The Point Live: Coalition net zero saga drags on. As it happened.

Here is the statement from the Teals on why they can not support the government’s environmental law changes:

Reform of the Environmental Protection and Biodiversity Conservation Act is critically important to protecting nature and driving productivity.

But Independent MPs have raised serious concerns about the Albanese government’s proposed amendments.

The MPs have identified a range of deficiencies in the Bill:

• lack of climate safeguards
• too much power in the hands of the environment minister
• ill-defined national interest powers
• a gaping loophole on deforestation
• flawed offset scheme

The Independent MPs are engaging in discussion with the government, opposition and senate colleagues to support a range of amendments that ensure genuine environmental protection – with clear standards, transparency and accountability.

We need to get this law right.

Zali Steggall, Independent MP for Warringah

“If we want credible environment laws, companies should have to disclose climate risks associated with their business activities, just as they do under existing financial regulation.

“The laws must also be strengthened to recognise the cumulative impact of multiple projects, ensuring decisions made under the Act reflect the full, long-term pressure on ecosystems.”

Allegra Spender, Independent MP for Wentworth

“The EPBC reform is essential to protect Australia’s beautiful environment, and critical for future productivity and the climate transition.

“We know the old laws aren’t working for nature or the economy. We need to get this broken system fixed, but significant changes are needed to ensure the protections are robust.”

Nicolette Boele, Independent MP for Bradfield

“Climate change is one of the top three causes of our extinction crisis. And yet, climate is not addressed under the Government’s proposed amendments to our nature protection laws.

“Without adequate measures to shield wildlife, forests and reefs from further and permanent harm, we are letting down more than our koalas – we are failing our children and grandchildren.”

Sophie Scamps Independent MP for Mackellar

“For 25 years our weak environment laws have failed to protect our nature. Due to blanket exemptions for native forest logging and land clearing, Australia now sits alongside Brazil and Bolivia as a global deforestation hotspot – the only developed nation to be on that list.

“Under the Government’s proposed reforms, this devastating habit loss will likely continue apace because the exemptions are retained. Additionally, the reformed bill is so riddled with ministerial discretion that there is no guarantee our nature will be better protected, and in some cases, protections may even be weakened.”

Monique Ryan, Independent MP for Kooyong

“Australia’s nature laws are the most powerful protection we have against environmental destruction and species extinction. They hold unique significance to all Australians; these reforms must be considered extremely carefully. Australia’s nature laws are broken. Unfortunately, so is the Bill designed to fix them.

“The massive loopholes in this Bill render it unacceptable in its current form. Granting the Minister permission to destroy nature for any reason they determine to be in the national interest is giving them too much discretion to expedite fossil fuel projects or mining developments – irrespective of their environmental harm. Nothing is more in Australia’s national interest than preserving our nature. We have to strengthen these laws and close these loopholes.”

Independent Member for Curtin Kate Chaney MP:

“Previous offset funds have allowed projects to ‘pay to destroy’ without delivering any meaningful restoration of the environment.  

“Without limits on when the offsets fund can be used and accurate pricing, developers will take easy option – handing over cash to ditch their responsibility to the environment and future generations.  

“I urge the Government to engage collaboratively and in good faith to fix the loopholes in the offsets scheme to deliver for nature and for business.”

Hal Pawson, a Professor of Housing Research and Policy, and Associate Director of the City Futures Research Centre, UNSW has written for Pearls and Irritations about just how bad Australia’s housing situation has become.

Here is the price to income ratio compared to other countries as featured in his article. We are second worst.

The government has given a concession to independent David Pocock and the Coalition over its failure to release the Briggs review into public service jobs for mates which was handed to the government two years ago, in order to end the senate procedural stand-off that has dominated much of the last sitting days.

In exchange for ending the tit-for-tat senate procedural changes, including the ones that have extended question time, the government has allowed for a private, in-camera briefing of the report to the finance and public affairs committee. Pocock is a member of the committee and so will be able to be part of the briefing.

But if the government doesn’t release the report eventually, or fails to give a proper briefing on the report to the committee, all bets will be off.

There is news today of police raiding illegal tobacco shops in Sydney. This is an interesting story where the issue is not so much about crime as tax.

