Basic economics says the treasurer’s plan will fail

Illustration: Jim PavlidisCredit:

To submit a letter to The Age, email [email protected] Please include your home address and telephone number.


Basic economics says the treasurer’s plan will fail
The treasurer’s plans to resolve the gas price increase fails economics 101 (“Treasurer sets sights on oil and gas taxes”, The Age, 3/11).

Simply put, price increases inevitably stabilise when supply increases. The treasurer needs to recognise that price increases are not a short-term problem but long-term as the world demand for energy is growing exponentially. Trying to resolve long-term problems of supply by governmental intervention in the market just won’t work. It generally encourages evasion and avoidance, and producers are inevitable two steps ahead of government.

Jim Chalmers would be far better to encourage his colleagues in the states and territories to lift bans and green obstruction to exploration of new gas fields and development. Benefits are jobs and tax royalties for government. These will endure because demand for energy will continue.

Despite the transition to renewables, gas will remain part of our energy mix. Gas exports are also essential to fund federal government revenues. Policies towards gas supply need to reflect these realities. Removal of the blinkers on fossil fuels will enable governments to recognise this.
Martin Newington, Aspendale

Chalmers is spoilt for choice
The multinational gas corporations have been able to dodge taxes in Australia for far too long. By contrast, Norway will reportedly reap $135 billion in fossil fuel taxes this year, while the oil and gas corporations only paid $926 million to Australia’s Petroleum Resource Rent Tax (PRRT) in the 2020-21 year. So essentially, we give away our offshore gas to them for free.

Treasurer Jim Chalmers is spoilt for choice regarding getting gas corporations to pay a fair share (“Treasurer sets his sights on oil and gas taxes”, The Age, 3/11). He could introduce a super profits tax on fossil fuel corporations. Or, he could introduce a 10 per cent royalty payment on offshore gas.

Our favourite would be to start with a small and reasonable regulatory change to raise $90 billion in additional PRRT revenues, according to an estimate in the Treasury’s Callaghan PRRT review. The outcome can be achieved by ensuring gas companies cannot continue to manipulate an artificially low price for the raw gas extracted in Australian waters. This approach is global best practice and would simplify regulations and transparency.
Mark Zirnsak, Tax Justice Network Australia, and Jason Ward, Centre for International Corporate Tax Accountability and Research

Victoria’s energy minister should look in the mirror
As someone with an economics degree it troubles me to read Victorian Minister for Energy Lily D’Ambrosio say Victoria’s high gas prices are not a caused by supply issues. Literally in the first week of economics 101 we learnt that prices are set by where the demand and supply curves intersect. If supply is limited prices will be high.

If D’Ambrosio wants to point the finger for high gas prices she should look in the mirror.

While there may be good environmental reasons to ban onshore gas production, please be honest about the economic consequences.
David Cowie, Middle Park

The government must act firmly, fairly and soon
Big international gas companies will, naturally, fight with every resource they have to prevent their astronomical windfall profits being taxed.

That is their right and duty. However, we have governments to keep the playing field fair on behalf of the citizenry. They have an obligation to ensure that Australians get a just return for our resources. This will require greed to be moderated and that stupid decisions made earlier by naive politicians are reversed.

The people are suffering severely and unnecessarily. We know that our representatives have been manipulated and exploited and the government must act firmly, fairly and soon.
Peter Barry, Marysville


Better late than never
Peter FitzSimons’ piece on new gambling warnings in sport from 2023 (“Will these new sports gambling warnings pay off? You better believe it”, online, Comment, 3/11) reaffirms this positive step being taken by government in the greater interests of the community.

Fortunately, it is a case of better late than never, with too many individuals and families surrounded by a dark gambling cloud.

Replacing “gamble responsibly” with a stronger warning is a good first course of action. Next, we need to consider doing the same for the larrikin approach currently afforded to liquor advertisements.
Stephanie Ashworth, Pascoe Vale South

Follow their lead
Simply changing a tagline to dissuade gambling is tokenism and will not alter societal problems associated with gambling.

It’s to Australia’s shame that we have higher gambling losses per capita than any other country. Many people, young men in particular, now put more emphasis on winning a bet than they do on their team winning a game.

We banned the advertising of cigarettes and we should follow Spain and Italy’s lead by banning sports betting advertising designed to feed gambling addiction.

