View from The Hill: Malcolm Turnbull and his NEG continue to haunt the government



File 20181204 34148 17lkcuy.jpg?ixlib=rb 1.1
The former PM via twitter effectively inserted himself into Question Time – in real time.
Dan Himbrechts/AAP

Michelle Grattan, University of Canberra

If anyone needs further evidence of the self-defeating weird places
the Liberals seem to find themselves in, consider what happened on
Tuesday.

Malcolm Turnbull made another intervention in the political debate,
this time talking about the National Energy Guarantee, when he spoke
at an energy conference on Tuesday morning.

“I’ve strongly encouraged my colleagues to work together to revive the
National Energy Guarantee. It was a vital piece of economic policy and
had strong support, and none stronger I might say, than that of the
current Prime Minister and the current Treasurer,” he said.

This and the rest of Turnbull’s observations on energy policy provided
abundant material for a question time attack by a Labor party bloated
from dining on the unending manna that’s been flowing its way from
some political heaven.

As Scott Morrison sought to counter this latest attack by concentrating on
Labor’s substantial emissions reduction target (45% on 2005 levels by
2030), suddenly a tweet appeared from Turnbull.

“I have not endorsed “Labor’s energy policy”. They have adopted the
NEG mechanism,“ Turnbull said – adding a tick of approval – “but have
not demonstrated that their 45% emissions reduction target will not
push up prices. I encouraged all parties to stick with Coalition’s NEG
which retains wide community support.”

Here was the former PM effectively inserting himself into Question
Time – in real time.

Morrison quickly quoted from the tweet, but it couldn’t repair the
damage done by Turnbull’s earlier comments.

All round, it was another difficult day for the government on the energy front.

The Coalition parties meeting discussed its controversial plan
providing for divestiture when energy companies misuse market power,
with conduct that is “fraudulent, dishonest or in bad faith” in the wholesale market.

The government has put more constraints on its plan than originally
envisaged. Notably, rather than a divestiture decision resting with
the treasurer, it would lie with the federal court (although precisely what this would mean is somewhat unclear).

Treasurer Josh Frydenberg told a news conference: “This power will be on the advice
of the ACCC [the Australian Competition and Consumer Commission] to
the Treasurer, and then the Treasurer will make a referral to the
Federal Court. The Federal Court will then be empowered to make that
judicial order.”

There had already been backbench criticisms of the divestiture proposal expressed to Frydenberg last week; the changes dealt with some of these.

But the plan is still leaving some in Coalition ranks uneasy.

According to the official government version, in the party room 18
speakers had a say, with 14 supporting (though a couple of them were
concerned about the interventionism involved) and four expressing
varying degrees of reservation. No one threatened to cross the floor.

Backbench sources said the strongest critics were Jason Falinski,
Russell Broadbent, Tim Wilson and former deputy Liberal leader Julie Bishop,
while milder criticisms came from Craig Laundy, Scott Ryan and Jane
Prentice.

There were two main worries about the measure – the potential negative
impact on business investment and its inconsistency with Liberal party
free market principles.

Bishop – who, it might be recalled, was recently saying there should
be a bipartisan deal with Labor on the NEG – highlighted the
investment implications and the issue of sovereign risk.

She said: “This is not orthodox Liberal policy. We need to do more
consultation with the industry and we need to be cautious of
unintended consequences of forced divestiture”.

Addressing the concerns, Morrison told the party room that a variety
of principles were at play.

The energy sector was not “a free market nirvana” but rather “a
bastardised market,” he said. The law was targeted at situations where
sweetheart deals came at the expense of consumers.

Energy minister Angus Taylor said governments of the centre-right,
including the Menzies and the Thatcher governments, had acted to
ensure markets operated for consumers.

Taylor invoked an example of the beer drinkers against the brewers,
when Thatcher had been on the side of the beers drinkers.

Frydenberg produced a quote from Menzies’ “Forgotten People”
broadcasts about the need to balance the requirements of industry with
social responsibilities.

The legislation, which is opposed by Labor even with the changes, is
being introduced this week. But there is no guarantee that it can be
passed by the time of the election – not least because there are so
few sitting days next year.

So the most controversial part of the government’s “big stick”, which
has caused so much angst with business, may never become a reality.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Grattan on Friday: Hokey-pokey politics as the government is shaken all about


Michelle Grattan, University of Canberra

In the topsy turvy Liberal universe, just when the right is trying to
tighten its grip on the throat of the party, the government is haring
off to the left, with this week’s legislation to allow it to break up
recalcitrant energy companies.

As former deputy Liberal leader Julie Bishop – who as a backbencher
has become very forthright – said in the Coalition party room on
Tuesday, “this is not orthodox Liberal policy”. Bishop canvassed the
danger of sovereign risk.

To find a rationale for a frolic into what in other circumstances the
Liberals would no doubt denounce as “socialism”, one might see it as
driven by the veto of the so-called conservatives.

Those on the right (led by Tony Abbott and his band) have long stopped
the government putting forward a sound energy policy, despite the
strong pleas from stakeholders across the board.

Instead, trying to respond to the pressing electoral issue of high
electricity prices, the government has reached for its “big stick”
including the threat of divestiture – a policy that’s being attacked
by Labor as well as business.

Shadow treasurer Chris Bowen was correct on Thursday when he said:
“this is what we see when a government’s policy agenda falls apart”.

Having to defend this draconian policy, first from critical Coalition
backbenchers (who won some changes) and then in parliament, the
government found itself tied in knots.

