The CIS and John Humphreys made a major blunder, before they published their call for carbon taxes
I held this over (it is telling Humphreys and the CIS did not see it), Steve Bracks imposed carbon taxes, and they are destroying capital. They were not called carbon taxes but that is exactly what they are. I have another supporting example, from Japan, just to sheet the crucial point of the impact of carbon taxes on capital.
It is not simply, therefore, Humphreys and the CIS have ignored a mountain of literature demonstrating carbon taxes destroys capital on a massive scale. They did not see in the backyard of Australia a massive fraud that is destroying capital, and it is a carbon tax, with subsidiary carbon taxes. A massive fraud that is visible in Victoria. Remarkable, truly remarkable. There is the CIS, millions of dollars poured into it to do fundamental work in free market economics and defend free markets, and they didn’t spot what is now to be set out, before they published that atrocious tripe.
I wrote on it when Bracks imposed his carbon taxes and stated the impact. What has been noted is the rightwing didn’t, and the bumblers pretending to be Liberal MPS in the parliament of Victoria were too stupid to fight it, so too their advisers, and so too those who have wrecked the Victorian Liberal Party, Kroger and his stick puppets.
Then, it was the Kennett-Stockdale administration made what was to follow possible. Their mistake was they didn’t see the establishment of supply on a true free market basis, with uncompromised property rights. They ‘privatised’ utilities, which is altogether different, and is rooted in the fallacies committed by the neo-classical economists, whose assumptions are pinned to the falsehood of perfect competition.
Firstly, I apologise to Greg Lindsay, and Humphreys. I said the latter was on the CIS payroll. I stand corrected. This does not altogether do away with a problem; it is the donors who pay the CIS
It is very enjoyable writing it up again. Greg Lindsay, you have two headaches, a “ Humphrey’ type headache and a ‘Staff’ type headache. What strength panadol are you taking – knockout strength, for you’ll need it once you have finished reading this.
The Kennett administration split electricity supply into producers and retailers. This isolates producers from consumers, reinforced by regulations. This serves one of the aims of ‘privatisation’; the producers are treated by State ‘government’ and local councils as their slush funds. Revenue extraction and its impact is concealed from the immediate gaze of the public. This is the basis for what Bracks and Brumby then went on to do.
Bracks imposed a per tonne tax on mined coal. On top of this, the production companies and the networks are required, under another “Act” to hand over a percentage over their revenues to the windmill scams. This is not a complete list of the burdens that have been imposed on capital.
To further disguise the above fraud, and it is a massive fraud, the “Essential Services Commission” functions to disguise what is going on by price capping. Pricing fixing was imposed under Kennett. There is much more involved, and requires a concentrated stated, by and (Austrian) school economist to unpack it properly. As it is, I still have occasional chats with a source on how it was all set up and is run. My source once remarked, “it might be botched but, I assure you, it could have been much worse. We prevented that.”
To completely finish things off, Bracks than rammed down another ‘law’ which caps how much new capital a company can invest in its plant, and even that has to be approved by the ‘government’. This provision, 05/06, was imposed at a time when the companies were planning to increase capacity. Bracks dictated they had to cut the scale of the new capital. The force of this is contained in the crucial observation:
Capital required for maintain existing capacity, also building in greater capacity than is currently required into the short term. They build greater capacity to take care of any irregular spikes in demand and long run estimates of demand. This is long term planning.
That is what the Victorian coal fired electricity producers were planning to do, when Bracks stopped in. In other words, he told them they could invest less capital than maintenance required. What does this entail?
It means the destruction of capital for the very reason, failing to meet the capitalisation requirements of maintenance, what those plants are is diminishing assets. The capital is being consumed. This is matched by the falling evaluation of the companies in financial markets, with investors dumping shares in such companies.
At the time, when Bracks imposed this carbon tax, I predicted we would notice it in power blackouts. This last summer, and the 06/07 summer, there have been a number of power cuts, covering large sectors of Melbourne, of up to hours in duration.
Before summer 2006, the companies would issue public statements such as, ‘power line is down due to fallen bough’. Then, blackouts were restricted to a street or at most a few more. The extensive blackouts are different. No explanations were given for any of them, and falling limps did not cause them. They were failure in supply. The reason is given above.
