From Optus to climate change, why won’t they just release the reports? Plus, what happened to our cars, and why Australians aged 65+ are barely employed
Things I've been busy with this month
Hey, thanks for reading.
I am remaining more than true to my promise to never send you more than one of these a week. It’s been six weeks since the last one.
When they won't release findings they promised to, it's a fair bet they're bad
First Optus. A year ago after the personal details of millions of its Australian telecommunications customers ended up in the hands of extortionists, it commissioned Deloitte to conduct a “forensic assessment of the cyberattack and the circumstances surrounding it”.
The review would
help others in the private and public sector where sensitive data is held and risk of cyberattack exists.
It has been completed, but now Optus is fighting in the Federal Court to keep its findings secret saying they are legally professionally privileged.
My guess is it found things at Optus are even worse than we thought.
Hold that thought.
My friend Gregory Andrews has been on a #ClimateHungerStrike in front of my place of work, which is Canberra’s parliament house.
Among his demands is that the government release “the Office of National Intelligence Climate Risk Assessment Report”.
Prime Minister Albanese commissioned the Office of National Intelligence last year to conduct an urgent assessment of the national security threats posed by global warming in line with an election promise and notified the United Nations.
The report has been completed, but not released. I wonder why? Again, my guess is that it found the risks posed by climate change are even worse than we thought.
I’d like to see the reports, and I’d love to be shown my suspicions were groundless.
Australia’s leading economists have suspicions, certainly most of the top 50 chosen by the Economic Society to respond it its latest survey.
The Department of Climate Change told the government last December it was on track to fall short of its 2030 target of a 43% cut on 2005 levels, but that with “additional measures” it could get to 40%.
Here’s the task graphed. No wonder Climate Change and Energy Minister Chris Bowen describes it as “difficult”.
The economists want a carbon price, or a ramping up of our present so-called safeguard mechanism to make it act like one.
And many want a good deal more.
Former OECD official Adrian Blundell-Wignall said Australia’s coal exports create almost two and a half times the emissions Australians produce domestically.
“What is the point of moving to net zero on the latter while we do nothing on coal exports?” he asked.
His proposal, aired in the Australian Financial Review, is for Australia to tax exports of the metallurgical coal used to make steel, forcing up the price and reducing global demand. Australia has 55% of the market.
If higher prices brought in more tax and resulted in less burning of metallurgical coal, it would be a win-win for Australia and the world.
Mark Cully, a former chief economist at the Australian industry department, said Australia should follow the lead of France, Denmark and Sweden and ban new fossil fuel projects.
The supply restriction would push up the relative price of fossil fuels and encourage a faster global take-up of renewable energy.
Australia should also join the European Union in implementing a green tariff, the so-called Carbon Border Adjustment Mechanism that imposed an emissions tax on imported goods whose emissions were not taxed in the country in which they were produced.
My latest column. Reorienting the Stage 3 tax cuts due to start in July so they go to the vast bulk of Australians who are hurting is suddenly important.
Handing $9,000 to a high earner but only $1,000 to an ordinary full-time earner is an indulgence that might have seemed okay when it looked as if ordinary earners were doing alright, or wouldn’t notice.
What if the government kept the tax cuts, but reoriented them to Australians who actually needed them – to the more than 80% of Australians who earn less than $120,000 a year – while still providing generous cuts to those who earned more than $120,000?
That’s a task Matt Grudnoff and Greg Jericho set themselves at the Australia Institute, coming up with four options. Each of those four would cost less than Stage 3 cuts, deliver more to Australians on less than $120,000, and even fund a $250 per fortnight increase in the JobSeeker unemployment benefit.
Jericho’s punchline, delivered to the revenue summit at Parliament House last month: “I actually wish it was harder than it was”.
What if Labor did, and gave double to Australians on the typical full-time wage of $85,000? Would the Opposition really go to war and say “we don’t want that – we want instead to give many times that to Australians on really, really high incomes.
Actually, I think the Opposition would. It would say it would rather give high earners $9,000 than middle earners $2,000. It would be setting itself up for a battle it’d lose, given how much ordinary earners are being squeezed.
