Home > The EYE-BALL Snoop Poop > EYE-BALL’s Herman on – Micro Economics – Thoughts and Opinions on the Energy Debate!!!

EYE-BALL’s Herman on – Micro Economics – Thoughts and Opinions on the Energy Debate!!!

July 21, 2012
Links to Previous  ‘Herman’ Posts:

July 18th:

A Chronology of Farce – and of a Government who Wonders Why Their Opinion Polls are so low.

July 4th:

2012 Overture – The Northern Summer Arrives –

June 16th:

2012 Overture – The Greek Elections

June 2nd:

Creative Destruction …

May 26th:

White Collar Crime – Craig Thomson and Peter Slipper … or just Federal Parliament?

May 17th:

The 2012 Overture Act III

Apr 23rd:

An update on the French Presidential elections and other

Apr 21st:

A Philosophical Appraisal of Socio Economic Index… to Capture Wider Social Well Being.

Mar 26th:

The 2012 Overture – A Crappy New Year – Part III.

Feb 14th:

Democrazy Part XV – Clinging to Power.

To see more EYE-BALL ‘Herman’ posts:

click here …

– Micro Economics –
– Thoughts and opinions on the Energy Debate!!!
| Author: EYE-BALL’s Herman | 21st July 2012 |

avid Murray said relatively quietly as he took retirement from the Future Fund that the Carbon Tax was possibly the worst, the most inefficient tax he had ever seen.  See SMH story here …

My thoughts are similar but possibly for different reasons. It is all about micro-economics, and the efficiency of taxes, in terms of the cost of collecting them, and equitable redistribution of wealth or society benefits.

When the Carbon Tax package was announced on July 10th last year I wrote “The Carbon Tax Detail. Why is the Devil always in the Detail?”  [Post Linked here]

Since then I have been rather quiet about the Carbon Tax. On this, I believe there is little we can do about the Carbon Tax, other than be aware of this sheer dishonesty and wait for the next Federal election.

On Tuesday I received a letter from AGL setting out their new Gas and Electricity charges payable from August 2nd. The upshot of the 3 pages is reproduced below.  [1st Column = old price; 2nd column = new price; 3rd column = percentage increase.]

[All of the above does not include GST.]

The Carbon Tax is not the only driver of these price hikes.

First we had the outgoing ALP state government buying back electricity from solar household producers at 60c per kwh. Then we had the incoming Liberal government wanting to renege on that deal buying at 40c then 50c. That policy was woeful because solar electricity does not increase base load. Electricity producers still needed to convert existing turbines to gas/coal or build new dual coal/gas facilities and decommission the older less efficient production.

After that we had a $23 per tonne carbon emission added.

Roughly 6% of the price hike is due to solar rebate, and maybe 12% to Carbon Tax. So the Liberal Premier assured the electorate that this 18% price hike would not happen and asked the Independent Pricing and Regulatory Tribunal (iPart) to see what could be done.

Do not forget politically it is good for the Liberal State Government to allow the Federal ALP government to carry all the blame.

This federal government keeps telling us that any company’s falsely claiming price hikes based on Carbon Tax will be prosecuted by the ACCC. Therefore – this is NSW’s State Liberal government and it’s iPart v ALP Federal government and it’s ACCC.

After considering the actual kwh increase the ACCC might try to make some sense of why gas prices are up on average 14.5%. Then they might consider why late payment fees, daily supply fees and other costs associated with debt collection are up at all. Particularly relating to late payment fee, the current class action test case against the ANZ regarding charging interest and a late payment fee on credit cards should make the likes of AGL just a little bit more circumspect about charging this fee and raising it by roughly CPI.

The micro economic argument is that energy costs have substantial multiplier effect through the costs of production and other household costs. Our manufacturing sector already reeling from high currency pays about 50% more than North American manufacturers for a kwh of electricity. Our government should be trying to keep energy prices down, not bloat them.

Once more our government doesn’t understand. We are told we are being compensated. We think poorly of politicians. They don’t earn our respect. Recently one of them said, ‘politics means being popular’.

I beg your pardon, politics is firstly and foremost public service. It is the highest honour given to lead our nation, to serve the constituency. It requires wisdom, jurisprudence, integrity and equity.

We are sick and tired of the apparent ineptitude and apparent self-serving nature of our politicians. Any tripe by Oakeshott or Windsor dictating support for Gillard and thereby usurping the constituency does not cut. Surely there is some decency within parliament to bring about an election to let the constituency choose.

Believing in sanity is insanity itself.

EYE-BALL’s ‘Herman’ …

  1. July 21, 2012 at 10:24 am

    In sunny QLD there is also a crisis looming over electricity price increases … links to two stories provided below:

    July 2nd – http://www.couriermail.com.au/news/queensland/power-savings-may-cost/story-e6freoof-1226413919827

    July 17th – http://www.brisbanetimes.com.au/queensland/origin-backs-down-on-power-price-hikes-20120717-227mj.html

    A slant on another story on the same matter had Premier Newman ring the Origin boss after he opened his own bill and noticed the price increases. He rang and spoke to Origin Executives about the timing of the increases against his ‘freeze on tarriff increases’ pledge. The story went on to say that Origin backed away from the increases on Newmans involvement as a consumer …

    The upshot – if some other consumer rang and complained – and there were thousands … would Origin have been as willing to scrap proposed price increases?

    Herman – you article is where Journalist’s should venture – again it shows up the mindless dumbass’ employed and working for mainstream media – or is it the Editors who don’t want to spend the research expense tocover stories like this?


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