Start a program of high-cost renewable generation and set the target at a fixed percentage (20%) but express that target as an amount of electricity.
Because demand for power is not growing at the rate expected, the current renewables target will become 25% to 30% of our power. So we are going to pay a fortune for electricity but not reduce carbon greatly because of the reliance on brown coal.
Run state government deficits in Queensland and NSW so that it is vital to sell power generators to reduce borrowing. In Queensland, the government slashes power prices but not costs, so hitting generator profits and lowering the value if its generators.
That uncertainty will also lower any NSW generator sale price.
Our richest state, WA, gets into a terrible mess because some years ago it did a “Queensland” and artificially lowered power prices and now must lift electricity pries sharply.
Just as iron ore and coal prices go through the floor we introduce a tax on them to make sure that no new mines are erected.
The assumed large revenue from this tax was always a total fiction.
Now not only will there be no substantial revenue from the mining tax but ordinary taxation revenue from coal and iron ore will be slashed, sending forward budgets deep into the red without spending cuts.
Confidence in our ability to make sensible decisions at budget time is shattered.
Despite step nine, politicians keep making big spending promises and don’t take into account the mess we have got ourselves into.
This article first appeared on Business Spectator.