The Govt. might boast of keeping prices low, but those power cuts show the real picture. The problem, the cut in supply has been coerced by Bracks and his chums, because what he did was order nothing less than a destruction of capital in coal driven production. He did it by the imposition of what is a real carbon tax, and he did for that reason.
I pointed out right back when he imposed that carbon tax that that is what he had just dictated. Where were the rightwing; the IPA; the CIS; the HR Nicholls Soc.? Stone silent.
Indeed, one of them, Hugh Morgan, with his pal Ron Walker, hope to make another few billions out of the destruction of the efficient, coal powered electricity producers. They are waiting for the day when Rudd transfers those billions into their bank vaults for a pseudo business called a nuclear power plant.
Bracks’ windmill farms are, as criminal fraud perpetrated against Victorians, also carbon taxes. They divert capital from the coal-based companies and destroy it. Now, all this is confined to Victoria. It won’t be any longer, once Rudd has finished ramming down his Federal carbon taxes.
To reinforce the above:
“Electricity generators have warned that placing an even greater burden on the sector to reduce emissions of carbon dioxide, under a forthcoming official plan, will threaten Britain’s already struggling power network. Power stations and other heavy users of energy fear that they will again be seen as a “soft touch” for a government desperate to meet its ambitious target of a 20 per cent cut in UK carbon dioxide emissions by 2010.” (London Independent)
In February, it was reported, 2006
More coal-fired power plants threaten emissions targets
By TAKAO IKEUCHI,Kyodo NewsAt a news conference in late January, Environment Minister Yuriko Koike voiced her opposition to the construction of a coal-fired power plant planned in Ube, Yamaguchi Prefecture, by Sigma Power Yamaguchi Corp., a new power utility jointly owned by Toshiba Corp. and Orix Corp.
“(The project) seems to be going in a considerably different direction from our pledge under the Kyoto Protocol, and the government’s plans to achieve the target,” she said….In a note presented last week, the ministry asked the Ministry of Economy, Trade and Industry, which oversees power plants, to halve emissions at the plant, virtually calling on METI to order the facility to be converted to an LNG-fired plant.
The Environment Ministry’s stance faces opposition from the power industry, including Sigma Power.
“In line with the state’s guidance, we have worked out power supply plans by balancing stable supply and prices, and environmental conservation. If we were to be suddenly asked to stop using coal, that’s a problem,” said an executive at one utility.
But Shigemoto Kajiwara, chief of the Environment Ministry’s section fighting global warming, remains firm.
“We will continue to express opinions in our environmental assessment to those parties that are large carbon dioxide emitters,” he said.
In the face of the Govt. and its determination to impose a carbon tax, Toshiba and Orix abandoned their plans to build that major coal powered plant. The reason, the Japanese Govt’s. proposed taxes meant the loss of that capital.
Investors in energy companies now face ’sovereign risk’: govts. slashing their savings by carbon tax. What we are seeing is not only capital in those companies being consumed, but also investors in increasing numbers not supply new capital. What would be the point?
Carbon taxes are destroying capital. It is occurring in Victoria, with the energy companies. Carbon taxes are stopping new capital investment. This is now. This is before Rudd’s souped up national carbon tax. A tax which is already seeing the coal companies writing off an additional $10b. The CIS did not notice all this! Humphreys is competely oblivious to it. The position of Humphreys and the CIS is indefensible.
Greg Lindsay has no choice. He has to denounce the paper. He has to rectify it with a sound paper that does the work the CIS has so far failed miserably at.
I had intended to develop this item a tad more, but a few things intervened. Yet, the above suffices. On Tuesday, I resume ripping heads of, with few more items on capital destruction by carbon taxes.
Graeme Bird wrote:
“Investors in energy companies now face ’sovereign risk’: govts. slashing their savings by carbon tax. What we are seeing is not only capital in those companies being consumed, but also investors in increasing numbers not supply new capital. What would be the point?”
This is precisely what I’m trying to tell people. That this energy-deprivation campaign has many facets to it. And they don’t need to be able to have a total ban on coal to be able to acheive their goals of hobbling us.
Its just like the anti-DDT campaign. They didn’t need to totally ban all the DDT production in the world to kill many tens of millions of kids.
A little bit of dicouragement here, some stiff-arming there, some closed factories over there, scare campaigns here and there, getting the right people on and off a few committees.
