largely benefits iron ore and coal miners. The scheme is controversial because of its large cost and the sensitivity of government and industry to the use of the term ‘subsidy’.

Key findings:

• The FTCS clearly meets the World Trade Organisation’s definition of ‘subsidy’, as the tax refund represents ‘government revenue that is foregone or not collected…such as tax credits’.
• Organisations that explicitly call Australia’s FTCS a subsidy include the Organisation for Economic Cooperation and Development (OECD), the International Energy Agency (IEA), International Institute for Sustainable Development (IISD), Overseas Development International (ODI) and Oil Change International.
• The International Monetary Fund (IMF) does not mention the FTCS specifically, but IMF fossil fuel subsidy estimates include the impact of the FTCS.
• The OECD has called for the elimination of the FTCS.

“The Australia Institute considers the FTCS to be a fossil fuel subsidy, as do most international researchers such as the OECD, IEA and IMF,” said Rod Campbell, Research Director at the Australia Institute.

“The debate over the word ‘subsidy’ is not the real point. The real point is the cost of the FTCS to the public and its role in increasing fossil fuel use and emissions.

The Government’s Future Gas Strategy is a future climate disaster.

Richard Denniss explains the problems with the Government’s new Future Gas Strategy to help you wade through the spin.

This is a plan to expand the industry that’s causing climate change, and we’re greenwashing it and calling it a solution.

It’s sick.

— Richard Denniss, Executive Director of the Australia Institute.

The post Video: Future Gas Strategy with Richard Denniss appeared first on The Australia Institute.

You’ve probably heard things like “gas is a transition fuel”, “gas is a big employer” and “gas companies pay a lot of tax”.

Even the Government is spreading these gas-friendly sentiments. Australia’s Minister for Climate Change and Energy, Chris Bowen, has defended the “important role” of gas in the energy industry, including touting that in 2030, fossil gas will make up 18% of Australia’s energy mix. The Government has also committed $1.5 billion for the Middle Arm “sustainable development” precinct in the NT (and internal documents have shown that the cost could blow out to $3.5 billion), which will provide major export opportunities for fracked gas from the Beetaloo Basin, and produce emissions equivalent to 12 new coal-fired power stations.

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.

To help you combat some of the misleading rhetoric about the importance of gas that you might come up against this holiday season, the Australia Institute has debunked some of the loudest myths about gas.

With the announcement of the Future Gas Strategy, the Commonwealth Government has stepped through the looking glass.

Like Alice when she climbs through the mirror in Lewis Carroll’s famous novel, government policy has entered a backward land where logic is reversed.

In this absurd landscape, expanding fossil fuel use is the path to “net zero”; burning far more gas and producing more greenhouse emissions is the answer to the climate crisis; and ramping up gas exports, which have hiked domestic prices and damaged local manufacturing, is the way to produce new “green” industries.

Resources minister Madeleine King claims that the strategy will be based on “facts and data”, not ideology.

Yet, from the climate perspective, the strategy ignores the key, salient fact: the world needs to stop developing new oil and gas projects and needs to phase out fossil fuels to avoid a climate catastrophe.

This is the consensus of climate science, the United Nations and the International Energy Agency, once an ardent supporter of fossil fuels.

Despite this reality, the Government is backing new gas projects that would radically increase greenhouse gas emissions.

Since the release of the March quarter inflation figures, there has been much commentary about the “stickiness of inflation” and the need for further rate rises to bring down inflation.

One economist even suggested that the official CPI did not reflect the “actual” inflation rate because it included the impact of government subsidies on energy costs and thus inflation was actually higher than the mere “measured” inflation.

While such a view ignores the multitude of government interventions on all manner of items in the CPI basket, and weirdly suggests that somehow CPI should not reflect people’s experiences, it also reflects a belief that inflation must get below 3% as quickly as possible.

The problem with this belief is it ignores what drove the initial increase in inflation and what is contributing to the current level of “stickiness”. The current level of inflation is mostly driven by the prices of items where supply remains an issue or the cost of services and goods is largely based on either government regulations or world prices.

In the past year, the major contributors to inflation have been rental prices, new dwelling purchases by owner-occupiers (essentially the cost of building a new home), other financial services and automotive fuel. These four items account for a third of all inflation over the past year.

