Monday, July 26, 2010

Gillard offering green bribes

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Who could argue with green tax credits for business? Certainly business in general will love it. The mining industry will hate it because they don't get subsidies, they get taxes instead. The people will love it because they get to feel warm knowing there is a global warming crisis unfolding. Even if there is no global warming - its better to be safe than vulnerable. Right?
Actually wrong. The problem with politicians is that they appeal to the lowest, most vile qualities in man. Your lack of intellect. I can't blame fear because it is human nature to respond to fear. But it is how people deal with fear that concerns me, and it ought to concern you. There are several ways people deal with fear:
1. Evade responsibility - like shifting costs (taxes on miners) to others (subsidies on energy users). Complicated government only makes it easier for people to evade responsibility, because they argue 'Oh but I paid my taxes'...'sure but there is a net deficit between your payments and your benefits'. This is why big governments are a curse, and a lack of principle will ultimately lead small governments back to big. So we need a 'principled solution'.
2. Evade facts of reality - like business saying there is no real problem with no counter-argument, and then just thinking that they can use their political power to disarm government. It does not work. Higher taxes on miners is the consequence. Educate the unthinking or perish, and the issue is not solely taxes, global warming, goes even deeper.

Let us consider the latest policy initiative by the Australian Labor Party. They are offering $1 billion in subsidies for energy saving initiatives for certain industries like hotels and commercial buildings. The problem with this is that business is already in the 'business of saving money', so if it was already justified, then it ought to have been spent. If it wasn't justified, or even compelling, then the expense ought to be deferred until better technology or process systems justify it.

Another problem is the tendency for government to shift the country away from broad market principles. It does this by enacting specific or 'targeted' industry policy which benefits some at the expense of others. This in itself causes a mis-allocation of resources. We also see the a plethora of funds going into a certain industry just drives money offshore, as local service providers don't have the immediate capacity to service these industries, and prices go up because demand artificially exceeds supply. The implication is that you get shoddy installations (as with the Home Insulation Scheme by Peter Garrett). Labor does not learn, and it doesn't because voters are indifferent to where their money goes....just as you would expect of any common slave with no control over their lives. P.S. Labor represents more slavery. Liberals represent 'steady-as-you-go' slavery.
So the next effect of this policy will be premature expense on energy-savings, a rush of money overseas (i.e. a higher deficit than there otherwise would be), but it will help convince a lot of liberals who don't think that they have a responsive party who cares. Oh, it will also result in thousands of more rules, another hundred specific exemptions, more legislation, more complexity. Because they are arbitrary policies no one will understand the implications, so there will need to be adjustments, more exemptions.
Gillard will however be able to lower population growth because there will be a brain drain of smart Australians overseas. She will offset this will higher immigration numbers. The paradox being that Asians escaping collectivism in their own country will find that they face more punitive laws here. They will however appreciate the nice beaches, cuddly kangaroos. Their kids in a generation however might wonder why they ever left. There are already a great many Australians living in 'undeveloped' Asia, and you might think its the pretty girls, but its really something more....its the relatively freedom from intrusive and arbitrary government. You no longer know where you stand when government arbitrarily imposes taxes and subsidies. Ask shareholders in miners whether they were warned about a tax on their investments. How does one plan for that? If you think this is good for your don't read enough.

The positive aspect is that Gillard is not bringing forward the Emissions Trading Scheme. The whole concept will be dropped in 2013, when it is realised that it was never humanity, it was always solar flares driving the variation in the globe's climate.
Andrew Sheldon

ConvinceMe.Net - Anyone up for a debate?