The introduction of gambling has destroyed the integrity of sport and those who bet have everything to lose and nothing to gain.
Georgina Manger, Hawthorn East

Dropping the ball
Thank you, Dr David Berger (“We’re kidding ourselves on COVID”, Comment, 3/11) for pointing out the folly and moral failure of both state and federal governments for their head-in-the-sand attitude to COVID-19.

The lockdowns and restrictions were clearly necessary in the early stages of the pandemic to protect both people and health systems. But if the attitude we are meant to adopt now is that “COVID-normal” is just like “flu-normal”, where are the appropriate public health measures? Where is the rolling vaccine program with booster shots to cover the latest variants?

Current death and hospitalisation rates should not be acceptable in a rich society with a good public health system. Having sacrificed much for two years, the least we should expect is for governments, state and federal, to continue to take seriously a major public health issue and act accordingly.
Steve Halliwell, Fitzroy North

Required reading
Dr David Berger’s piece should be required reading, especially for politicians. More vaccinations are needed to protect our people, especially the elderly. The present situation is untenable. Unless action is taken now, Australia could be having a very miserable Christmas.
Doris LeRoy, Altona

Disgraceful attack ads
Last night, I watched and was absolutely disgusted by political advertisements from the Labor
and Liberal parties, both seeking to lead Victoria.

I am a lifelong Labor voter but if this is what leadership looks like, give me anarchy.

These disgraceful attack ads provide me with a very good reason to totally ignore both parties and the whole state election, and to actively discourage others from voting for either party.

Why do we have people who think these types of ads are anything but reprehensible and unethical? I am disgusted.
John Keysers, Frankston

Big business nonsense
Big business claiming that the proposed new enterprise bargaining laws will result in an increase in workers going on strike is nonsense.

It has for many decades been the strategy of capitalism to allow and, in fact, encourage very high personal debt. When workers have high debt to service, their capacity to strike is severely curtailed.
Judy Kevill, Ringwood

Settling for less
Ross Gittins’ review of industrial relations was a good explanation of why real wages are not increasing (“Wage progress still out of reach”, Comment, 2/11).

I believe there is another element to this, which is that flat wages seem politically acceptable. And that is because we’re told that GDP is growing, which gives the impression that we are all better off. But it omits the fact that our population grows at about the same rate, leaving GDP per capita constant.
John Groom, Bentleigh

Unfair treatment
Why is Associate Professor Jacqueline Horan’s article (“The problem with sexual assault cases”, 29/10) so relevant today?

More than 25 years ago, as a practising psychologist, I wrote to you regarding my concerns over the justice system’s treatment of sex-crime victims especially under cross-examination: Any reference to alcohol consumption prior to the sexual assault, or the absence of any loud and witnessed declaration of non-consent to sexual participation, gave complainants little chance of being believed.

Also, put an accused in a crisp white shirt, suit and tie, and parade him flanked by zealously protective, cashed-up parents, and the chance of justice was further reduced.

Hopefully, subsequent law reforms will not only be more in tune with the trauma and bravery of victims who do speak up but they will encourage jurors to develop a more comprehensive understanding of the complexities of sex crimes where credibility, although often difficult to verify, is a key factor, and where knowledge of victim trauma obviates the likelihood of dismissing a lack of hard facts as proof “it didn’t happen”.

The quote “absence of evidence is not evidence of absence” is pertinent, especially in sexual assault cases.
Janet Mason, Mount Eliza

A telling photograph
What a telling photograph of a new housing development (“Workers feel the squeeze as mortgage costs rise”, The Age, 3/11) showing homes built fence to fence with tiny backyards – no room for trees to absorb carbon and heat, or for children’s play equipment, and likely turfed with artificial grass.

Bad for the environment and for the health of our increasingly sedentary younger generation. We need to build smarter.
Vikki O’Neill, Ashburton

This ‘tool’ is ineffective
Why is the Reserve Bank allowed to keep raising interest rates when this “tool” is ineffective?

My lifestyle is relatively simple. I outlay for a mortgage, bills, food and clothing only as necessary.
Inflation has not noticeably changed my existence. Only my utility bills were glaringly higher. Rising interest rates do nothing to lower utility costs.

Instead of saving the money for contingencies, I throw away money in the rubbish bin of interest rate hikes. My mortgage ends 2022 $700 higher than it began.

Inflation was not denting my outlays anywhere near that amount.