Given this is such a radical proposal, it was also in an enormous rush with the legislation, introducing it on Wednesday and wanting the House of Representatives to pass it by Thursday.

But that timetable was stymied by Labor. Passage through the House
will have to wait until February.

Meanwhile there will be a Senate inquiry, reporting in March. This
puts off a Senate vote until budget week in April – ensuring a lot
of noise about this controversial measure just when the government
will want all the attention on a budget crafted to appeal to voters
for a May election.

Even if the divestiture legislation gets through the Senate next year,
a likely Labor election victory would mean we’ll probably never see
this particular “big stick” wielded. It’s highly doubtful the threat
will have been worth the angst, or the trashing of Liberal principles.

The final parliamentary fortnight of 2018 coincided with the first
fortnight of the hung parliament.

For Scott Morrison, it has been an excruciating two weeks, with the
backlash from the Liberals’ trouncing in Victoria, Julia Banks’
defection to the crossbench, Malcolm Turnbull’s provocative
interventions, and an impasse with Labor over the plan to protect LGBT
students.

The government’s stress culminated in Thursday’s extraordinary battle
to prevent a defeat on the floor of the House.

This test of strength was over amendments, based on a proposal
originally coming from new Wentworth member Kerryn Phelps, that would
make it easier to transfer people needing medical treatment from Nauru
and Manus to Australia.

As both sides played the tactics, a remarkable thing happened in the
House of Representatives. Behaviour improved one hundred percent, with
none of the usual screaming and exchanges of insults. This pleasing
development was, unsurprisingly, driven by self-interest – neither
government nor opposition could afford to have anyone thrown out ahead
of the possible crucial vote.

Earlier, Morrison had shown anything but restraint when at his news
conference he described Bill Shorten as “a clear and present threat to
Australia’s safety”. Once that would have been taken as a serious
claim, which a prime minister would have been called on to justify. In
these days, it’s seen as a passing comment.

In what was a highly aggressive performance, Morrison gave us another
foretaste of what he’ll be like on the hustings.

In the end, by its delaying tactics in the Senate, the government
prevented the amendments reaching the House before it adjourned, and
so avoided a test of the numbers.

Defeat in the House would not have equalled a no confidence vote, but
it would have been a serious blow for Morrison. Looking for a
precedent, the House of Representatives’ clerks office went back to
votes lost in 1929 (which led to an election) and on the 1941 budget
(which brought down the Fadden government).

But the government may have just put off, rather than prevented, the
reckoning. Phelps said on Sky, “I am sad that we didn’t get this
through today … because I believe it would have gone through on the numbers … But you know if we have to wait until February, at least I believe that there is a light at the end of the tunnel.”

Dodging this vote meant that legislation to give authorities better
access to encrypted messages to help in the fight against terrorism
looked like it would be delayed. Once the House had adjourned, any
Labor amendments the Senate might pass couldn’t go back there until
February.

The government had declared the encryption measure was urgent, and the
blame game started in anticipation of a hold up. Then, mid-debate in
the Senate, Labor abandoned its attempt to amend the bill, which
glided through. In an agreement which may mean something or nothing,
the government undertook to consider the ALP amendments in the new
year.

Shorten didn’t want to be open to the government’s accusations of impeding legislation the security agencies said would help prevent terrorist
acts. “I couldn’t go home and leave Australians over Christmas without
some of the protections which we all agree are necessary,” he said.

The events of this week show why the government decided to have
the minimum of sitting days before the election next year.

The new parliamentary session will open with a deadlock on the
protection of gay students, the divestiture plan up in the air, and
the Nauru-Manus vote hanging over the government.

And by that time Scott Morrison will have had his first and probably
his last Christmas at Kirribilli.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

View from The Hill: Day One of minority government sees battle over national integrity commission


Michelle Grattan, University of Canberra

Whatever it does, the Morrison government seems to find itself caught
on the sticky fly paper. As if it didn’t have trouble enough with
trying to decide about the embassy in Israel and the religious freedom
report, on Monday it became messily entangled in the issue of a
national integrity commission.

On the first day of formal minority government, the crossbench flexed
its muscle and the government bowed to the new reality.

Well, not quite bowed – but bought time by taking a line of least resistance.

After the independent member for Indi, Cathy McGowan, introduced her
private member’s bill for a national integrity commission, the House
of Representatives considered a motion from the Senate which called on
“the federal government to establish a national anti-corruption
commission”.

The government didn’t oppose the motion, which went through on the voices.

It was claimed that Attorney-General Christian Porter wanted to set out
the government’s objections to the McGowan bill, which he couldn’t do
in private members’ time.

The real reason was the government didn’t want to test its numbers on
the floor when there could be a defector or two from its own ranks.

Porter embarked on something of a lawyer’s frolic as he pointed to
dangers in the bill.

He warned that any public official who, it could be argued, had
breached public trust or impaired confidence in public administration
“would be liable to a finding of corruption”, even for a trivial
matter.

The ABC would come under the proposed body. So Porter conjured up the
scenario of ABC political editor Andrew Probyn (who, it will be
recalled, former ABC chairman Justin Milne wanted shot) being caught
under the bill.

On Porter’s account, that would be because Probyn was found in breach
of the ABC code of practice’s provision on impartiality for saying
Tony Abbott was the “most destructive politician of his generation”.

“Under this bill before the House—no ifs, ands or buts—Andrew Probyn
would be found to have committed corruption,” Porter declared.

He didn’t sound as if he were joking but maybe the Attorney has a very
dry sense of humour.

