Australia is in political chaos and economic uncertainty right now. All self-inflicted. The seeds of economic deterioration are everywhere, aided and assisted by terrible political policy collapse While the economy could be seen as going well and the country as prosperous – on the surface – the political ruling class have laid the seeds of its future troubles.
A commodities-dependent nation and world price-taker which, with the agreement of the dominant political class, has willingly sabotaged its cheap energy riches, has not only adopted climate alarmism as the State policy by adopting the Paris Agreement but preceded it by taking multiple steps to sabotage all its energy advantages. With virtually limitless supplies of metallurgical and thermal coal (the nation’s biggest export) and with massive gas available plus almost 1/3 of the world reserves of uranium Australia has been let down by its political class in being seduced by climate alarmism. It has gone from one of the cheapest energy suppliers in the world to one of the most expensive.
That result is just one fact coming from years of economic and general policy blunders which had the effect of badly damaging the Australian economy or its budget/national debt. From profligate spending in the good times to huge, late (& extremely wasteful) deficit spending after the global financial crisis, to squandering money on the black hole which was the Clinton Foundation, a debt-free country in December 2007 was, by the change of government in September 2013, 300 $Billion in debt.
Major and Ongoing Political Changes
Politically, Australia is ruled in a rigid two-party system where the historical conservative/centre/left divide governing in turn for over 100 years has taken a sharp turn away from the historical groupings. The main parties are turning noticeably left.
A virtual two-party monopoly for over 80 years with the left Australian Labor Party and once-centrist/conservative Liberal Party formerly sharing over 85% of the(compulsory) vote between them, it now sees them struggling to reach 38% each in some cases. Greens and other minor/micro parties and localised “independent” causes take most of the rest. As said, having a Senate modeled on that of the USA, a proportional representation system has now built-in virtual permanent gridlock, with the small groupings holding the governing parties to ransom over pet (& often rent-seeking) causes. Not assisted by an historic electoral system which sees the weakest state, Tasmania, having the same Senate representation as New South Wales (which has a population 12 times the size). Smaller states always had disproportional leverage due to their different representations but the upper house gridlock has been caused by the public being willing to vote for minor or fringe candidates from outside the main two parties.
It all starts with energy and willful neglect of a built-in advantage
From 2007 when the Australian Labor Party (ALP) took office under leader Kevin Rudd (who claimed that the climate challenge was “the greatest moral challenge of our time”), both parties of that time went out to turn Australia – which never provided more than 1.5% of the worlds carbon emissions – away from its cheap energy life blood and sacrifice it to the then-“global warming” movement.
Australia got a reprieve in 2009 when conservatives in the then-opposition Liberal Party overthrew its leader Malcolm Turnbull and replaced him with a climate skeptic Tony Abbott. But while the planned surrender to the climate alarmists didn’t take place at that time (& Abbott and the party with him opposed any such carbon tax and other commodity-destroying policies) the ALP government of Australia under both Rudd and later Julia Gillard pushed for them as hard as they possibly could. On this, they were aided by their partners in ideology (and in actual coalition agreement) the Australian Greens and brought in a form of carbon tax which did its damage after the 2010 elections.
With a Greens/ALP political partnership giving climate alarmists the ability to govern in their own right, the $Billions of subsidy dollars started to flow to the renewable energy causes, massively subsidising the uneconomic (compared to coal) wind and solar. Bringing in renewable energy certificates to be granted to solar and wind etc and forcing coal-fired power providers to purchase them, policy artificially made efficient coal power to become uneconomic by virtually transferring billions directly from their shareholders to the favoured (comparatively inefficient) green energy/ solar/wind providers. Needless to say, this has made investors loathe to commit to funding them in view of the governmental sabotage. This lack of new investment has naturally been made much use of in the propaganda of the renewable energy sector.
Australia had some respite when Tony Abbott actually took government in September 2013 on policies to repeal carbon taxes and reverse many subsidies. A recalcitrant Senate stopped many moves for reform and only the actual carbon taxes themselves were finally stopped. Internal party opposition to Abbott, however, often based on belief in climate alarmism, never stopped working against him, including the man Abbott had beaten for the leadership in 2009, Malcolm Turnbull. Constant leaking, use of Wick r-type untraceable communication networks, the conspirators worked away for a long time through their creatures in the media (Canberra Press Gallery) and a never-ending stream of leaks, true and false, were constantly in the press.
While some poor political choices were made by the government led by Abbott (eg a foolish antipodean knighthood system, a proposed $20 billion medical research fund at a time when the country needed to save and pay off massive debts inherited from the Rudd/Gillard governments), they never had any clean air with all the undermining and sabotage from within, not to mention an almost unheard-of media mass-attack.
One additional, possibly a major factor in losing support from a section of his own State Liberal party machine, what Abbott did from the very first days in office, banning any lobbyists from access to the government if they held any official position in his own Liberal Party. This had been a key issue for a long time and while some had mentioned it before, particularly Liberal Party leaders, none had done anything about it until Abbott became PM. Perhaps it was coincidental that the major lobbyist player controlling the ruling faction in the NSW party of Abbott (& supporter of Malcolm Turnbull) happened to be a leading organiser for votes against Abbott when a coup ousted him as leader for Turnbull in September 2015.
Turnbull and Co announced for the Paris climate agreement in December 2015 and after retaining government in July 2016 by a single seat, announced for it again. Donald Trump had declared all through his campaign that he was against the Paris agreement and was for steel, for coal, fossil fuels, oil, gas and all forms of US energy production and use, the Australian government under Turnbull ratified the Paris agreement after Donald Trump had gained office as President of the United States!
It took a joint political effort to get the economy to this
It isn’t just the present, nominal centrist, trending leftist government sending the economy into an uncertain future. The opposition ALP party is worse, far worse in energy sabotage. Not content with the present government policy increasingly putting electricity prices out of the reach of the poor whilst enriching their renewable energy favourites, (all this while trying to reduce emissions by less than 30%), the ALP want to sink the energy marker altogether by going to 50 % in a few decades.
The ALP has other flaws, not least being an unhealthy connection by some if its senior officials and ex-political office holders with the government of China and the Chinese subsidiary organisations projecting so-called “soft power” active in Australia. More for another day.
To conclude for the moment, Australia could not be in much worse of a position, what with the world being so volatile at the moment. There is so much happening in the United States, where a massive investigation and assessment of its whole Obama-era use and relationships with once-world famous institutions, CIA, FBI the IRS and others.
That will be dealt with in numerous future posts.