Economic Freedom

How to turn cheap power back on

Energy Minister Josh Frydenberg claims that renewable energy is a disruptive force in the energy market in the same way as the iPhone was to landlines and cameras.  There is, however, a major difference: iPhones, like Uber, Kindle and eBay have disrupted previous commercial systems by force of technology.  Renewables everywhere in the world have required government subsidies.   

Electricity prices in Australia, having been perhaps the world’s lowest at the turn of the present century, are now among the highest.   

This is a national catastrophe which has been forged solely by political interference.  Subsidies to intermittent renewables, mainly wind and solar, have been the chief cause.  Those subsidies are currently around $85 per MWh.  And even if they fall to $50 per MWh, as forecast by Minister Frydenberg, this compares with the average total price of electricity, prevailing until 2015, of around $40 per MWh.  That price has now doubled … Read the rest


The cost of living: the evidence is clear

This is the third and last instalment of my short series exposing that the high and rising ‘cost-of-living’ in Australia is due to government control not market freedom – ie the ancient human battle of freedom v control. The first piece was entitled The Rising ‘Cost-of-Living’ is a Government Phenomenon and the second piece was entitled The Rising ‘Cost-of-Living’: Why Is It So?. The first one set out the libertarian hypothesis that the culprit is government control like tax, regulation and money which negatively impacts costs (and services) in energy, housing and banking. The second one walked through the economic logic of why the culprit is certainly not market freedom. This third one will provide the statistical evidence from official sources such as the Australian Bureau of Statistics (ABS), Australian Prudential Regulation Authority (APRA), Reserve Bank of Australia (RBA) and Parliamentary Library (PL). This evidence is best presented … Read the rest


Queensland Greens go full commie and abolish private property!

Ok, not quite, but they have released their new policy to, “fix the rigged system that treats renters as cash cows for real estate agents and property developers.” Not even joking, this is a real policy. According to Brisbane Times, The Queensland Renters’ Rights plan involves renters having access to unlimited leases, which they could cancel with three months notice. Landlords would be required to give 12 months notice and would only be able to terminate a lease on “reasonable grounds”.

The policy would also prevent tenants from being evicted from the home if the property owner wanted live in the home themselves or wanted to sell it. Generously, the Greens policy would allow the property to evict the tenant after three months in the event of non-payment of rent. The landlord would also only be able to increase rents every 24 months.

Greens candidate Kirsten Lovejoy said, Read the rest


Australia’s deindustrialisation

High energy prices are causing Australia to deindustrialise. Last week the Australian reported that mining giant Glencore’s chief Peter Freyberg called for the abolishment of the renewable energy target, stating, “If heavy industry is to continue operating in Australia, it will have to be exempted as it is currently bearing the brunt of the crisis given the high percentage of energy within its overall cost structure,” Over the last Australia’s energy prices have gone from being one the cheapest in world to one the highest. This is unfortunate since many of Australia’s competitive export industries are dependent on cheap energy.

At present Australia has a renewable energy target (RET)  of 24% to be achieved by 2025. The recent Finkel report recommended this be increased to 42% by 2030. Australia generates 14% of its electricity through renewable energy and already consumers have seen energy prices increase dramatically. This has has Read the rest


Inequality, an indicator in search of a problem

Federal Labor leader Bill Shorten made a speech recently in which he claimed to the ALP faithful that inequality was “the biggest threat to our health as an economy and our cohesion as a society”.

In this spirit, the ALP is currently proposing the Productivity Commission Amendment (Addressing Inequality) Bill, which establishes a framework for the Productivity Commission (PC) to regularly report on economic inequality. The stated purpose of this Bill is to improve the quality of information and analysis available about economic inequality in Australia, and to ensure that proper consideration is given to inequality in the public debate about economic policy.

Inequality of wealth is certainly an economic phenomenon worthy of study. However, significant levels of inequality are not an economic problem in itself. One having sufficient and growing wealth ‘pays the bills’, not whether someone else has even more sufficient and growing wealth. This is because … Read the rest


Energy Policy: the meat grinder of the poor

The outstanding success of the South Australian government of giving their people the highest power prices in the world is going to be replicated around the country.

Even as the whole nation is looking on in amazement as Jay Weatherill continues to display his incompetence and make his government a global laughing stock, other state governments are looking at imitating his policies. This is a bit like watching your friend walk down an alley, getting mugged and saying, ‘this looks fine’ and wandering down after them.

In Queensland the Deputy Premier Jackie Trad announced in July that Queensland would follow the lead of South Australia and Victoria thereby guaranteeing that the state would join them in the ranks of the highest power bills in the world. To quote from the Brisbane Times:

“Queensland will have zero net emissions by 2050, under a plan to drive down carbon pollution announced Read the rest


The unforgivable stupidity of the anti-banking “libertarians”

At LibertyWorks we are lucky enough to have two noted economists on our advisory board: Dr John Humphreys President of the Australian Libertarian Society (ALS), Deputy Director of the Australian Taxpayers Alliance (ATA), and a Justice of the Peace in QLD; and Darren Brady Nelson an Austrian school economist, conservative libertarian and currently the economic policy adviser to Australian Senator Malcolm Roberts. We recently published an article by Darren Nelson on fractional reserve banking that he describes as ‘legalised counterfeiting’. Dr Humphreys has a different view.


At the recent Mises Seminar in Sydney there was a speech by Chris Leithner that explicitly called for the banning of fractional reserve (FR) banking. Leithner and other Australian libertarians follow the lead of some American libertarians (Walter Block, HH Hoppe, JG Hulsmann — BHH) and argue that FR-banking is fraud and should be banned, and further that it is economically damaging … Read the rest


Big banks and government need each other

On 16 February 2017 the Senate established the Select Committee on Lending to Primary Production Customers to inquire and report on the regulation and practices of financial institutions in relation to primary production industries. This Rural Banking Inquiry is chaired by Queensland Senator Malcolm Roberts of Pauline Hanson’s One Nation party. The Select Committee is currently scheduled to report by 18 October 2017 and submissions are accepted throughout. The Terms of Reference  specify the scope of the enquiry as follows:

“… to inquire into and report on the regulation and practices of financial institutions in relation to primary production industries, including agriculture, fisheries and forestry, with particular reference to:

  1. the lending, and foreclosure and default practices, including constructive and non-monetary default processes;
  2. the roles of other service providers to, and agents of, financial institutions, including valuers and insolvency practitioners, and the impact of these services;
  3. the appropriateness of loan
Read the rest

The Fakel Report: Finkel’s fake ecomonics 2.0

This is a sequel to my article from last week entitled The Fakel Report: Finkel’s Fake Economics. Since then there have been media reports that the Turnbull ‘flip-flop’ Government is already having second thoughts about the one-and-only solid reform recommendation from the Finkel Review, that is the so called “technology neutral” Clean Energy Target (CET). This is not surprising given that only when ‘hell freezes over’ will a CET result in “lower residential and industrial electricity prices”. It is unclear, however, if they are also backing off a new federal Renewable Energy Target (RET) of 42 per cent in 2030.

There are a plethora of problems with the Finkel Final Report, one of the main ones being the thinly-veiled worldview fuelling this Report, that is the all-too-predictable one of climate change alarmism (including wind and solar fetish) combined with favouring government central control over competitive market freedom. … Read the rest