Once these leftist goons settle on what they are about they can use a myriad of small measures to screw us up.
Likewise with the energy-deprivation-campaign. Preceding as it does the global warming ritualised-lying by two decades or so. They don’t need to have total official control. Protesting here and there, legal action, zoning, scaring people for no good reason, damaging certain peoples careers. Its a whole myriad of small measures.
And the carbon tax is just the icing on the cake when all these other measures are already in place.
They’ve scared the crap out of people about nuclear. And now they’ve demonised the only other viable fuel we have to expand our energy-production.
We need in a great hurry both massive nuclear and hydrocarbon energy expansion. And these goons have neutralised both of these.
Posted on 08-Mar-08 at 1:08 am | Permalink
John Humphreys wrote:
You still haven’t answered my question. Is it too difficult for you?
Congrats on find a “carbon tax” in Victoria. There is already a price on carbon in many places around the world, including europe and many states in America. I guess they must have had a “catastrophy” now.
And we already have a tax on electricity in Australia. It’s called a GST. Perhaps you’ve heard of it. Presumaly it lead to “catastrophy” in 2001.
And if you’re in the mood for admitting mistakes, I also never said that you met Gerry.
Posted on 09-Mar-08 at 12:38 pm | Permalink
Graeme Bird wrote:
What question is that Humphreys? I suspect its been answered a number of times and you just ignore what you don’t want to register.
Posted on 09-Mar-08 at 1:26 pm | Permalink
Graeme Bird wrote:
Imagine pushing policy on the basis that its not quite as bad as the idiotic proposed leftist policy?
Incredible. What a phoney basis upon which to develop policy. Now what was that question again Humphreys?
Posted on 09-Mar-08 at 1:29 pm | Permalink
John Humphreys wrote:
Which do you prefer — a high fuel tax and no electricity tax… or a low fuel tax and a low electricity tax?
Stop rambling churkey. Just answer.
Posted on 09-Mar-08 at 10:06 pm | Permalink
Graeme Bird wrote:
Neither. The answer is neither and the answer is always going to be neither.
The question is stupid. Its an idiots question and not relevent to the problem at hand.
This is your argument for a carbon tax?
Thats just as idiotic as your contention that I have to choose between stupid warming projections, none of which have any basis for them.
Face it Humphreys.
You are an idiot.
Posted on 10-Mar-08 at 2:16 am | Permalink
Graeme Bird wrote:
There is never an excuse for a carbon tax. Here are a few bureaucracies you can close down immediately, without even hurting anyone, before you consider anything as idiotic as a carbon-tax:
(Australian Population Health Development Principal Committee
Anglo-Australian Telescope Board
ASC Pty Ltd
AusIndustry
Australia and New Zealand Food Regulation Ministerial Council
Australian Agency for International Development
Australian Broadcasting Corporation
Australian Bureau of Agricultural and Resource Economics (ABARE)
Australian Centre for International Agricultural Research (ACIAR)
Australian Communications and Media Authority (ACMA) (ACMA)
Australian Community Pharmacy Authority
Australian Competition and Consumer Commission (ACCC)
Australian Competition Tribunal
Australian Energy Regulator
Australian Fair Pay Commission (
Australian Film Commission (AFC)
Australian Hearing (AH)
Australian Industrial Relations Commission
Australian Industry Development Corporation
Australian Institute of Family Studies
Australian Institute of Health and Welfare
Australian Postal Corporation (APC Australia Post)
Australian Public Service Commission
Australian Securities and Investments Commission (ASIC)
Australian Sports Commission (ASC)
Australian Sports Foundation Ltd
Australian Trade Commission (Austrade) (AUSTRADE)
Australian Wine and Brandy Corporation (AWBC)
Bureau of Rural Sciences (BRS)
Bureau of Transport and Regional Economics.