For all I know, Chalmers thinks so too. There’s a great profile of Australia’s treasurer in this weekend’s Good Weekend.
Labor has just made permanent its piddling so-called work bonus in order to “incentivise pensioners into the workforce”.
It’s as if Labor recognises there’s a problem, but doesn’t want to actually fix it. This is the problem: these days Australians are required to work until the age of 67 before they get the pension. In New Zealand, it’s still only 65. Nevertheless…
In Australia, 15.1% of the population aged 65 and older are in some kind of paid work. In New Zealand it’s 26%. That’s right: more than one-quarter of New Zealanders aged 65 and older are employed.
What’s different about New Zealand is that New Zealand’s pensioners don’t face a penalty if they work. They simply face income tax.
On Australai’s side of the Tasman…
Pensioners who earn more than $227 per week limit lose half of every extra dollar they earn in a cut to their pension.
Plus tax, this means they lose 69% of what they earn over the limit where their tax rate is 19%, and 82.5% on the portion of earnings taxed at 32.5%.
Since writing, I’ve learnt more about the (many) other traps facing Australians entitled to the age pension bold enough to try their hand at work. The effective marginal tax rate facing many is very high indeed.
More than 50 years ago The Beatles wrote about the Taxman.
"Let me tell you how it will be, there's one for you, nineteen for me," George Harrison sang, in what appeared to be an exaggeration.
But he was describing something real. Under Harold Wilson, Britain's Labour government had imposed a 95% tax on high earners.
Some of our part-pensioners face effective marginal tax rates as high. No wonder they pass up the opportunity to offer themselves up for work.
If we’re upset about the price of petrol, why do we drive the vehicles we do?
SUVs weigh more than standard cars – about 100 kilograms more.
And they emit more carbon than standard cars. In Australia, medium-size SUVs emit 14% more carbon per kilometre travelled than medium-size cars. Large SUVs emit 30% more than large cars.
As recently as 2012, more than half the new vehicles sold in Australia were “passenger cars” – the standard low-slung cars of the type we were used to. About one-quarter were SUVs.
Back further, in the early 1990s, three-quarters of the new vehicles we bought were passenger cars, and only 8% SUVs.
Yet after an explosion in SUV sales, today every second vehicle bought is a SUV. In September, SUVs accounted for 58% of new vehicle sales. Passenger cars accounted for just 17%. This means SUVs outsell passenger cars three to one.
So common have the new larger SUVs become that Standards Australia is considering increasing the length of a standard parking bay by 20cm.
Why’s it happening? Some say it’s tax. Cars get special treatment. If an employer provides them and their private use is “minor, infrequent and irregular” they can escape the fringe benefits tax. And from time to time small businesses get offered instant asset writeoffs.
But I reckon there’s more to it. Even with tax concessions, SUVs are expensive.
I reckon danger (to other road users) might be a perverse selling point.
Australia’s Bureau of Infrastructure and Transport Research Economics identifies obvious benefits: headroom, legroom and storage space, as well as the ability to drive on bad roads as well as good.
But, in an information paper, the bureau goes on to note that SUVs “appear to be more likely to kill pedestrians than cars”.
They also appear more likely to kill the occupants of standard cars than standard cars when those cars crash, largely because they are higher – a phenomenon the insurance industry refers to as “incompatibility”.
Australia’s Bureau of Infrastructure and Transport Research Economics refers to this as the “other side of the coin”.
But I think that for buyers of SUVs, it might be the same side of the coin. That is, I think it might be becoming a perverse and macabre argument for buying SUVs.
If SUVs are becoming dominant and they put other road users at risk, it makes sense not to be one of those other road users.
That’s it for now. Keep reading The Conversation (I edit the pieces on economics) and for that matter keep reading Inside Story, John Menadue’s Blog, and Post, a free 7am weekday email from The Saturday Paper.
My column is in The Conversation (almost) every Wednesday.
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I’ve got three more columns this year. The next, on Wednesday, will be about how the Reserve Bank of Australia is all of a sudden under a lot less pressure to push up rates.
See you soon. And feel free to write.
Best wishes,
Peter