Who exempts the Poor from the LRET’s $50 Billion Electricity Tax & More Power Price Punishment?

port henry smelter

LRET victims: 980 from Port Henry’s Alcoa smelter got the chop.

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The “debate” about the Large-Scale Renewable Energy Target continues to rage in Canberra, where the rent-seekers’ game of “save the LRET at all costs” has been driven by the increasingly panicked and apoplectic rantings of Miles George and Kane Thornton.

Miles heads up near-bankrupt wind power outfit Infigen (aka Babcock & Brown) and, to cut down on lobbying admin costs, also heads up the wind industry’s top spruiking outfit, the Clean Energy Council. How convenient …

Kane – Mile’s side-kick and head spruiker for the CEC – has been camped out in (carpeting the) Environment (in giant fans) Minister, Greg Hunt’s office in the last week or so; directing traffic, polishing up Greg’s press releases; and otherwise interfering in the workings of ‘open and transparent’ government.

Nothing nefarious mind; just the kind of behaviour you’d expect from people looking to keep the LRET alive and kicking; and lining their pockets thanks to the greatest, single industry subsidy-scam in the history of the Commonwealth.

The panicked efforts to ‘save’ the completely unsustainable LRET, by chopping the current 41,000 GWh target, have taken on the complexion of high farce; with the CEC touting its 33,500 GWh figure as the “Goldilocks” solution; the Coalition’s (killing) Industry Minister, Ian “Macca” Mcfarlane rejecting that, and digging in around a figure of 32,000, and the Labor opposition rejecting the lot.

STT operatives in Canberra captured this video of the LRET negotiations in train.

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For purely mercenary reasons, it was odds-on that the Labor opposition would reject any moves by the Coalition to scale back the LRET – this is a party that has long since rejected any claim to be the “workers’ party”, let alone any claim to be an advocate for the poorest and most disadvantaged:

Coalition LRET Deal Rejected: Labor Determined to Kill Jobs in Australian Mining, Manufacturing & Industry

Labor Determined to Smash the Poor & Put REAL Australian Businesses to the Sword

Bear in mind as to what’s at stake: the Labor party’s financial (and, therefore, political power) is all about backing from Labour Unions, and the Union Super Funds they control, that have poured $billions into wind power outfits, like Pacific Hydro.

Pac Hydro racked up a $700 million loss last year, in circumstances where the LRET target hasn’t changed at all (see our post here). Any actual change to the LRET can only compound Pac Hydro’s financial woes; and thereby threaten Labor’s quest for power.

However, the ALP’s ‘green’ left flank has been turned by the ‘old-guard’, principally Unions representing workers in the critically endangered aluminium sector:

The RET helped to kill Alcoa’s Port Henry Aluminium Smelter & 980 jobs

Mandatory RET the Nail in the Coffin for Aluminium Processors

The aluminium boys have ramped up their pleas for survival in recent weeks, desperate to avoid further punishment under the LRET, as The Australian reports.

Tony Abbott has the right to rule on RET exemptions
The Australian
Sid Maher
2 April 2015

The Abbott government has the power to immediately exempt emissions-intensive trade-exposed industries from the renewable energy target despite the fact that it has yet to strike a deal on the future of the scheme with Labor.

Parliamentary Library research shows it is open to the government to provide a full exemption through a regulation that would be signed off by the Governor-General and could be implemented even though parliament does not sit again until May.

With the negotiations between the government and Labor deadlocked, energy intensive sectors such as the aluminium industry has been warning that it will face an $80 million impost over the next year unless it can be given a full exemption.

But the Parliamentary Library advice says regulations cannot be made retrospectively. The Australian understands energy intensive sector have asked the government and Labor whether they would support regulations to provide the exemptions.

However, the government has ruled out moving the exemption by regulation unless the RET scheme is amended, as it would simply push the costs removed from the energy intensive sectors on to other people who were still in the scheme.

Bill Shorten said Tony Abbott had “almost destroyed the renewable energy industry, with investment plummeting and jobs going”.

“The government has been holding aluminium and other emission-intensive companies to ransom, despite the fact the both the Opposition and the government support an exemption,” the Opposition Leader said. “Either this government doesn’t care about protecting these jobs or it is so incompetent that it’s failed to examine how the exemptions actually operate.”

The government and Labor have faced calls from both the renewable energy industry and the energy intensive sector to end the impasse over the future of the scheme, which has dragged on for more than a year.

The government has offered a large-scale target of 32,000Gwh, but Labor has held out for a target in the mid to high 30,000s.

Both support an exemption for energy intensive industries and have abandoned the original target of 41,000GWh. A compromise by the Clean Energy Council of 33,500GWh was not accepted by either side last week.
The Australian

bill shorten

“Electricity” Bill Shorten: happy to kill real industries and crush the poor.

