Monday, February 23, 2009

Hockey - the carbon target is too low

Shadow Treasurer Joe Hockey has opened an apparent division within the Opposition, describing the government's carbon emissions reductions target as "very low".

The proposed emissions trading scheme was condemned as recently as Friday by Shadow Attorney General George Brandis who said it would send jobs offshore.

The government has put forward a scheme designed to cut emissions by 5 per cent by 2020, and by up to 15 per cent depending on the outcome of the United Nations conference on climate change to be held in Copenhagen in December.

The scheme is due to go before the Senate in May.

Speaking on ABC TV Mr Hockey described the Opposition's position as detailed and comprehensive...

"We believe that global warming is occurring and we believe that human beings have contributed to it," he said.

"The question is how you get about doing something about it."

"And now that China is the biggest emitter in the world and yet made no commitment to Kyoto or subsequently, everything does depend on Copenhagen at the end of this year, and yet we've got an Australian Government that is in that grey twilight area of having a very low target but wanting to lead the world."

Greens Deputy Leader Christine Milne welcomed the Shadow Treasurer's observation that 5 per cent was "very low" but asked what higher target he had in mind.

"Playing politics with climate targets is a dangerous game. The Australian people are impressively informed. They will not be impressed by an Opposition trying on green clothing but with coal dust still all over its hands," she said.

“The fact that the Opposition is clearly in disarray over climate change is bad for Australia's democracy."

"It makes no sense that, while some key frontbenchers are calling the Government's emissions target weak, others are still bizarrely attacking one of the Government's few sensible climate policies – the roll-out of ceiling insulation across the country."

Treasurer Wayne Swan last week asked a parliamentary committee to inquire into the government's proposed emissions trading scheme and then asked it to cancel the inquiry because of what he called "unfortunate politicisation".

The turnaround created the impression that the government might delay or water down its scheme and disrupted Australian trading on the international carbon market.

Mr Swan said Sunday the government strongly supported the scheme and would proceed with it "enthusiastically," releasing an exposure draft of legislation within weeks.

Challenged about the Coalition's position Mr Hockey said "we don't know what we're voting for at the moment because there's no legislation."

The on-again off-again inquiry had been a "clown show''.

Mr Hockey also attacked Mr Swan for talking up inflation shortly after taking office inadvertently pushing borrowers into fixed rate mortgages.

The Treasurer said the world had changed since then and some people "unfortunately, been left with fixed rates".


Here's what
Hockey said:

"We found out from the governor of the Reserve Bank on Friday in Friday's committee hearings that there was a 20 per cent surge in the first half of last year in the number of Australians who fixed their home loan rates."

Here's what the Governor
actually said:

Mr ANTHONY SMITH — Governor, I have got a series of questions. If I could go back to the issue of fixed mortgages, what proportion of mortgages are fixed in Australia?

Mr Stevens — About one-fifth.

Mr ANTHONY SMITH — And the US is much higher, isn’t it?

Mr Stevens — Most of them.

Mr ANTHONY SMITH — And what was the magnitude of the increase last year in that context?

Mr Stevens—The increase of what?

Mr ANTHONY SMITH — Fixed mortgages. I think you said —

Mr Stevens — For the flow of new mortgages the share rose by how much, Malcolm?

Dr Edey — It is normally about 10 per cent or a bit higher. It went up to over 20 per cent for a while early last year.

Mr ANTHONY SMITH — And what was the level before then?

Mr Stevens — Of the total stock outstanding—I cannot quote the figures as I do not have them in my head—it would have raised it a bit, though, the monthly flow is of course not that big compared to the total stock that is out there so —

Mr ANTHONY SMITH — How would that compare with previous cycles?

Mr Stevens — I am not really sure; I have not done the sums. It usually happens that when interest rates rise, and some people expect they may rise further, the share of fixed rate loans goes up, though that hinges of course on the pricing because the pricing has got embodied in it a set of expectations about the future path of interest rates.

I read the Governor as saying that there was a doubling in the share of new mortgages that were fixed. That's rather more than a 20 per cent surge.


Anonymous said...

Blah blah blah. Again with the bias. What about Swan on Friday night, who could not say how many pink batts were manufactured in Australia and thus could not answer the question of how the stimulus would actually "support" Australian jobs in this industry?

No, not worthy of comment, nothing to see here, move on. Let's not worry about the billions of dollars that the government is wasting. Instead, let's trawl through the transcripts of the Opposition treasury spokesman.

That's how Martin spells economics: L-E-F-T-W-I-N-G-B-I-A-S.

Peter Martin said...

Dear A,

Not knowing something - the number of pink batts (Swan), the cash rate (Bishop), whether the latest stimulus package is 42 million or billion (Hockey) is no big deal.

Misunderstanding something about which you do know is much worse, in my view.

Hockey was actually in the room watching the Reserve Bank Governor as the Reserve Bank Governor explained it to him. I was there too.

And what is it with this L-E-F-T-W-I-N-G-B-I-A-S.

Let's grow up. We all believe in the mixed economy now. Don't we?

Don't we?

Anonymous said...

Anonymous Liberal Spruiker,

Why don't you stop with all this foolishness? You making judgements about bias? Oh Please! You are one of the most biased commenters around!

Your version of balanced commentary would be to give unconditional praise to the Liberal Party and unrelenting criticism to the Labor Party.

You can keep making a fool of yourself if you wish, but understand that most reasonable people are laughing at your absurd allegations of bias and see them for what they are - blatant Liberal Bias.


Anonymous said...


This is a very interesting topic. Both Labor and Liberal seem to have differing views within their ranks. It'll be interesting to see how the policies for the major parties evolve.


Anonymous said...

Al: I never said I wasn't biased. I am. Martin pretends that he isn't biased. But he is. I know who's more honest.

Peter: Presumably Swan was in the room when the Treasury officials explained to him the effects of his stimulus package. And yet he doesn't have a clue about it.

So, over the course of the last week it has been established on this blog that we have a Treasurer who (a) doesn't have a clue about the costs of his own tax policy and (b) doesn't have a clue about the effects of his own spending policies.

I'd would have thought that after three years of Swan being Shadow Treasurer and after 15 months being Treasurer, that would be worth a column or three. Wouldn't you?

But no, I'll guarantee you the next column will be 800 words on how after less than a week in the job, Joe Hockey has underestimated the extent to which fixed rate mortgages have been taken up - a mistake which only reinforces his point, by the way.

Anonymous said...

Anonymous Liberal Spruiker,

Speaking of more recent blog posts, did you see Peter's post with a letter from Wayne Swan asking the government-initiated House of Reps enquiry into the ETS to be shutdown? I know it doesn't suit your argument of bias but that's hardly a positive post about the Government, is it?


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