Indeed of the 12 biggest contributors, which account for two-thirds of all inflation, only takeaway and restaurant meals could be said to be driven in part by demand or labour costs.

The letter, published in the Sydney Morning Herald, The Age, The Canberra Times, and The Courier Mail, comes ahead of today’s release of the Senate Inquiry report into the government’s proposed reforms to the PRRT. Australia Institute analysis shows that these reforms fail to deliver any meaningful economic benefits and do not meet community expectations for tax reform.

Key findings

Yesterday, Resources Minister Madeleine King released the government’s Future Gas Strategy. On the same day, the Commonwealth regulator granted approval for Chevron’s massive expansion of their Gorgon project (you know, the one in the news all the time for its chronically underperforming carbon capture and storage project).

These announcements are a gut-punch to anyone who hopes to live on this planet in the future – especially our Pacific neighbours, whom the government are currently trying to placate, even while ensuring their homes sink beneath the waves.

At the same time, a survey of leading climate scientists showed their universal frustration with and condemnation of politicians and business who continue to approve and develop fossil fuels.

An aged care worker registration scheme including minimum education and ongoing training requirements is the missing piece of current aged care regulatory reforms addressing workforce problems. Without this, there is a risk too little progress will be made on developing the care workforce and improving the status of aged care work. Yet progress is critical to building a sustainable aged care workforce that can meet current and future care demand.

Increases in award minimum pay rates and current reforms to aged care regulation are moves in the right direction. However, more needs to be done to ensure Australia has an appropriately skilled and qualified aged care workforce able to provide safe and high-quality care.

The recent Fair Work Commission decision to award significant pay increases to direct care workers recognises the long-standing undervaluation of aged care work and the skills required to perform the work. The industrial tribunal awarded benchmark pay increases of around 23% to properly reflect the value of the work, including the exercise of ‘invisible’ skills. This decision provides important formal acknowledgement that the characterisation of aged care work in our industrial system has been blind to the skilled nature of personal care work.

Simple reforms to the Petroleum Resources Rent Tax could raise $18 billion over the next four years, new Australia Institute research has found.

The report, A Stronger PRRT Cap, demonstrates that straightforward reforms would raise more revenue than the government’s proposed 90% cap on the expenses oil and gas companies can deduct from their PRRT payments.

The research come as the Federal Government’s Future Gas Strategy makes no mention at all of the PRRT – one of the main ways that the Australian Government collects tax from the gas industry.

Key Findings

Inflation isn’t coming down as fast as many hoped, but it’s still heading in the right direction. Some economists are calling for recession, but that’s playing with fire, according to Greg Jericho. On this episode of Dollars & Sense, Greg calls for calm as policymakers navigate a difficult economic climate.

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

Additional editing: Emily Perkins

Theme music: Blue Dot Sessions

Current Commonwealth Government attempts to reform the Petroleum Resources Rent Tax (PRRT), do little to address structural problems that allow the gas industry to pay little tax relative to large profits. The Australia Institute proposes a stricter cap on PRRT deductions that would better deliver for all Australians.

In this paper we propose reforms that could improve the Petroleum Resources Rent Tax (PRRT). Currently the government is proposing a deduction cap limited to 90% of assessable PRRT income. The deduction cap is far too small to make a material difference to PRRT revenue over the long term. We propose instead two stricter caps of either 80% or 60%.

While a stricter cap of either 80% or 60% is preferred to the government’s current proposal, it remains a least-best solution. We propose the Commonwealth Government tax also investigate introducing a true windfall profits tax. Such a tax would raise much greater revenue but would still be a modest return relative to large industry profits and revenue.

The post A stronger PRRT cap appeared first on The Australia Institute.

The plan relies on the false promise of carbon capture and storage to justify fossil fuel expansion. Chevron’s recently approved Gorgon LNG Stage 2 expansion will release 3 billion tonnes over the next five decades; Chevron’s CCS program has, by contrast, sequestered just over 9 million tonnes to date (and will only capture about 100 million tonnes over the life of the system).

“The world has just experienced its hottest April on record and the Australian Government is doubling down on fossil fuel expansion. It’s scientifically and economically reckless,” said Polly Hemming, climate & energy program director at the Australia Institute.

“To be clear, Australia has more than enough gas. In fact, the gas industry itself is the biggest user of Australia’s gas, which they use for export production.