Not that McGowan is claiming her bill has the detail right. What she
and other crossbenchers are trying to do is force the government’s
hand.

How far they’ll succeed is not clear – they’ll get something but not
the full monty.

The government’s preference would be to do nothing. But that’s no
longer politically viable. Labor is committed to a new anti-corruption
body (once it didn’t believe in one), and the level of public distrust
of the political system makes this an issue that resonates in the
community.

The government now finds itself in the rather bizarre situation of
having voted for a “national anti-corruption commission” without
committing itself to one.

In fact, such a commission is the least likely to get a tick of the
three options before the government. Porter has all but written it
off.

The other options, according to Porter, are expanding one of the
existing 13 bodies that presently deal with integrity and corruption
(probably the Australian Commission for Law Enforcement Integrity),
or merging some of them to eliminate overlap.

Ideally the way forward would be by a bipartisan approach. The issues
are indeed complex and state experience suggests the need for careful
balances and protections. But bipartisanship not the way of things
before an election.

Attacking Shorten, Scott Morrison accused him of being preoccupied
with a “fringe issue”.

Morrison said the matter would be dealt with “through a normal Cabinet
process”. Porter says this process is well underway. Indeed a lot of
it happened under Malcolm Turnbull – Porter says he has been working
on it since he became attorney-general nearly a year ago.

Both the embassy question and the religious freedom report are in
“processes” at the moment.

The government received another prod on the latter when on Monday a
Labor-chaired Senate committee recommended in its majority report that
a ban on religious schools discriminating against gay teachers should
be considered.

This goes much further than the government’s plan – bogged down in
negotiations with Labor – for legislation to prevent discrimination
against gay students. The opposition is expected on Tuesday to push the
government to act immediately on its promise to protect students.

As the Liberals took in the devastating Victorian result, there was
the feeling that the Morrison government was just holding things
together.




Read more:
View from The Hill: Labor’s 55-45% Newspoll lead adds to Liberals’ weekend of woe


Senate president and Victorian Liberal Scott Ryan, who rarely enters controversies given his position as a presiding officer, unleashed a restrained but pointed assault against the right of the party (and rightwing commentators).




Read more:
Senate president Scott Ryan launches grenade against the right


Victorian Liberal backbencher Tim Wilson delivered a sharp message to the coal lovers. “If anybody thinks that there’s this great public sentiment out there that people really deep down hate renewables and they’re hugging something like coal, I say again — get real”.

That immediately encouraged a rerun of Morrison’s coal hugging in parliament.

In question time the Prime Minister was decidedly shouty and aggressive.

And, despite the crossbenchers now looming large in his world, he
didn’t make time to sit in the chamber for Kerryn Phelps’ maiden
speech. He had other engagements, his office said.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

View from The Hill: Labor’s 55-45% Newspoll lead adds to Liberals’ weekend of woe


Michelle Grattan, University of Canberra

Labor has maintained a 55-45% two-party lead in the latest Newspoll,
in a weekend of woe for the Morrison government, which is trying to
play down the federal contribution to the Victorian Liberal wipeout.

The Coalition’s primary vote fell for the third consecutive
time, to 34%, in a poll that if replicated at an election would see a loss of 21 seats. Labor’s primary vote remained at 40%. One Nation rose 2
points to 8%; the Greens were steady on 9%.

Scott Morrison boosted his lead over Bill Shorten as better PM to 12
points, leading 46-34% compared with 42-36% a fortnight ago. Morrison
has a net positive satisfaction rating of plus one, improving from
minus 8 in the last poll.

The poll will reinforce Coalition gloom after Saturday’s Victorian
election which saw a swing to the Labor government estimated by ABC
election expert Antony Green at around 4% in two-party terms. While an
ALP win was expected, the stunning size of it came as a surprise.




Read more:
Labor has landslide win in Victoria


Even assuming the Victoria election was mainly won (or lost) on state
issues, there are clearly federal factors and lessons in this smashing
of the Liberals, which if translated federally would potentially put at risk half a dozen Victorian seats.

As Premier Daniel Andrews said, Victoria is a “progressive” state. It
stands to reason that Liberal infighting and the dumping of Malcolm
Turnbull, the trashing of the National Energy Guarantee and the
talking down of renewables, and the broad rightward lean of the
federal Coalition alienated many middle-of-the-road Liberal voters.

The anecdotal evidence backs the conclusion that Victorians were
sending strong messages to the Liberal party generally, including the
federal party.

But are the federal Liberals willing to hear those message? And anyway,
does Morrison have the capacity to respond to them effectively?

Morrison has so far demonstrated no personal vision for the country,
and his play-for-the-moment tactics are being increasingly seen as
unconvincing.




Read more:
Victorian Labor’s thumping win reveals how out of step with voters Liberals have become


Morrison took the unusual course of not saying anything about Victoria
on Saturday night or Sunday. He will meet the Victorian federal
Liberals on Monday to discuss the outcome.

Ahead of that meeting Treasurer Josh Frydenberg – who is from Victoria and is deputy Liberal leader – played down the federal implications. While conceding “the noise from Canberra certainly didn’t help”, he claimed in an ABC Sunday night interview that the lessons to be learned federally were about grassroots campaigning and the need to rebut “Labor lies”. He would not concede a recalibration of policy was needed.

Some in the right will try to write Victoria off as unrepresentative
of the nation, just as they did Wentworth. This flies in the face of
reality – there were big swings in the eastern suburbs and the sandbelt,
the sort of areas the Liberals would expect to be their middle class strongholds.

