Growing Debt and Energy Vandalism

It’s a truth which should be universally acknowledged. Governments build up public debt in recessionary times when interest rates are low. As times improve, interest rates rise and the overhang of public debt becomes more and more burdensome. In turn, this makes it harder for governments to balance budgets and set about reducing debt. But it has to be done or the next economic downturn builds debts upon debts and failed statehood awaits.

This universal truth is why it’s far better for governments to change from Labor to Liberal during the onset of better times rather than the other way around. For example, Howard after Keating. Abbott, Turnbull and Morrison after Rudd and Gillard. Labour governments find it extremely difficult to cut spending. Their whole strategy is built around buying votes by spending taxpayers’ money they don’t have. It’s in their DNA. Thatcher nailed it. Of course, they’re good at taxing. But then that dampens development and growth which, in their Keynesian-soaked brains, means they simply have to spend even more. Do you see the problem?

Luckily, the pattern of right-of-centre governments replacing left-of-centre governments usually works out rather well. Usually, leftists mess things up, leaving rightists to clean things up. This way, democracy and prosperity survive flirtations with getting free stuff. I lived in Victoria when Jeff Kennett began repairing the mess left by John Cain and Joan Kirner. A perfect example.

The COVID virus changed all that in Australia. Morrison built up massive public debt to fund lockdowns. Leave aside the idiocy of government responses to a virus which threatened only the old and sick. The fact is, it has disrupted the natural pattern of fiscal things. We now have a Labor government with the task of cleaning things up. Save for enormous luck, it’s simply the wrong party for the times. It’s a mismatch; and yet another bilious aftermath of the putative plague.

According to the budget papers, the deficit came in at $32 billion in 2021-22. Gross debt was $895 billion at end-June 2022. Jump forward four years to 2025-26. What do we find? The projected deficit is just a little shy of $50 billion and gross debt $1.16 trillion. To me, this does not smack of budget repair. True, resource prices might still save the day, as they’ve done before. But, salutary reminder, not only can we rely upon a Labor government finding more things to spend money on, particularly if unemployment rises as projected, there’s the debilitating two-edged pall of green-energy spending. First, the sheer waste; second, the crippling effect on industry of replacing affordable and reliable power with unaffordable and unreliable power.

Take Rewiring the Nation, so-called. An amount of $20 billion is allocated in (tricky) off-budget financing. Ten thousand criss-crossing kilometres of ugly pylons and wires to upgrade interstate connections and carry power from far-flung wind and solar farms. That it won’t happen is scant consolation. It won’t happen because there is insufficient spare skilled manpower; because people won’t accept the ugly despoilation of their landscapes; and because relatively few of those far-flung wind and solar farms (to connect to) will ever be built. It is assumed that power from utility-scale wind and solar will increase ninefold by 2035; in less time than it took to get to where we are now. It’s pie-in-the-sky.

Even Bob Brown doesn’t like wind turbines. Well, in his backyard anyway. Ditto for everyone else and their backyards, unless they’re paid off handsomely. The tourist town of Mudgee in NSW isn’t keen on a solar farm being built nearby. “Nobody is against solar, it’s just about the location,” Business Mudgee President Ali Broinowski, reportedly said. Precisely, NIMBY.

Let me introduce a new law. Machines which despoil the environment, which require ongoing subsidisation, and which regularly fail to perform will eventually be discarded. Unfortunately, while the racket is going on — supported by activists, carpetbaggers and useful idiots – coal, oil and gas will be undermined. Coal-fired power stations will be decommissioned and demolished. Enormous regulatory obstacles and green lawfare will be applied to stymie the development of new sources of oil and gas.

The worst of all worlds awaits. While green-dream projects, just like Snowy 2.0, will incur massive scheduling and cost blowouts, and at best produce halting, intermittent and expensive electricity. Readily flowing, 24×7, cheap electricity will be lost from the system. Vandalised. You couldn’t make it up. But that’s where the madness of crowds led by agitators and rabble-rousers can take you.

19 thoughts on “Growing Debt and Energy Vandalism

  • March says:

    Changes to our energy mix resulting from falsehoods of a so-called climate change emergency surely the greatest con of all time. Covid management a close second.

  • Tony Tea says:

    I read the other day that despite all the money spent on renewable energy to date that the percentage of fossil fuelled power world wide has only gone from 82% to 81%, which in real terms is probably still 82%. The Saudis are even reported to be making quips about the world “transitioning to fossil fuels.”
    Has the world ever seen a more flagrant and egregious waste of money?