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The first point to note is that the claim that Tony Abbott has the power to simply pencil in an exemption to protect aluminium smelters is complete bunkum: that little red herring was Scotched by Ian “Macca” Macfarlane on ABC Radio (2 April 2015) in this interview:

JOURNALIST: Minister, both parties appear to believe that aluminium should be fully exempt from the Renewable Energy Target so will the Government make that happen through regulation?

IAN MACFARLANE: Well the advice that the Labor Party’s got from the Parliamentary Library is incorrect. The Labor Party should know that because they administered the Renewable Energy Target for six years in Government. If they really wanted to resolve this issue and get the right information, they know that all they have got to do is ask if they’ve got such a short memory that they can’t remember from less than eighteen months ago.

The reality is that the Act doesn’t provide the ability through regulation to provide a total exemption for energy intensive trade exposed industries. It does allow partial exemption but not total. The only way to resolve this issue properly is to sit down and come to an agreement and we’ve been trying to do that with the Labor Party now for six months and at no stage have they made a meaningful offer on this issue and have simply continued to play politics.

JOURNALIST: So there’s no mechanism the Government can use, other than legislation, to make the aluminium sector fully exempt from the Renewable Energy Target?

IAN MACFARLANE: There is no mechanism to make the aluminium sector fully exempt from the Renewable Energy Target, other than legislation. Regulation simply won’t do it and the Labor Party has to stop playing politics and actually take seriously the need to negotiate a fully legislated outcome in regard to the Renewable Energy Target.

It’s all well and good to talk about piecemeal ‘exemptions’, but as soon as one power-hungry type of business escapes the LRET noose, there will be a queue of others lining up on the government’s doorstep, seeking to protect their long-term survival, too.

It’ll be a case of “what about me” – as every business facing LRET driven, skyrocketing power prices spells out its imminent demise; and howls for ‘sanctuary’ from the LRET debacle.

On that score, think mineral processors (of all descriptions); miners; manufacturers; intensive farmers and irrigators – irrigators in South Australia are already howling about spiralling power costs, and farmers in Victoria have gone on the front foot, calling for the LRET to be scrapped outright:

Farmers Tell Wind Farm Developer to Stick its Turbines Where the Sun Don’t Shine

Senator Matt Canavan: Australia’s RET Policy: “Robin Hood visits Bizarro World”

While industries with the time and money to lobby for LRET mercy will, under the ‘squeaky wheel, gets the oil’ rule, probably obtain clemency, that simply leaves others to carry the can for, what is, pure and simple, a $50 billion electricity tax:

Ian Macfarlane, Greg Hunt & Australia’s Wind Power Debacle: is it Dumb and Dumber 2, or Liar Liar?

One way of looking at the exemption of individuals, businesses or whole industries from any tax, is to see it as a ‘subsidy’, for the lucky few who win it – the cost burden of their ‘exemption’ then simply falls to others who remain liable to pay the tax.

And there is no group who will bear that increased burden harder than the “voiceless”, at the bottom of the socioeconomic heap.

The $50 billion in REC Tax, set up by the LRET, is a subsidy to wind power producers; it’s not a subsidy to power consumers; it’s a whopping regressive tax, that will only escalate in its impact on the poorest and most vulnerable over the next 4 years, as the LRET target rises, year-on-year to 41,000 GWh, and stays there until 2031.

That legislated fact simply begs the question: who exempts the poor?

Tens of thousands of Australian households can no longer afford what was once a basic necessity of a decent, safe and healthy life – and thousands more are heading in the same direction: 34,000 homes were disconnected from the grid in Victoria last year alone (see our post here); more than 50,000 homes suffer along without power in Australia’s wind power capital, South Australia (see our post here); and the same kind of power price penury is seen in NSW (click here) and Queensland (click here).

Australia’s out of control LRET policy is going to see previously unheard rhetoricals like this one (pulled from The Age article below), that shouldn’t leave an Australian’s lips, become part of our new idiom:

“People shouldn’t have to choose between having electricity and feeding their children.”

Indeed.

Hardship complaints to Energy and Water Ombudsman soar
The Age
Chloe Booker
30 March 2015

Complaints to Victoria’s Energy and Water Ombudsman about power disconnection or restriction, debt collection and payment difficulties have tripled in five years.

The Ombudsman’s report into affordability and hardship, released on Monday, reveals 7087 or a quarter of cases were related to these concerns in the second half of 2014, despite the overall number of cases falling.

The report found Victoria’s big power companies were sometimes “failing” customers by not providing the full financial hardship support provisions in the Energy Retail Code.

This included having “unrealistic” and “inflexible” hardship programs and inadequate energy efficiency support.

It said a doubling in energy disconnections in five years was alarming.

The Ombudsman is also concerned with the quadrupling of debt collection use in the same period.

Financial counsellor Anna Dooland, of Geelong community centre Diversitat, said Centrelink recipients, single mothers and the unemployed came to her at an “alarming frequency” after being threatened with disconnection without having their hardship assessed.