The government needs to pitch much more to the centre in policy terms
but it will be hard to do so.

Given its current positioning, how could it sound moderate on energy
and climate policy? It can’t go back to the NEG. It is stuck with its
obsessions about coal and its distrust of, or at least equivocation
about, renewables, as well as its business-bashing threat of
divestitures.

On issues such as coal and climate change, the party’s eyes have been
turned obsessively to Queensland, where there is a raft of marginal
seats, without sufficient regard to those in Victoria and NSW. Even in
relation to Queensland, there has been a failure to adequately
recognise that that state is not monolithic when it comes to issues
and priorities.

The right is unlikely to stop its determined effort to take over the
party, whatever the cost. Indeed some on the right will argue that the Morrison strategy should be to sharpen the policy differences further, rather than looking to the centre.

The right’s mood will be darkened by the Saturday dumping of rightwing senator Jim Molan to an unwinnable position on the NSW Liberal ticket. Molan has pulled out from Monday’s Q&A program; the ABC tweeted that he’d said he could “no longer defend the Liberals”.

As if the Victorian result was not sobering enough, the government
this week begins the final fortnight of parliament for the year in minority
government, with independent Kerryn Phelps sworn in on Monday as
Turnbull’s replacement in Wentworth.

The government wants the focus on national security legislation but
other issues will be political irritants for it.

Labor and crossbenchers are pushing the case for a federal
anti-corruption body – the sort of initiative that would appeal to
voters highly distrustful of politicians.

Crossbenchers Cathy McGowan and Rebekha Sharkie will introduce a
private member’s bill. 34 former judges have signed an open letter
advertisement calling for a national integrity commission.

They said: “Existing federal integrity agencies lack the necessary
jurisdiction, powers and know-how to investigate properly the
impartiality and bona fides of decisions made by, and
conduct of, the federal government and public sector.”

The government is resisting a new body but will need some convincing
alternative response.

The government will also be under pressure over Morrison’s pledge to
legislate to remove the opportunity for religious schools to
discriminate against gay students. Negotiations with the opposition
have been at an impasse, although the government says it still wants
legislation through this fortnight.

In the middle of the fortnight Morrison attends the G20, where he is
expected to have a meeting with Donald Trump. One would assume they
will canvass the Australian government’s consideration of moving our
embassy to Jerusalem, with Trump urging Morrison to go ahead with
the controversial move.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Senate president Scott Ryan launches grenade against the right


Michelle Grattan, University of Canberra

Senate president Scott Ryan has called out the right within the
Liberal party and among commentators, declaring that Liberal voters
“don’t want views rammed down their throats”.

In a trenchant critique of federal influences in the rout of the
Victorian Liberals, Ryan, a former vice-president of the state
division, pointed to the swings in seats “that are the cradle of the
Liberal party”.

They were areas that were in federal seats like Goldstein, Higgins,
Menzies and Kooyong, he told the ABC.

These voters were the “real base of the Liberal party. They sent us a
message,” he said. “They don’t want litmus tests for what it means to be a real Liberal”.

Many Liberal voters were fairly conservative in their own lives,
raising kids, working hard, running small businesses, supporting
strong local communities. “But they’re pretty liberal in their
political outlook. They don’t want views rammed down their throat, and
they don’t want to ram their views down other people’s throat.

“And that has historically been the Liberal way. We’re often
conservative in our disposition – I am – but I’m very liberal in my
political outlook”.

He said part of the problem was “tone” – while Victoria was a state
election some of the noise that came out of Canberra “did strongly
influence the scale of the loss, where it happened”.

Ryan said after the loss of Wentworth some had “tried to dismiss those
voters as not part of real Australia … labelling people, dismissing
them – that’s not the Liberal way.

“I want to cast the net wide in the Menzies and Howard tradition [so]
as to give people a reason to be Liberals, not come up with litmus
tests and say if you don’t hold this view on a social issue, or if you
don’t hold this particular view on climate change or renewable energy,
then somehow you’re not a real Liberal.

“This is not the path to electoral success. And I’m sick of being
lectured to by people who aren’t members of the party, by people who
have never stood on polling booths, about what it means to be a real
Liberal”.

Ryan declined to name names, but his reference to the media was
directed at commentators on Sky in the evening and the Sydney shock
jocks.

Liberal voters wanted the government to focus on their issues and “I
think the federal government is doing that,” he said.

Ryan said that the days before Wentworth “were distracted … talking
about what some people call religious freedom”. In Victoria people
weren’t raising anti-discrimination law with him on polling booths.

“What we need to do is say the Liberal party has people with various
views, and all of those views can be accommodated, and internally the
idea of compromise is actually a good thing”.

Too often compromise was seen as a sell out, he said. But John Howard
and Peter Costello had compromised to achieve historic tax reform;
Peter Reith had compromised with the Australian Democrats to get
industrial relations change.

“This idea – and I think this is another thing that a lot of our
voters are tired of – that somehow to compromise to address a problem,
and move on to one of the other plethora of problems governments need
to address – that is not selling out – that is getting the jobs done”.

Tim Wilson, the member for Goldstein, criticised those who were being
ideological about energy policy.

“If anybody thinks that there’s this great public sentiment out there
that people really deep down hate renewables and they’re hugging
something like coal, I say again — get real,” Wilson told Sky.

He said he had sat on polling booths where “every second person either gave you deadly silence, which is a very cold, deadly silence, or there were people mentioning energy, climate, or the deposing of the prime minister”.