Centre for Environment and Life Sciences
Canberra Business Centre
Coal Mining Industry (Long Service Leave Funding) Corporation Comcare (COMCARE)
Commonwealth Scientific and Industrial Research Organisation (CSIRO)
Cotton Research and Development Corporation (CRDC)
Dairy Adjustment Authority
Department of Agriculture, Fisheries and Forestry (DAFF)
Department of Education, Employment and Workplace Relations (DEST)
Department of Employment and Workplace Relations (DEWR)
Department of Families, Housing, Community Services and Indigenous Affairs
Department of Health and Ageing
Department of Human Services (DHS MHS)
Department of the Environment, Water, Heritage and the Arts (DEW)
Department of Transport and Regional Services (DOTARS)
Department of Transport and Regional
Energy Technology
Equal Opportunity for Women in the Workplace Agency (EOWA)
Export Finance and Insurance
Export Wheat Commission (EWC)
Film Australia Limited (FAL) (
Film Finance Corporation Australia
Food Science Australia
Food Standards Australia New Zealand (FSANZ)
Forest and Wood Products Australia Limited (FWPRDC FWPAL)
Geoscience Australia
Grains Research and Development Corporation (GRDC)
Grape and Wine Research and Development Corporation (GWRDC)
Health Services Australia
ICT Centre (Information and Communication Technologies)
Industrial Relations Court of Australia
Land and Water
Land and Water Australia (Land & Water Australia)
Livestock Industries
Marine and Atmospheric Research
Materials Science and Engineering
Mathematical and Information Sciences
Meat and Livestock Australia (MLA)
Medibank Private Ltd 1
Medicare Australia
Molecular and Health Technologies
Murray-Darling Basin Commission
Canberra Business Centre ACT 2610
National Collaborative Research Infrastructure Strategy (NCRIS)
National Competition Council (NCC)
National Gallery of Australia (NGA)
National Health and Medical Research Council (NHMRC)
National Land and Water Resources Audit
National Transport Commission
National Water Commission
Office of Best Practice Regulation
Office of Health Protection
Office of the Australian Building and Construction Commissioner (ABCC)
Office of the Productivity Commission
Office of the Renewable Energy Regulator
Petroleum Resources
Pharmaceutical Benefits Remuneration Tribunal (PBRT) (
Plant Industry
Private Health Insurance Ombudsman
Productivity Commission
Professional Services Review
Canberra Post Business Centre,
Questacon?The National Science and Technology Centre (NSTC)
Remuneration Tribunal
Rural Industries Research and Development Corporation (RIRDC)
Special Broadcasting Service Corporation (SBS) (SBS)
Sugar Research and Development Corporation (SRDC)
Sustainable Ecosystems
Tasmanian Freight Equalisation Scheme Review Authority (TFESRA)
Textile and Fibre Technology
Therapeutic Goods Administration
Transport Certification Australia Ltd
Workplace Authority.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
So what is the relevance of this stupid question?
Posted on 10-Mar-08 at 2:28 am | Permalink
John Humphreys wrote:
Answer the question churkey. It’s an easy question. Even you should be able to answer it. If you’re not scared.
Answer the question.
Posted on 12-Mar-08 at 2:20 am | Permalink
Graeme Bird wrote:
Its not about me churkey-John. Its not about my personal preferences you idiot.
Now you have to go and learn economics. You have to learn about GROSS INVESTMENT, AUSTRIAN CAPITAL THEORY, THE STRUCTURE OF PRODUCTION, THE LENGTHENING OF THE STRUCTURE OF PRODUCTION, GROSS INVESTMENT AND PRODUCTIVE EXPENDITURE.
And you are going to have to address the points I made. As well as Gerry’s main point which you have studiously ignored.
Posted on 12-Mar-08 at 6:03 am | Permalink
Graeme Bird wrote:
Still nowhere do I see you addressing my very many supplementary arguments.
“SAY NO TO THEFT-NEUTRALITY.”
Thats my new bumper-sticker.
Humphreys seems to believe that he gets to nuance the policies he pushes. But Humphreys has admitted that he does not know that his policy, even as advertised, would create economic benefits…. HENCE WHAT IS THE POINT OF IT??????
Clearly its thin-edge-of-the-wedge advocacy.
Which means that Humphreys is a CO2-bedwetter or he’s conciously selling us out to the cheering of the leftists over at club sissy. That is to say he’s two-tribes-triangulating.
If there is no economic benefits…. by Humphreys OWN ESTIMATION then he crafted this specifically as appeasement and thin-edge-of-the-wedge promotion.
How could it be otherwise?
But in the real world this policy mix will be immensely harmful for reasons discussed elsewhere that Humphreys will not address.
Posted on 14-Mar-08 at 2:46 am | Permalink