The Carbon Tax is not a Tax

This blog is about faith in certain religious facts.  But the sacred is of course, not the only area where faith is necessary.  We are required to have faith in our car mechanic, our doctor and of course our governments. 

I have chosen a small issue to illustrate how mistakes and lies run our lives.  For those of us who cannot believe God, I say there are many other areas where faith is not well rewarded.

The toxic tax is not a tax

There is a whopper of a mistake that has bought down two Prime Ministers, changed a government and transfixed Australia for several years now – the alleged Carbon Tax.  The Carbon Tax, however, is not a tax.  On this error, Australian governments have been made or broken.  A former Prime Minister has been inaccurately portrayed as a liar.  And this week this blunder has consumed our political life.

The regulation of carbon emissions depends on two things: the price of emissions (P) and the quantity (Q) of emissions.  Since the dawn of human history, carbon could be emitted for free (P=0) and so Q was high.  As with most things, there is an inverse relationship between P and Q.  The lower the P is the more Q there is demanded.  Thus, we can regulate carbon by attacking either P or Q.  One could tax emissions which would cause the P to rise and then cause the Q of carbon to decline.  Or one could control the Q of carbon emissions which would lead the P to rise.  Limiting Q is what an emissions trading scheme (ETS) does and is not a tax.  An ETS limits the quantity and says nothing explicit about the price. 

The difference between attacking the P (tax) and Q (ETS) is both real and political.  The real difference is to do with certainty and flexibility.  An ETS gives a government certainty on the emissions heading into the atmosphere.  Q is set by the government through the carbon pollution cap.  This is set by the government and so the government has certainty on Q.  The corporations don’t get certainty but they do get flexibility to trade for more units.   A tax reverses these attributes.  Corporations get certainty from a tax for they can know how much they will have to pay whereas the government does not get certainty for it is always unclear how much corporations will lower their Q as a result of a higher P.  But the most important difference between a tax and an ETS is political.  The “T word” produces an odium in Western democracies that has profound, even toxic, political implications.

The Australian scheme introduced in the Clean Energy Act 2011 is not a tax.  In its essence it regulates Q not P.  For example the biggest taxpayer, the electricity generator GDF Suez, lodged carbon units with the quantity of 25.8 million carbon units in 2012-13.  It is all about Q (James Bond would be rapt).

For the first years, the cost of exceeding the allocated quantity by the 500 regulated corporations is fixed and this makes the scheme look a little tax like.  But in its essence the Clean Energy Act is an ETS for it restricts Q and for a short time fixes the cost of exceeding the carbon units allotted by the scheme.  (An addition myopically insisted on by the Greens)  It is not a tax because of its Q oriented essence even if the price of exceeding Q is fixed for a short time.  It is not even correct to call it a short term tax/ETS hybrid.  It is driven by carbon Q and therefore is not a tax on P.

So when Clive Palmer and others say that they want to scrap the tax and look at an ETS they are talking nonsense.  We have an ETS already.

Political discourse inevitably is conducted with many bungles informing debate.  The world is complex and mistakes are common.  The mislabeling of the Clean Energy Act as a tax is a howler.  On this misunderstanding has swung the fate of a few governments.  We need to understand once and for all that this tax is not a tax.

And what do we learn about the theory of knowledge (epistemology)?  I think we learn that flawed knowledge flowers when knowledge is difficult or hard to obtain.  We don’t know about being dead so there is much faith in all sorts of weird but consoling ideas.  The economics of a difficult subject like the pricing of carbon is inaccessible and so complete crap dominates debate.

What is your view?

Do you agree that faith flowers when the facts are hard to get?

Is faith in the political debate as irrational as belief in God?

Do you agree that we have a carbon trading scheme already or am I wrong or just pedantic?

Over to you guys…

Oh Please God - Extend the Child Abuse Commission.

I have just read the interim report of the Royal Commission into the Institutional Responses to Child Sex Abuse.  This inquiry needs to be extended.  I urge the government to stump up the extra 100 mill for the necessary extension of this landmark inquiry.

The Commissioners at work.

As the name implies, this inquiry is concerned with INSTITUTIONS.  It does not examine the individual abuser as such.  It looks at why abuse has been tolerated by institutions and how those institutions could change. 

Most of these were faith-based institutions, followed by government institutions. Of the faith-based institutions, 68 per cent were Catholic and 12 per cent were Anglican.  I am not saying that faith has a monopoly on these crimes.  Far from it as Rolf Harris demonstrates.  However, the faith based institutions were clearly over represented probably because the people in a faith owe such a strong allegiance to their church or temple.

The results of abuse are truly awful.  Almost nine in 10 participants reported impacts on their health, including depression, anxiety, low self-esteem and a lack of trust in authority.  Suicide can be rife with some aggravated abusers. 

Participants also commonly reported:

•impacts on relationships, such as difficulties with trust and intimacy, and a lack of confidence with parenting;

•educational and economic impacts;

•feeling alienated from their peers and the community.

In short, abuse can destroy lives.

Most survivors had previously disclosed their abuse. On average, it took them 22 years after the onset of abuse to do so.

Most survivors reported being abused multiple times, and some spoke of multiple offenders in the same institutional setting.

Children were also sometimes moved from one place to another and abused in both places. Or they were abused at home, removed from that home and then abused elsewhere, such as in foster care.

Survivors reported that they told adults in positions of authority what was happening but those adults did nothing.

Many also reported that perpetrators were moved from one region, diocese or state to another in the wake of complaints.

Abuse happens in a variety of institutions but has occurred more frequently in some.  There is an urgent need to promote what makes an institution child safe.

The Commission received allegations of abuse in more than 1,000 institutions.  Religions top the list.

The Commission is concerned with what makes a child safe institution.  Child safe institutions begin with leadership, governance and culture. Submissions told of the importance of institutional governance for promoting child safety.

Save the Children Australia, for example, argued that:

‘... the role of governance and

management leadership in

creating a child safe organisational

culture is vital. There must be

congruence in leadership behaviour

and commitment to achieving

this. Board and Executive staff

are powerful role models and

their actions and behaviour can

send strong messages about

organisational culture, which can

motivate staff. Their advocacy

and support for child safe

organisational culture is critical.’

Some submissions argued that child safe governance involves not just leadership, but also management styles that are child friendly, open and egalitarian.

“Conversely, rigid and overly hierarchical governance disconnects those governing from regular contact with staff, parents and children. It increases the risk of child sexual abuse going undetected.  Bad institutions place more value on its own reputation than the safety of children.”  DOES THIS SOUND FAMILIAR?

Religious organisations often promote obedience and the importance of respect for the hierarchy.  Such notions call forth abuse. 

And will the Church recover?  I suspect it will.  The Church will now diminish or maybe even stop child abuse.  As the current crop of victims die out, the outrage will abate.  The Church will have learned its lesson for the next 50 to 100 years.  I am sure it will bounce back.  In the interim, this landmark study must be funded to continue until it is completed.

What is your view?

What do you think makes for a child safe institution?

Is the church contrite or is it faking contrition?

Will the church recover?

Is this a moment of grace for godlessness or do we look sleazy if we act all triumphant?

Should we continue the investigation or is enough study so far, enough?

Over to you guys….