Victorian senator Jane Hume wrote in the Australian Financial Review:
“Our quest should always be to raise the standard of living – whether
through economic policies, energy, health or education. If we allow
good policy to be infiltrated by even the perception of an ideological
crusade, Labor will win the messaging war”.

After the Prime Minister met Victorian Liberal federal MPs on Monday
morning Treasurer Josh Frydenberg, who is deputy Liberal leader, said
“We had a good, honest discussion about lessons to be learned from the
state campaign. As a group we will continue to be focused on
delivering for our local communities.”The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Labor’s battery plan – good policy, or just good politics?



File 20181122 182059 wylcnu.jpg?ixlib=rb 1.1
With the right settings, Labor’s new scheme could benefit householders as well as the grid itself.
Shutterstock.com

Guy Dundas, Grattan Institute

Federal Labor obviously likes the politics of giving rebates of up to A$2,000 each to 100,000 households of prospective voters so they can install domestic batteries. But is this good policy that will support Australia’s transition to a reliable, affordable, low-emissions energy system, or is it just middle-class welfare?

The Grattan Institute has previously been critical of solar subsidies similar to this program. In 2015 we found that household solar photovoltaic (PV) installations driven by state and federal government subsidies cost Australia around A$9 billion. Many solar incentive programs were uncapped, and their costs blew out as the price of PV systems dropped rapidly.

The parallels with battery technology are clear: batteries may be expensive and uncommon today, but many commentators expect them to drop rapidly in price.




Read more:
Households to get $2000 subsidy for batteries under Shorten energy policy


More recently, my colleagues and I have lamented the Victorian government’s return to the bad old days of solar subsidies. Its Solar Homes program promises A$1.24 billion in subsidies over 10 years and would roughly triple the level of household solar in Victoria. Yet most households will be financially better off installing solar even without this subsidy. If fully implemented, it will be a great waste of taxpayers’ money.

The case for public subsidies for household batteries is stronger than for household solar panels. Batteries are better able to help cut the cost of the entire energy system and so don’t just benefit the people who install them – they also benefit electricity consumers more generally. By releasing stored power when most needed, batteries can reduce reliance on expensive “peaking” power plants that operate only at times of high demand. And they can reduce the cost of expanding network capacity to supply all customers at peak times.

By contrast, solar primarily eats into midday demand, which is already low due to the output of the large existing fleet of solar panels. While solar has historically reduced peak demand to some degree, the Australian Energy Market Operator considers that this effect is reducing as solar has pushed peak demand later in the day.




Read more:
Slash Australians’ power bills by beheading a duck at night


Impact of rooftop solar PV on peak demand.
AEMO 2018, The NEM Reliability Framework

In a perfect world, households would have enough private incentive to install batteries when they benefit the entire system. If households faced higher electricity prices at times of peak demand, they would be rewarded for reducing system-wide costs by installing batteries.

But we do not live in this perfect world. Governments are reluctant to mandate that households pay higher prices during peak periods, and retailers find it hard to convince households to accept these more complex tariffs. Cost-reflective pricing is unlikely to become widespread any time soon, meaning there is a case for public subsidy to household batteries – provided the subsidies are capped, and end when battery prices inevitably fall.

Using smart controls to coordinate multiple batteries can maximise their benefits. These so-called “virtual power plants” allow the controller to reduce a household’s draw on the grid at peak times, thus reducing costs for both the household and the system. Federal Labor should increase the benefits of its policy by mandating that people who receive a subsidy participate in such a scheme, and by targeting installations to areas where the network most needs support.




Read more:
Virtual power plants are in vogue, but they can be like taking a sledgehammer to a nut


On balance, federal Labor’s policy appears to be a sensible step towards a smarter, lower-emissions electricity grid. It can be tweaked to maximise benefits to the whole system, not just to the lucky households that get government assistance. And its cost is capped, which reduces the risk of the sort of cost blowouts that have plagued solar subsidy schemes.

Unlike some of the Coalition’s policies, such as its plan to underwrite new generation, Labor’s battery policy is likely to help rather than hinder Australia’s energy transition.The Conversation

Guy Dundas, Energy Fellow, Grattan Institute

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Grattan on Friday: Labor’s energy policy is savvy – now is it scare-proof?


Michelle Grattan, University of Canberra

Hours before Bill Shorten delivered his energy policy on Thursday,
Scott Morrison’s office had circulated an attack.

Labor’s plan was for a “carbon tax”; the proposed subsidy for “pink
batteries” would leave households “$8000 out of pocket”.

It was a wild broadside that said much about how the government hopes
a massive scare campaign can be an effective front line weapon in next year’s election.

In 2016 Malcolm Turnbull declined to run a heavily negative campaign,
especially against Shorten personally. When things went pear-shaped he
was strongly criticised for his approach.

Tony Nutt, Liberal federal director at the time, speaking soon after
the election, defended the approach by saying research had confirmed
voters were sick of political aggression and wanted to see a positive
vision and plan. But others in the party were not convinced.

Labor, for its part, did very well with its “Mediscare”.

In more desperate circumstances and with a new leader, the Liberals at
the next election will go all out stoking fears. Morrison is a much
better negative campaigner than Turnbull ever could be: he delivers
lines sharply and is not troubled by inconvenient nuance.

The government, assisted by the cooling of the housing market, has
been stepping up its warnings about the effects on house prices of
ALP’s negative gearing plan. Labor’s proposed crackdown on cash
refunds from dividend imputation is also a ripe target, especially for
agitating retirees (although pensioners are exempt).