  • Botswana O'Hooligan says:

    Might it be best to illuminate the enormous amounts of money made by these con men and the politicians who promote the schemes for usually the mention of lots of money is an attention getter whereas the people on the street won’t take any notice until they are sitting in the dark trying to figure out what article of furniture to burn for light, heat, and cooking purposes. How much money went into someone’s pocket for the desalination plants that lie idle, the thermal holes project, wind turbines, solar panels etc. maybe there have been some but I have never ever heard of a politician leaving office poorer than when he/she entered political office. Name and shame them..

  • Edwina says:

    How hideous does that moonscape look atop this article?
    In what world is that monstrous sight acceptable? The people responsible for this are truly evil.
    The hottest place in Hell should be reserved for these people. For Eternity! It will be a tight squeeze!
    How can they live with themselves and sleep at night with the knowledge of what they are doing? They surely know they are lying their ugly faces off.
    March, Tony Tea and Botswana I loved your replies.
    I am so heartened that we are all starting to speak out.

    • john mac says:

      Edwina ; exactly what i”ve been saying for years ! How can they profess to love the environment , yet wish to build wind farms and solar farms from “sea to shining sea”. To drive into the outback and see nothing but these hideous indulgences is beyond comprehension , but illuminates the great lie behind it all . They hate humanity and all it has achieved and care not a whit about the environment . Barbarians and philistines packaged as eco-warriors , happy to destroy priceless works of art , interrupt and hinder strangers going about their daily lives for what !? This the coldest , wettest year i can remember , two consecutive mild summers , yet still they persist , despite hard evidence , so wedded to ideology are they . And they will always be with us !

  • IainC says:

    Coal and gas are far more cost-effective than RE.
    Coal or gas fired power stations can be built for 2-3bn per GW, with an expected life of at least 50y. Billionaire Mike Cannon-Brookes* of AGL fame has costed a 3GW solar+battery continuous supply project (“Sun Cable”) at 30bn, so 10bn per GW. Worse, the solar panels need to be replaced after 25y, so that’s and extra 5-10bn, or 3bn per GW over 50y. Double worse, the batteries (which comprise around 15bn of the cost) have to be replaced every 10-15y, so that’s 50-80bn over 50y, or an extra 16-20bn per GW. So overall lifetime costs: coal 2-3bn per GW, solar+batteries 30-35bn per GW.
    Hashtag RESoCheap.
    *As I understand MCB’s project (now morphed into the WA Renewables Hub conglomerate), he needed around 45GWh of batteries, charged during each day, to then deliver 3GW overnight (Pilbara gets 10-14h sunlight, or 14-10h darkness, so 14×3 = 42GWh needed in winter for nighttime transmission). To do that, he needed an extra 3-6GW of solar just for battery charging, over and above the 3GW array for daylight transmission. Add in transmission lines, and there’s your 30bn. Batteries are the expensive bit, at $300-400 per kWh industrial size, so 12-16bn in batteries. This is around the Yallorn and Loy Yang scale. And in the desert, who could guarantee even 10y life?

  • vicjurskis says:

    Peter, you must understand that Snowy 2.0 cannot produce electricity. It consumes electricity. The massive costs reflect the massive energy inputs into building the infrastructure. They cannot be repaid. When the scheme commences operation, it will use ‘surplus’ energy from fake renewables to pump water uphill. When it runs back down it doesn’t produce as much energy as it consumed to pump it up. A fundamental law of thermoynamics. Net Zero = Stone Age.

    • john mac says:

      “Net Zero = Stone Age ” Might be the perfect bumper sticker , vicj .!

    • Peter Smith says:

      Realise that vicjurskis, I was simply accepting the fact that once the upper reservoir is full, and providing the lower one isn’t, then hydro power can be produced. But I agree with you. And I am not at all sure in looking at the cost blowout – I’ve seen an estimate of $15 billion (a bit different than Turnbull’s $2 billion) – that account has been taken of the wind and/or solar farms needed to power water up hill. It will not only be the case of needing power to get much lesser power but of spending, say, $10 to get $1’s worth of power back. It’s a dodgy deal all round.

      • Biggles says:

        The speech in the Senate by senator Malcolm Roberts on Snowy 2 is worth looking up.

      • rod.stuart says:

        And the tragedy is that the objective of all this mayhem is to reduce CO2 “emissions” from fossil fuels to prevent an imaginary ‘global warming’, and all the while CO2 is no more related to the weather than it is to the cost of candy. It is the foundation for all of the other blatant lies that surround this topic. .