One client, who had just fled domestic violence, was told “point blank” she would be disconnected if she did not pay $110 a fortnight to her energy provider.

“This is a lady who is living with no furniture in her house, with her kids, and now she was being told by a debt collector she would lose her electricity after she had lost everything,” Ms Dooland said.

She said most large energy companies had good policies, but these were not communicated down to their workers.

“The debt collectors need to understand that if someone says I can only afford $10 a fortnight while I’m looking for work, or for whatever reason, then that’s all they can afford,” she said.

“People shouldn’t have to choose between having electricity and feeding their children.”

The report found that in 2013-14, more than a third of disconnection payments assessed by the Ombudsman resulted in the energy retailer having to pay back the affected customer.

Some companies are requiring customers to show a “willingness to pay” or put down a “significant” payment before reconnecting supply.

The report concludes that energy providers need to provide better customer support overall and improved payment plans.

Ombudsman Cynthia Gebert said the figures were “concerning” and that early intervention in hardship cases was needed.

“Energy and water businesses have a regulatory responsibility to make sure customers that are experiencing difficulties paying are being provided with support,” she said.

However, Ms Gebert said collaboration between the government, regulators, community groups and energy and water companies was also needed to halt the trend.

The report recommends the government reinstate funding for energy efficiency programs, adequately fund the financial counselling sector and provide easy access to the utility relief grant.

It also recommends regulators and government work “closely and collaboratively” with the energy and water companies to understand their difficulties providing hardship assistance.

The Essential Services Commission has opened an inquiry into the financial arrangements of energy providers, to ensure they reflect best practice.

It will consult energy retailers, customers, consumer groups, financial counsellors and the Ombudsman.

The Energy Retailers Association of Australia was contacted.
The Age

A perfectly avoidable social disaster that can only escalate as the $50 billion electricity tax under the LRET starts to bite; and thousands more end up sitting freezing (or boiling) in the dark.

As Infigen, Pac Hydro & Co, and the Union Super Funds with $billions invested in wind power outfits go all-out to ensure that they’ll all continue to wallow in that massive pile of other peoples’ money; spare a thought for the silent and downtrodden, who will end up suffering the most from the insane costs of the LRET.

Child-poverty-007

No Exemption: the LRET’s $50 billion electricity
tax can only add to their daily struggles.

About stopthesethings

We are a group of citizens concerned about the rapid spread of industrial wind power generation installations across Australia.

Comments

  1. Old Ranga says:

    Point made nicely. Robbing the poor to provide luxury for the wealthy.

  2. Now we expect the likes of Shorten’s Labor, the loopy Greens and a tag team of former ALP politicians and union bosses with snouts buried in the union super trough will support continued compulsory subsidies for the unicorn breeding industry (AKA the wind industry) – but when would be conservatives like Messrs Hunt and Mcfarlane actively support such medieval witchcraft, now that is a disgrace.

    The ruinous electricity tax (RET) is destroying real jobs and undermining the living standards of ordinary Australians. So it’s hard to pass off the actions of Hunt and Mcfarlane as just that of two naughty boys, but as they say, if you didn’t laugh you’d have to cry?

  3. luisadownunder says:

    The “$110.00 per fortnight” cited in The Age article is correct.
    However, what wasn’t stated was that this is the easiest way to pay for power – as opposed to waiting for the quarterly bill, which would be onerous.

    This is how I pay, as I am on a pension. At one stage, I was paying 96.00 per fortnight; this has now been reduced to $65 per fortnight. It depends on your power consumption over the previous quarter, and I still have my two youngest sons living with me.

    $110.00 per fortnight is approximately $660.00 per quarter. If this is her power consumption, then there is nothing the energy provider can do.

    I have made sure that my power consumption is used wisely. This is not living in a dark world, just being prudent with money and how it is spent. I don’t leave lights on unnecessarily (which the modern generation is prone to do) nor use other elements, such as air conditioning (I live in Queensland), unnecessarily. I ensure that my consumption remains within the parameters that allows us to enjoy our home, but not abuse our privileges.

    The “$110 per fortnight” will be adjusted according to her consumption, over time.

    The article implies that abused or battered wives should not be expected to pay their power bills. This is utter nonsense and a ‘straw man’ argument. I was a battered and abused wife and I always paid my bills – you need to contact the providers and they will be more than amenable to work out a payment plan, and will also suggest ways to reduce your power bill, intelligently, without leaving you in the dark or cold.

    This has nothing whatsoever to do with those monstrosities littering the countryside, creating health problems and ensuring that electricity bills continue to rise – for no gain, in any shape, colour or form.

  4. Terry Conn says:

    Unfortunately no-one exempts the poor.

    What happens is that the perpetrators blame everybody except themselves.

    That includes those who set this scam up (ostensibly to save the planet) to those who unashamedly pocket the money.

    The idea is to blame those in the electricity industry who were actually just doing their jobs and supplying electricity on an unimpeded ‘supply and demand’ basis, until along came the RET.

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