Read more:
Pensioners would retain cash refunds on franked dividends under Labor backdown


And now that Shorten has released the energy policy this week, the
Coalition is reaching back into the past for lines and spectres.

Labor’s promise to subsidise home batteries ($2000 for
households with incomes under $180,000) is dubbed “pink batts to pink batteries” to trigger memories of Kevin Rudd’s ill-prepared policy that cost several lives.

Energy Minister Angus Taylor went for the ultimate try-on, when he
posed outside the Tomago Aluminium Smelter in Newcastle and claimed
that “if all of Bill’s batteries were installed, it would keep this
smelter, this business, going for less than 15 minutes”. “Bill’s
batteries” are not, of course, aimed at powering Tomago.

The old line about the ALP putting a “wrecking ball” through the
economy with its policy is getting a fresh workout.




Read more:
Households to get $2000 subsidy for batteries under Shorten energy policy


In crafting its energy policy, Labor is drawing on different, more
recent history – the widespread support from the business community
and other stakeholders for the National Energy Guarantee that the
Coalition abandoned amid its leadership meltdown.

Shorten says a Labor government would try to get bipartisan agreement for a NEG, but not rely on doing so.

In an interventionist approach, Labor proposes an additional $10
billion for the Clean Energy Finance Corporation; its investments
would support large scale generation and storage projects.

Labor’s investment would be in renewables, pushing towards its target
of 50% of Australia’s energy coming from renewables by 2050. In
contrast, the government is planning early next year to have a “short
list” of dispatchable power projects, focusing on coal, gas and hydro,
that it will look at underwriting.

An ALP government would also provide $5 billion for “future-proofing”
the energy network – the transmission and distribution systems.

Labor’s energy policy is in the context of its commitment to a much
more ambitious emissions reduction target than the government has – a
45% economy-wide reduction by 2030 on 2005 levels, compared with the
Coalition’s 26%-28%.

This week’s announcement is about the energy
sector only – the opposition will release soon its climate change
policies to lower emissions in other sectors including
transport. The government, homing in on the 45% target, is conjuring up scares about the nation’s cattle herd and the like.

Labor claims its energy policy would drive power prices down; the
government says it would drive them up. In fact no one can be sure
what will happen in the next few years in a situation where we are
undergoing a major transition to a different energy mix.

Nor is it clear which side will win the coming debilitating round of the
energy-climate wars.

The ALP would be unwise to underestimate the power of the scare. On
the other hand, the government’s own policy looks like a
shredded garment now it has torn up the NEG. Its “big stick’,
including the threat of divestitures, and its promised “short list” of new
dispatchable power projects don’t really cut it.

Labor would be heartened by the early responses its policy is
receiving from business groups, despite their reservations.

In a crack at the government’s threat, the Business Council of
Australia welcomed “Labor’s commitment not to support heavy-handed,
intrusive changes into the energy sector such as forced divestiture”.

Most notable in the reaction of these groups, however, was their
hankering for the NEG.

The Ai Group said a revised NEG was “still achievable” and “would be
greatly preferable” to a government directly underwriting new
generation, versions of which were being proposed by both major
parties. The BCA was pleased Labor was taking the NEG to the election,
reiterating that it was “a credible, workable, market-based solution
to the trilemma of affordability, reliability and reducing our
emissions”. The Australian Chamber of Commerce and Industry was
likewise encouraged by the reference to the NEG.

This indicates that Labor’s decision to include the NEG in its plan is
not just sound on policy grounds but is politically savvy. By keeping
alive the NEG option, Labor has reached out to business.

Surely many Liberals are now starting to think that far from giving
themselves a break against Labor by rejecting the NEG, they may have
put themselves at a serious disadvantage which could be hard to
overcome even with a fierce scare campaign.

This also raises an interesting question for after the election, if
Labor wins. Given the widespread support for a NEG, would a Coalition
opposition persist in rejecting it? Much would depend on the factional
make up of the Liberal party of the day.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Households to get $2000 subsidy for batteries under Shorten energy policy


Michelle Grattan, University of Canberra

A Labor government would subsidise households to install batteries as part of the ALP’s energy policy to be unveiled by Bill Shorten on Thursday.

If Labor wins next year’s election, it would provide from 2020 a A$2000 rebate for 100,000 households, with annual incomes of less than $180,000, to buy and install battery systems. It would also provide low cost loans.

The ALP puts its emphasis on boosting the use of renewables, in a policy that keeps the National Energy Guarantee – abandoned by the government in the leadership meltdown – as an option on the table. The opposition indicates it is prepared to implement the NEG but its policy is providing for the future if agreement on it cannot be reached.

The ALP estimates the battery subsidy would triple the number of battery systems in Australian households. The policy sets a national target of one million household battery installations by 2025.

“The massive boost will also help manufacturers scale up production and reduce their costs”, Shorten and energy spokesman Mark Butler said in a statement.

They said the ALP policy would “help Australians slash their power bills.”

“The Smart Energy Council estimates that new household solar and batteries would allow most homes to save more than 60 per cent off their power bills”, Shorten and Butler said.

“Australians love renewable energy because they know it saves them money and it’s good for the environment”, they said, pointing out that household solar installation had rising from 7000 homes in 2007 to 1.8 million today.

“Supporting the installation of more household battery systems is the next big step in helping families keep their energy bills lower. When the sun goes down, or when electricity usage is at its peak, consumers can draw on their own stored energy”, Shorten and Butler said.

They said this was good for both consumers and the environment. People gained more control over their power bills, and cheaper and cleaner energy would help Australia achieve 50% of power from renewables by 2030.