      • Stephen Ireland says:

        It may be face-savingly fortunate that Snowy 2.0 is going to be so far behind schedule as it looks like the chances of any ‘surplus renewable’ energy are a long way down the track. Solar & wind have struggled to reach thirty percent of nameplate capacity any time one looks in recent months.

  • Edwina says:

    As Botswana said it is well past time that we started naming names and shaming those involved in the fraud, utter lying and outright corruption.
    They can’t exactly deny it. That is with a straight face.
    Make them squirm!
    At least let them know that we know.
    Expose exactly who pocketed what with the scandalous desalination plants, the appalling Great Barrier Reef grant per kind favour Turdbull and the Snowy 2.0, pumping water uphill scandal for a start.
    And check out Photeos and his sidekick Matt Green! Can I get into trouble for saying this??

  • BalancedObservation says:

    It’s true that the LNP were once regarded as the fiscal fixers. I’d also add that while they were perhaps not regarded as the most impressive policy innovators by the media – they were generally regarded as superior administrators by objective media commentators (Remember when we had them?).
    And I agree with the remarks here on Liberal Premier Jeff Kennett. He put Victoria’s state finances back on track. I can also recall for example that my council rates actually fell during his years in office, when he exerted effective pressure on the operations of municipal councils. I’m not dreaming. It’s true. But certainly hard to believe these days.
    But … and it’s an absolutely a gigantic but : this can no longer be said about the LNP. The LNP doubled our national debt in the time they were in office BEFORE Covid. Yes before Covid. This article is wrong to imply that it was Covid which caused the change. The Coalition were in office from 2013 and Covid was only declared a pandemic in 2020. But the Coalition had already doubled the debt they inherited from Labor.
    And this doubling of debt occurred in the period before Covid when the Coalition did not have a crisis as severe as the Global Financial Crisis to contend with like Labor had. Of course since Covid it’s another story. But the fact remains they’d already lost the mantle of fiscal fixers or superior administrators before Covid.
    It’s also illustrative to see how well the Coalition administered education policy. The Turnbull government, for example, was responsible for Gonski 2 which continued the huge increases in education spending. Despite these Labor and Coalition increases standards have not improved. They appear to actually have fallen.
    Understandably with the huge debt hanging over us interest payments are now the biggest threat to the federal budget. Second is the growing NDIS expenditure – growing at an alarming rate. The Coalition have been by far the longest administrators of the NDIS. They had nine years to improve it or restructure it but it’s finances are now out of control. This had nothing to do with Covid.
    The NDIS – a pre-election policy of Labor in 2013 – had very noble aims but superimposing a new bureaucracy over an already complicated health system was always going to be fraught with inefficiencies, duplication, cost shifting, unnecessary complexity and problematic eligibility definition. After many years it’s continued to fail financially and in meeting the needs of those it’s supposed to serve.
    As well it’s always been a fundamentally inequitable scheme.
    The LNP – admittedly not originally responsible for the NDIS – have been its long term administrators and must take responsibility for the state it is in now. It’s current minister and the scheme’s political architect, Bill Shorten, doesn’t seem to have effective answers despite slamming how bad things are. Oh the irony. His baby, which Anthony Albanese gave him to carry as minister, has probably nobbled him as a competitor for the Labor leadership, forever. And Anthony Albanese is currently getting no opposition from the LNP that I can see.

  • BalancedObservation says:

    You could argue that this conversation is pretty academic, because under the leadership of Peter Dutton we’re hardly likely to see a Coalition government for two or three terms, or longer if Peter Dutton continues as leader for longer than that.
    In the short time he’s been leader the Coalition have already lost the mantle in one prominent poll as the preferred financial managers. I can never remember that happening before. It’s quite an achievement. Particularly when Labor have shown absolute incompetence in responding to the inflation threat.
    But it gets a lot worse. Astoundingly Peter Dutton has also managed to reduce the Coalition vote to below the 70 year low at the last election. At the election the primary vote had fallen by a massive 5.7% to 35.7%. It’s been lower than that at every poll since the election – under Peter Dutton’s leadership of the Coalition. Labor’s vote has increased a massive 5% while Dutton has led the Coalition. That’s the sort of opposition any Labor supporter would love.
    And it’s no wonder. On nearly every policy issue he seems to agree with Labor or sit on the fence. It’s been so obvious the people could not possibly miss it.

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