In the May budget, the government allocated $4.5 million over two years for prosecution activities relating to illicit tobacco compliance and enforcement. This is not something that ever really needed to be done, but it is now because the amount of tax being raised from tobacco excise has dropped dramatically:

This is because the amount that Australians are spending on tobacco has declined at an absolutely astonishing rate:

So does that mean those few Australians still smoking have quit in record numbers? Alas no.

What has happened is that the ABS only counts legal sales of tobacco. So legal sales have fallen off a cliff, but total sales have not.

As the ATO explains:

“The tobacco market includes both legal and illicit tobacco for sale. We estimate that 1,741 tonnes of illicit tobacco was consumed in the 2023-24 year. This represents $3.2 billion of combined customs and excise duty theoretically payable that has been evaded.”

If you add that $3.2bn to the total tobacco excise you get back to a level similar to what was raised in 2022-23.

The problem is not that there has been a drop in excise leading to less tax, but that it has kept going up at a rate that is now getting rather absurd and deterring people from buying legal tobacco.

In 2000, the excise on tobacco was $0.19 a cigarette stick. In today’s dollars that is around $0.40. Now smokes are taxed at $1.40 a stick – a 250% increase in real terms:

That is due to firstly the Rudd government increasing tobacco excise by 25% in 2010 and then instituting a series of 12.5% increases from 2013 onwards. This has sent the price of tobacco soaring above inflation:

Back in the early 1980s on the TV show Yes Prime Minister the Minister for Health in the program suggested raising the excise on tobacco “until a packet of twenty costs about the same as a bottle of whisky.” In Australia we have reached that point. A pack of what used to be Winfield Reds costs about the same as a 700ml bottle of Johnnie Walker Red Label.

So has this worked?

Yes – clearly excise increases have reduced smoking.

Is it still working?

That is a trickier question.

Smoking is a habit that society would be better if it was totally killed off (I say as an addict now 20 years quit), but the purpose of taxation of tobacco and other activities you wish to deter is to tax to the point that the cost is not so great that avoiding the tax becomes a more attractive activity.

Clearly, we have gone past that point. Yes, there are people who have quit due to the continual increase in excise over the past 4 years, but the marginal impact of tax increases reduces the higher it goes. Essentially, the number of people who will quit due to the price of cigarettes going from $20 a pack to $25 is much more than the number who will quit from it going from $45 to $50.

But also, the price has risen so high that those who continue to be addicted are now seeking other sources. This is not new, but the numbers doing it are.

Back when I smoked, I always knew someone who has able to get “chop-chop” or who got Indonesian cigarettes on the cheap, or who had a mate who was a pilot who was always ready to buy them duty free for you. But most people, like me, just got them legally from a shop. Now you have retires thinking of nothing about getting them from under the counter, as it were.

Tobacco excise clearly has an impact on tobacco use, but if it is driving people to buy illegal smokes, then taxation policy is not doing what it should.

The problem is so great that the ABS is now explaining that it is probably best to use household spending figures that exclude tobacco because of “the rise of illicit tobacco sales over the past few years”

The problem is tobacco companies are using this to campaign for a decline in excise, and let’s be honest tobacco companies are not anyone you should listen to. The data would suggest that reducing the excise back to 2020 levels might undo the loss of revenue and in effect undercut the illegal tobacco sales – but the problem is will it just introduce a price war between legal and illegal smokes? And that brings us back to whatever happens, now that the illegal cigarette genie is fully out of the bottle we need police to launch raids in ways they never had to before. .

That does not mean giving up on reducing smoking.

The UK for example last year followed a policy of New Zealand of banning smoking for anyone born after 2009. This in essence bans anyone under 16 from ever being able to legally take up the habit. Combined with the high cost, that would seem to be an effective way to go about it – but here it requires the states doing the banning.

But the use of ever increasing excises to cut smoking appears to have reached its limit. And it is also worth noting that those who smokes are much more likely to be on low incomes – thus the tax hurts the poorest the most.

Anika Wells was given the Blue Room (the second most fancy press conference location) to announce Reddit and Kick had met the criteria to be included in the social media ban.

Here is how Mike Bowers saw it:

Solar power is producing more electricity than needed in the middle of the day when the sun is strongest. In turn that has reduced prices to zero in the middle of the day.