“It is a flawed argument to say that Australia needs more fossil fuels to become a renewable energy superpower. First, we had the “gas-fired recovery,” and now we have “gas-fired renewables.” It is as if the Coalition Government never left.

“It’s not just Australians who are facing the burden of climate change; this affects the countries the Australian Government has gone to pains to describe as its so-called ‘family’.

The Wrap with Ebony Bennett

It’s just five sleeps until federal budget night, but today’s big story is the government’s announcement that it will be doubling down on fossil fuel production and exports.

On the same day that scientists declared the world has just experienced the hottest April on record, the Australian Government released its Future Gas Strategy, setting the scene for new gas developments to 2050 and beyond.

The entire premise of the strategy is that gas is ‘critical’ to the Australian economy and we need MORE. A myth the Australia Institute has debunked again, and again, and again, and again.

Investing in literally *any other industry* would create more jobs than investing in gas. #auspol pic.twitter.com/mCuGMxaNkq

Next week, Treasurer Jim Chalmers will announce what the government has chosen to prioritise in this federal budget. So, will the government address some of the big issues facing social security, the climate, HECS, housing and more, or will it be a budget of band aid solutions? Senior Economist at the Australia Institute, Matt Grudnoff, joins Ebony Bennett to discuss what to look out for in next week’s budget.

This episode was recorded on Tuesday 7 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 estimates of inflation not falling below 3% until the end of next year has led some commentators to demand higher rates as though there is an ability to have inflation drop quickly while at the same time delivering the hoped for economic “soft landing”.

After the RBA’s decision on Tuesday to keep rates steady, you would be forgiven for thinking that a rate rise is imminent. Other than Peter Hannam, who maintained a level of calm, some media organisations were suggesting rate rises are now much more likely and that there is a sense of doom ahead for inflation.

It might therefore be somewhat surprising to be told that the market’s expectations for a rate rise are actually lower now than before the RBA’s decision on Tuesday.

A month ago, I suggested that it was unlikely we would see a rate cut soon. Back then the market was still predicting rate cuts this year; now they are not. Cuts are on the horizon, but probably not until next year:

Too often we are told by economists that the only way to reduce inflation is by the Reserve Bank hiking interest rates. But this ignores that the government can actually reduce the prices and costs of many items and services.

We know this is true because it has happened before!

Just last year the Treasurer, Jim Chalmers, said when the government increased the childcare subsidy

What we’ve tried to do is to provide cost of living relief in a number of areas so that we can make things a little bit easier. Cheaper childcare will make life easier for a lot of families in a way that doesn’t add substantially to the inflation challenge in our economy.

Over the last year, the government has continued to provide cost of living relief that also reduces inflation. Inflation (measured by the Consumer Price Index) is the change in prices of goods and services paid by people. The government has control over many prices in the economy. For example, the price of university degrees or medicines listed on the Pharmaceutical Benefits Scheme (PBS). Lowering these prices not only directly reduces inflation but also provides cost of living relief for those who now have to pay less.

Here is a list of 6 inflation-busting ideas for the upcoming budget that would also provide cost of living relief.

Looking at the latest media reports you would be forgiven for thinking that inflation had started to rapidly increase. While the talk at the beginning of the year was about inflation slowing and possible interest rate cuts later this year, now some of the financial talking heads are suggesting that interest rates need to rise, and Australia might even need a recession to get inflation under control.

How confused you would be then if you happened to stumble onto the Australian Bureau of Statistics website and see that annual inflation rate in the most recent quarter was down half a percent to 3.6%. Annual inflation has almost halved over the last year.

The sudden calls for higher interest rates as the inflation rate continued to fall was so jarring, even the unusually mild-mannered Treasurer, Jim Chalmers, called it an “overreaction”.

Some in the financial commentariat responded that the inflation rate wasn’t falling fast enough. That inflation was sticky and was at risk of stalling outside the RBA’s target range of 2% to 3%. Failing to get inflation back to the target range as quickly as possible, they claimed, was imposing huge costs on the economy and crippling household’s budgets through cost-of-living pressures.

The only problem with all of these claims is that they are misleading nonsense.

The rate of inflation is still falling. The rate at which it is dropping has slowed but that is to be expected. The rate of inflation is not going to crash down at great speed only to suddenly flatten out when it reaches the target band.