Raising interest rates has never been an effective tool for inflation, even at the “best” of times. The main causes of this inflationary cycle are not being cured by higher interest rates. Financial armageddon awaits myriad Australians who see their financial ruin quickly approaching. It is irresponsible, increasing suffering for those who can least afford it.

The RBA should not be the arbitrator of fixing inflation. It is proving itself inept. This tool from the RBA’s toolbox is no longer appropriate for the job. Instead of using a spoon to crack open the egg, it uses a chainsaw.
Aaron Lenzing, Carrum Downs

Cause for optimism
What an inspiring article about Brazilian President-elect Lula da Silva, a man who pulled 20 million of his people out of poverty and, unlike so many world leaders, did not try to manipulate the system to extend his presidency (“A gift for the lungs of the world”, Comment, 3/11).

No wonder he was attacked by the rich and powerful who tried to ruin him with false claims of corruption. Now he aims to protect the Amazon and the lungs of the world.

Thank you, Geoffrey Robertson, for presenting to us a truly remarkable man. You have given us cause for optimism in an increasingly bleak world.
Anne Sgro, Coburg North

Not fit for purpose
Retired army officer Mick Ryan says: “There re multiple benefits [for Australia] of this arrangement with B-52s in the Northern Territory.” (“We should welcome America’s B-52s”, Comment, 2/11.)

I cannot understand why. B-52s are designed for high-level, long-range bombing, not defence against an attack. They are old and slow and must be an easy target for surface-to-air or air-to-air missiles. Ironically, locating the B-52s in Australia will not increase the defence of the US, but it will increase the risk to Australia.

So far, there is no country threatening military action against Australia. That should be the foremost interest of Australia: keeping on good terms with neighbouring countries and with the powerful nations in our region, namely China.
Daniel Cole, Essendon

They take it seriously
As someone who proudly served in the Commonwealth public service for more than a decade, under Coalition and Labor governments, I take grave exception to the contempt with which Matthew Guy refers to the Victorian public servants advising Daniel Andrews on the cost of the opposition’s transport policy.

On Radio National (2/11), he implied that “bureaucrats” offered advice that he would not trust to
be impartial.

This is an insult to a cohort of men and women who take seriously the expectation that public servants provide frank and fearless advice.
Juliet Flesch, Kew

It’s all or nothing
I’m sure that your correspondent on the topic of Matthew Guy’s proposed free meals, (“Managing school meals”, Letters, 3/11), means well when he says free meals should be given only to “those experiencing poverty or neglect”, but what better way to stigmatise these children?

And what parent would wish to expose their children to such stigmatisation? If these meals are to be provided, they must be provided to all children to avoid any detrimental impact.
Ro Bailey, Hawthorn


Dodgem driving
The road laws dictate that we drive on the left side of the road. Unfortunately because of numerous pot holes it makes more sense to drive on what’s left of our roads.
Tony O’Brien, South Melbourne


Money and sport
Why should Victorian taxpayers pick up the $15 million tab for what should be an industry sponsorship?
Dan Drummond, Leongatha

The government should simply bite the bullet and ban all gambling advertising – like what happened with another bad product: cigarettes.
Brian Morley, Donvale

Is Matthew Guy offering flybuy points as well as all the freebies to lure our vote?
Joan Segrave, Healesville

Labor’s bus: red on the outside, blue on the inside.
Michelle Goldsmith, Eaglehawk

Like all of Labor’s infrastructure plans for the west, the removal of “one of Melbourne’s most dangerous and congested level crossings” ( at Anderson Street, Yarraville is a long way down the track – 2030 in this case.
Greg Stephens, Footscray

Industry Minister Ed Husic says the gas companies refuse to act, but it is the federal government that is refusing to act.
John Howell, Heathmont

Anthony Albanese, there’s still time to get on a plane to Sharm-El Sheikh for COP27. Global warming emissions are close to tipping point and sending Chris Bowen isn’t enough. We need you there.
Neil Tolliday, Werribee

Getting inflation down is not hard for the Reserve Bank. It is hard for Australians.
Hans Paas, Castlemaine

Thanks for unearthing the latest oxymoron, “fair-minded employer groups” (“An overdue correction”, Letters, 3/11).
Bill Pell, Emerald

Michael Bachelard sends an exclusive newsletter to subscribers each week. Sign up to receive his Note from the Editor.

Most Viewed in National

From our partners

Source: Read Full Article