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Higher petrol and electricity prices, and no nuclear

By Dennis Jensen - posted Friday, 13 June 2008

It is interesting that Labor, during the election campaign, had lots of talk about plans for the future, but the reality, as delivered by the budget, shows a lack of vision and a lack of strategic planning. Before the election, the then Leader of the Opposition kept telling us that he had a plan for this and he had a plan for that. In reality, his only plan was to become Prime Minister.

Let us have a look at some of the issues that have a lot of unintended consequences - for instance, the removal of the condensate exemption, which will result in a net gain of revenue of $2.43 billion but will significantly damage the international competitiveness of the resources industry.

The government have also decided to reintroduce the CPI increase on the diesel excise levy. Obviously, this will result in increased transport costs, which is inflationary. Increased costs to mining also reduce productivity, and hence the tax take. And increased costs to agriculture are inflationary and threaten farmers’ livelihoods.


There is the so-called alcopops tax - theoretically to reduce binge drinking. But binge drinking has actually reduced over the last five or so years among the target audience of young women. Projections by Treasury show a 4 per cent reduction in ready-to-drinks (RTDs) compared with before the increased tax.

HBF’s Western Australian data show that RTDs comprise only 3 per cent of what 18- to 21-year-olds are drinking, compared with 51 per cent for spirits. Those older than 30 consume RTDs at greater percentages than those in the 18 to 21 group. This shows that Labor are completely illiterate regarding statistics - and perhaps that is why they have cut the Australian Bureau of Statistics budget.

Of importance is reducing the overall alcohol consumption in binge drinking situations, not just RTDs, where substitution of other forms of alcohol is already happening. In So, tax increases on RTDs is supposed to decrease use of a product that only 3 per cent of the target group use and that reduction is only by 4 per cent. This is two-thirds of stuff-all, I would suggest.

Then there is the area of science, a discipline critical to Australia’s advancement.

Scientific research is vital in the development of solutions to problems. So the Labor government cut CSIRO’s budget so significantly that CSIRO will shed 100 jobs and four divisions. What a travesty; what hypocrisy! And that is before we even get to cuts to the Australian Nuclear Science and Technology Organisation - probably purely based on political antinuclear ideology.

The government has also slashed the Commercial Ready program, which had funded clinical trials for cancer treatments and the high-risk biotech sector. So much for research and development! On November 1, 2000 and in February 2007, the current Prime Minister extolled the virtue of research and development, especially in universities, and feigned outrage at the policies of the coalition. This man has now slashed this funding. Fine words; black deeds.


Then, worst of all, in the areas of energy and the environment, the government is shown to be clueless hypocrites.

We had Peter Garrett decrying the Coalition government’s environment policy when in opposition. Almost weekly he complained about our policy for solar power generation, stating that we had been world leaders in solar technology but were no longer so. Now Labor is in government, and it is instructive to compare rhetoric with action. Far from delivering a policy to enhance the industry, the Rudd Government has introduced a policy that is likely to kill the industry in Australia.

The Rudd Government has introduced a budget measure that will dissuade the only people who will be able to afford solar panels on the roof - those earning more than $100,000 a year - from doing so by cutting the solar rebate.

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This is an edited version of Dr Jensen's speech in the Australian Federal Parliament on June 3, 2008, on the Appropriation Bill. The full speech was first published on Jennifer Marohasy’s blog on June 4, 2008 and can be found here.

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About the Author

Dr Dennis Jensen is the Liberal federal member for Tangney in Western Australia. A former air traffic controller, CSIRO and later Defence research scientist, and defence analyst, he was widely recognised as one of the rising stars on John Howard’s backbench. He’s played an important part in Australia’s air capability debate.

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