27 December 2016, The Conversation, Universal basic income: the dangerous idea of 2016. The resurrection of universal basic income (UBI) proposals in the developed world this year gained support from some prominent Australians. But while good in theory, it’s no panacea for the challenges of our modern economy. UBI proposals centre on the idea that the government would pay a flat fee to every adult citizen, regardless of his or her engagement in skill-building activities or the paid labour market, as a partial or complete substitute for existing social security and welfare programs. Of the schemes run in developing places like Kenya, Uganda, and India, some have been evaluated statistically, delivering some evidence of positive impacts on educational investments, entrepreneurship, and earnings. In the developed world, Canada is trialling a UBI scheme. Finland also just rolled out a UBI trial, involving about 10,000 recipients for two years and costing about A$40 million. While Switzerland’s voters just rejected a UBI proposal via referendum, a similar proposal is presently looking like a goer for Utrecht in the Netherlands. Here in Australia, it has been suggested the government might hand out somewhere between A$10,000 and A$25,000 a year to every man and woman. Can we afford it? There are two big questions to ask before taking a UBI proposal seriously, and the first is the most obvious one: where would the money come from to pay for it? The present Australian welfare system (excluding the Medicare bill of A$25 billion) costs around A$170 billion per annum. Our GDP is around A$1.7 trillion per year, so this welfare bill is about 10% of annual GDP. Read More here
Tag Archives: Economy
16 December 2016, The Conversation, Full response from Craig Kelly. In relation to this FactCheck on electricity prices, Liberal MP Craig Kelly sent the following comments and sources to support his statement: Firstly, RenewEconomy – a pro renewable energy website. They quote prices (in US cents per kilowatt hour) in the USA at 12 cents per kilowatt hour and Australia at 29 cents – so on their numbers it’s actually closer to 2.4 times higher rather than double. These costs are described as “average national electricity prices” which I’d take as both businesses and households. However, I’d note that these figures can bounce around a bit subject to exchange rate fluctuations. Secondly, a report titled Electricity Prices in Australia: An International Comparison by CME (an energy economics consultancy focused on Australian electricity, gas and renewables markets) concludes: “In 2011/12 average household electricity prices in Australia (just under 25 cents/kWh) were 12% higher than average prices in Japan, 33% higher than the EU, 122% higher than the US.” Read More here
16 December 2016, The Conversation, FactCheck: Are Australians paying twice as much for electricity as Americans? Business here and households here, already we’re paying twice the cost of the US for electricity. – Craig Kelly MP, chair of the backbench environment and energy committee, ABC Radio National Breakfast interview, December 6, 2016. (Listen from 7.38). Environment and energy minister Josh Frydenberg recently left open the possibility of some form of carbon trading in the electricity sector. He later ruled out that option, saying he wanted to keep electricity prices down. Following Frydenberg’s initial comments, Liberal MP Craig Kelly said businesses and households in Australia are already paying twice as much as Americans for their electricity. Is that true? Read More here
15 December 2016, The Conversation, Rising power bills signal the end of an era for Australia’s electricity grid. Electricity bills are set to rise further for households, according to a report from the Australian Energy Markets Commission (AEMC). The report, released this week to coincide with the December meeting of the COAG Energy Council, forecasts that electricity bills will increase by an average of A$78 by 2018 in the five eastern states and the ACT. Together these comprise the National Electricity Market (NEM). The AEMC has prepared these three-year reports each year since 2010. But no report has received as much publicity as this one. This is largely because the latest report comes hard on the heels of the announcement that Victoria’s Hazelwood power station is to close – the largest power station closure ever in Australia. It also follows the release of a specially commissioned report by Chief Scientist Alan Finkel that opens with the words: “The physical electricity system is undergoing its greatest transition since Nikola Tesla and Thomas Edison clashed in the War of the Currents in the early 1890s.” So what does the latest report really say? Read More here