A Labor government would also invest $100 million in a Neighbourhood Renewables Program, so renters and people in social housing could benefit from cheaper and cleaner energy.

The cost of the battery subsidy and the neighbourhood scheme is estimated at $215.9 million over the current forward estimates. The costing has been done by the independent Parliamentary Budget Office.

Shorten and Butler said Labor would “establish community power hubs to support the development of renewables projects in local communities – such as solar gardens on apartment rooftops, community wind farms, energy efficiency upgrades for social housing and grants for community groups to pilot new projects.”

They said the new initiatives built on Labor’s commitments to crack down on price gouging by power companies.

Labor’s policy on energy would create thousands of jobs in the renewable industry, they said.

In a speech to be delivered on Thursday, Shorten stresses a Labor government would seek bipartisanship on the NEG.

“We want a meaningful NEG that actually lowers prices, reduces pollution, and boosts renewables” he says in an extract released ahead of delivery.

“If I am elected as prime minister, I will sit down with the new opposition leader and the crossbench to talk about a way we can move forward with this framework,”

“But let’s be clear: we will work with the Coalition – but we will not wait for them. Our willingness to cooperate on a market mechanism doesn’t mean everything else gets put on hold,” Shorten says.

He says a Labor government would be prepared to directly underwrite and invest in cleaner cheaper power.

“We will prioritise renewables and support firming technology power like storage and gas. Labor will invest in new generation, in better transmission and distribution – because we realize this vital nation-building work cannot be left up to the big power companies.” Labor’s plan would deliver affordability, reliability and sustainability, Shorten says.

Labor’s battery subsidy program would be reviewed after two years, in light of projected falls in battery costs and to assess progress towards the one million new battery installations by 2025 target.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Poll wrap: Labor’s worst polls since Turnbull; chaos likely in Victorian upper house



File 20181120 161641 45d9o3.jpg?ixlib=rb 1.1
This week’s Fairfax-Ipsos poll gives Labor a 52-48 lead over the government, the best result for the Coalition since Scott Morrison became PM.
AAP/Dan Peled

Adrian Beaumont, University of Melbourne

This week’s Fairfax Ipsos poll, conducted November 14-17 from a sample of 1,200, gave Labor just a 52-48 lead, a three-point gain for the Coalition since October. Primary votes were 37% Coalition (up two), 34% Labor (down one), 13% Greens (down two) and 5% One Nation (steady). As usual, the Greens are too high in Ipsos and Labor too low.

This poll is the Coalition’s best result from any pollster since Malcolm Turnbull was ousted. Last week, Newspoll gave Labor a 55-45 lead, and it is unlikely Labor lost three points in a week. Ipsos is the most volatile Australian pollster. However, Essential (see below) confirms Ipsos by also shifting to a 52-48 lead for Labor.

Respondent allocated preferences in Ipsos were 53-47 to Labor, one point better for Labor than the previous election method. Under Turnbull, Labor usually performed worse on respondent preferences, but the three Ipsos polls under Scott Morrison have Labor tied or ahead of the previous election method using respondent preferences. A stronger flow to Labor from the Greens and non-One Nation Others could be compensating for weaker flows from One Nation.

48% approved of Morrison (down two), and 36% disapproved (up three), for a net approval of +12. Last week’s Newspoll gave Morrison a -8 net approval; although Ipsos gives incumbent PMs much better ratings than Newspoll, the difference is very large this time. Bill Shorten’s net approval was up one point to -7. Morrison led Shorten by 47-35 as better PM (48-35 in October).

46% thought Muslim immigration should be reduced, 35% remain the same and 14% increased. In October, a question about all immigration found 45% wanted it reduced, 29% wanted it to stay the same, and 23% increased.

47% thought the government’s main priority on energy policy should be reducing household bills, 39% reducing carbon emissions and 13% reducing the risk of power blackouts. Labor will attempt to convince people that clean energy can be consistent with cheap energy.

I think the shift to the Coalition is more likely due to last week’s economic data than the Bourke Street attack. On November 14, the ABS reported September quarter wage growth data; according to The Guardian’s Greg Jericho, wages are growing more than inflation for the first time since 2013. On November 15, the ABS reported that 33,000 jobs were added in October, with the unemployment rate stable at 5.0%.

On November 14, Westpac reported that consumer sentiment increased 2.8% from October to 104.3 in November. If people feel good about their personal economic situation, it is more likely they will feel good about the government.

Essential: 52-48 to Labor

This week’s Essential poll, conducted November 15-18 from a sample of 1,027, gave Labor a 52-48 lead, a two-point gain for the Coalition since last fortnight. Primary votes were 37% Coalition (up one), 35% Labor (down four), 11% Greens (up one) and 7% One Nation (up one).

44% said their vote was very firm and unlikely to change, including 50% of Labor voters and 46% of Coalition voters.

By 35-28, voters thought the Liberal government and its ministers were poor, but they also thought the Labor opposition and its shadow ministers poor by 33-28. By 36-35, voters thought the Labor team would do a better job of governing than the Liberal team.

On a range of issues, more people thought the government was not doing enough than doing enough, particularly on the ageing population (67-17), transitioning to renewable energy (64-14) and affordable housing (64-16).

In additional questions from last week’s Newspoll, voters thought Shorten and Labor had the best approach to improve housing affordability by 45-35 over Morrison and the Coalition. By 47-33, voters were in favour of reducing negative gearing tax concessions (54-28 in April 2017).