Consumers cannot take advantage of that at the moment so Chris Bowen, the Climate Change and Energy Minister, has announced “a new retail energy offer that unlocks free solar for homes during the day”. This will take the form of “a new regulated electricity offer, Solar Sharer, will be introduced next year through the Default Market Offer, requiring retailers to offer free electricity to households for at least three hours in the middle of the day when solar generation is at its peak.”

The retailers do not like this according to the Financial Review and they threaten to pass on “higher prices for electricity for those customers at other times of the day, limiting the benefit.” This means a big fight with the government is coming up because the government expects big savings to consumers from this initiative whereas the industry has made it clear it will recover its losses from those consumers.

The retailers are effectively admitting that the retail prices bear almost no relation to wholesale prices.

From AGL’s annual report we know it is

• getting 35.91₵ a unit, plus GST, from consumer customers and
• charging its wholesale customers 9.43₵ a unit and
• spending just 4.19₵ a unit on fuel costs and generation running costs to make electricity.

(The unit here is a kilowatt hour, KWh, which is the unit used by retailers when they bill you.)

That is why they do not want to see their customers getting free electricity when wholesale prices drop to zero. AGL and the other retailers may get their wholesale electricity for free but the wholesale cost is just a fraction of what they charge consumers and we can bet AGL and the others will be keen to keep their outrageous markups. 

The parliament sitting is underway and the house is about to pass the environment legislation.

It will head off to the senate where the Greens and the Coalition have already voted to send it to committee for review, which will not come back until March.

If you weren’t yet convinced that cost is the new battleground in the push to extend the life of fossil fuel use in developed nations, Australia included, here is the latest line of attack from Nationals leader David Littleproud – he doesn’t want the UN climate conference being hosted in Australia because of the ‘cost’

This is pure insanity and nothing more than a vanity project for Prime Minister Anthony Albanese and Climate Change and Energy Minister Chris Bowen,” Mr Littleproud said.
Right now there are Australians struggling to put dinner on the table but Labor would prefer to flit away more than $1 billion on a Conference of the Parties (COP) Summit, just so Labor can grandstand and the Prime Minister can mix with other world leaders.
This should not be at the taxpayers’ expense and as far as I am concerned, if Turkey still wants to host the Summit, they can have it.”

Summits usually receive sponsorships and costs are offset by the investments and yadda yadda.

But the point is that Littleproud doesn’t care about any of that, or even giving facts – he just cares about throwing as much mud into the water as possible. Just as he is trying to do with pushing the bullshit about the energy transition costing $7-9 trillion a year – that was based on a flawed report looking at INVESTMENT does not take into account the returns on investment, was based on modelling that assumed the same level of fossil fuel reliance and doesn’t mention that the cost of business as usual, or doing nothing, is JUST AS HIGH.

It’s the new battleground in the fight to delay the transition and keep reliance on fossil fuels going for as long as possible.

Correna Haythorpe, the president of the Australian Education Union held a press conference a little earlier calling on governments to listen to teachers and give them a bigger say in how money is spent in the education system:

Australia has an incredibly dedicated teaching profession but they’re absolutely buckling under the strain after a decade of a lack of resources. Our latest State of our Schools survey, which has been taken across 12,000 members, tells a very sorry tale; 95% of principles report that student complexity has increased. We’ve got students with very diverse needs, mental health and wellbeing issues, and that’s having an impact on teaching and learning programs in schools.

Over 55% of teachers report burnout from unsustainable workloads and the complexity that they’re facing every single day. The Albanese government has announced an unprecedented investment not of over $20bn across the next decade and we’re here to say that teachers have to be at the heart of any decisions that governments make about where that money is spent in schools. Our members know what counts on the ground. They are calling for full-service schools with wraparound supports in terms of mental health and occupational health, any medical health that students might need in schools, to help those kids who have more complex needs. They’re calling for more time teaching, more administrative support staff, smaller class sizes and they’re calling for their unsustainable workloads to be addressed.

Trump and Xi may have come to a “deal”, but their meeting was a wasted opportunity. Plus: what do Australians think about our relationship with the US?

On this episode of After America, Dr Emma Shortis joins Angus Blackman to discuss new Australia Institute polling, which shows that Australians are less than convinced that we “share values” with Trump’s America. Emma is then joined by Dr Frank Yuan and Allan Behm to discuss Trump’s meeting with Xi and the chaos whirling around the US president.

Listen now, wherever you get your podcasts.