Micro parties likely to win several seats in Victorian upper house

The Victorian election will be held on November 24. There have been no statewide media-commissioned polls since a late October Newspoll (54-46 to Labor). A ReachTEL poll for a left-wing organisation, conducted November 13 from a sample of 1,530, gave Labor a 56-44 lead, which would be a four-point gain for Labor since an early October ReachTEL poll for The Age.

I would like to see a media poll before concluding that the Victorian election will be a blowout win for Labor, but Labor is likely to win.

The Victorian upper house has eight five-member electorates. A quota is one-sixth of the vote, or 16.7%. During the last term, Labor never proposed any reforms to the upper house group voting system. As a result, there are many micro parties who are swapping preferences with each other so that one of them has a good chance of election.




Read more:
Victorian ReachTEL poll: 51-49 to Labor, and time running out for upper house reform


According to analyst Kevin Bonham’s simulations of upper house results, seven micro party representatives could be elected. While the particular micro party that wins could change, the overall numbers probably won’t unless the major parties and Greens do much better than expected, or there is a much higher rate of below-the-line voting.

The Greens in particular appear likely to lose seats that they would win with a sensible system. Labor may well have shot themselves in the foot by sticking with group ticket voting; with a sensible system, Labor and the Greens would probably win an overall upper house majority. Conservative micro party members are likely to stall progressive legislation.

It is easy to vote below-the-line in Victoria, as only five numbers are required for a formal vote, though voters can continue numbering beyond “5”. I recommend that voters number at least five boxes below-the-line, rather than voting above-the-line, where parties control their voters’ preferences. If enough people vote below-the-line, the micro parties’ preference harvesting could be thwarted.

UK’s Brexit debacle could lead to Labour landslide; Greens surge in Germany

Last week, UK PM Theresa May did a deal with the European Union regarding Brexit, but Brexit Secretary Dominic Raab and other ministers resigned in protest. It is likely that the UK House of Commons will reject the deal, owing to opposition from both the hard right and the left. A “no deal” Brexit is likely to greatly damage the UK economy, and could lead to a Labour landslide.

In March 2018, the German Social Democrats re-entered a grand coalition with the conservative Union parties – the same right/left coalition that governed Germany in three of the last four terms. Both the Union parties and Social Democrats have lost support, but it has gone much more to the Greens than the far-right AfD.

You can read more about Brexit and the German Greens’ surge on my personal website.The Conversation

Adrian Beaumont, Honorary Associate, School of Mathematics and Statistics, University of Melbourne

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Shorten would need non-Green crossbench to pass bills in Senate: Australia Institute


Michelle Grattan, University of Canberra

A Labor government would likely have to rely on at least one Senate
crossbencher besides the Greens to pass contested legislation, according to an analysis from The Australia Institute, a progressive think tank.

The analysis, based in part on polling but also on
historical data, suggests that, at best, after next year’s half-Senate
election the ALP and Greens combined could have 38 senators – although more likely they would have 37.

To pass legislation, 39 votes are needed.

Releasing the analysis, the institute’s director, Ben Oquist, said this
meant “the Centre Alliance, or independents like Derryn Hinch or a
potentially re-elected Jacqui Lambie, are likely to wield significant
power”.

The 2016 double dissolution produced a very large crossbench. The
larger quota required in a half-Senate election will make it harder
for micro parties and independents, as will some changes to the
electoral system made in 2016.

Most of the non-Green crossbenchers face election – and defeat.
Victorian senator Derryn Hinch, from the Justice Party, told The
Conversation’s podcast that he had got about 220,000 primary votes
last time but now would need about 400,000. It would be “very tough”,
said Hinch, who is campaigning on the slogan “unfinished business”.




Read more:
Politics with Michelle Grattan: Derryn Hinch on a national ICAC and the Victorian election


The Australia Institute says the Coalition and Labor are each likely
to pick up two seats in each state. The Greens are “well-placed” to
win a seat in each of NSW, Victoria, Queensland, Western Australia and
Tasmania, while One Nation is well-placed to win in Queensland.

“The remaining seat in NSW, Victoria, Western Australia and Tasmania,
and the remaining two seats in South Australia, are likely to be
highly contested,” the analysis says.

In detail, it says

…NSW – The Coalition, Labor and One Nation are competitive for the last seat.

… Victoria – Labor, the Coalition and Derryn Hinch are competitive for
the final seat.

…Western Australia – The Coalition and One Nation are competitive
for the last seat.

… South Australia – The Coalition, Greens, Centre Alliance and One
Nation are competitive for the final two seats.

… Tasmania – The Coalition and Lambie are competitive for the last seat.

“The polling by itself does not suggest that the Coalition will pick
up the third seat in any state, but our historical analysis suggests
that the Coalition is more competitive than the polls alone would
indicate”, the Australia Institute says.

“Another wild card is the high Independent/Other polling. Although
Jacqui Lambie and Derryn Hinch are contenders in their respective
states, there is also the outside but real possibility of independent
or minor party pick-ups in other states as well.”

The institute predicts a Senate after the election with the Coalition
having between 30 and 35, and the ALP 27-29. It predicts the Greens
having 8 or 9 seats, One Nation between 2 and 5, Centre Alliance 2-3,
Australian Conservatives one, and others between 0 and 2.

Since the last election the Senate has had many changes, in the wake
of the citizenship crisis and defections. The Morrison government
needs eight of the 10 non-Greens from the crossbench to pass
legislation opposed by Labor and the Greens.

Oquist stressed that predictions were harder than usual to make
because of the voting system changes and a volatile political climate.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.