Calls for consumption tax to be off the roundtable menu
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Sky News AU
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- Sky News AU
Labor told 'implied carbon prices', fixing broken renewables approvals key to lowering emissions in Productivity Commission report
A new report from the Productivity Commission has called on Labor to introduce reforms which would produce a similar effect to an "enduring, national carbon price". The interim report, titled: "Investing in cheaper, cleaner energy and the net zero transformation", is part of a series requested by Treasurer Jim Chalmers ahead of the Albanese government's economic roundtable. In it, the Productivity Commission warns the government must move to address "the gaps and overlaps in emissions reduction incentives, speed up approvals for clean energy infrastructure, and create a resilience-rating system for all housing to meet our clean energy targets and adapt to climate change". By doing so, the report says Labor will be able to both lower the cost of cutting emissions, while also maximising the opportunities presented by the energy transition to boost the economy. The Commission places heavy emphasis on a market-based approach, arguing both the Renewable Energy Target and the Capacity Investment Scheme, both central to Labor's net zero agenda, be scrapped in favour of direct incentives in the electricity sector. It also calls for the creation of a new independent agency which would determine a set of "carbon values" against which all emissions reduction policies would be assessed. The agency would set "carbon values" based on the "implied carbon prices" needed to meet Australia's emissions. By doing so, the Commission argues Australia could meet its internationally agreed climate targets at the lowest possible cost. "Our recommendations align with many of the benefits conferred by a broad-based, enduring, national carbon price – a policy that many, including the PC, have consistently argued for," the report said. In addition to factoring in the price of carbon while assessing emissions reduction plans, the report also calls for major reforms to the approval process for renewables projects. "We need to build a large amount of clean energy infrastructure to meet climate targets and ensure reliable and affordable energy supply. But our sluggish and uncertain approval processes are not up to the task," Commissioner Martin Stokie said. "Getting to yes or no quicker on priority projects would meaningfully speed up the clean energy transition." The Commission argues for substantive changes to the Environment Protection and Biodiversity Conservation Act, including the introduction of national environmental standards, improved regional planning and clear rules about engaging with local communities and Aboriginal and Torres Strait Islander peoples. It also recommends the appointment of an independent Clean Energy Coordinator-General to work across government and break through roadblocks, as well as the creation of a "strike team" to rapidly asses priority projects. Other recommendations included in the report include an increase to the number of facilities covered by Labor's emissions reduction program for industry, the Safeguard Mechanism, and the abolishment of a fringe benefits tax exemption for electric vehicles.
Sky News AU
11 minutes ago
- Sky News AU
Labor to make pivotal $10 billion frigate decision with outcome set to impact ties with critical Australian ally
The Albanese government is reportedly set to make its most consequential defence acquisition since coming to office as it weighs two bids to build new frigates for Australia's navy. According to The Australian, Labor is days away from deciding whether Japan's upgraded Mogami frigate or Germany's Meko-A200 will become the navy's new $10 billion general purpose frigate. As well as determining the composition and capabilities of the navy for decades to come, the decision will also likely impact relations with Japan - a critical ally. Catch up with all of the day's breaking news and live interviews from politicians and experts with a Streaming Subscription.
Sky News AU
11 minutes ago
- Sky News AU
Three years of soaring inflation continues to weigh on Aussie households despite Jim Chalmers lauding inflation's decline
Aussies continue to be plagued with the cumulative impacts of years of price rises despite Treasurer Jim Chalmers lauding a recent drop in inflation. Mr Chalmers on Wednesday boasted about inflation falling to its lowest point since March 2021 when annual headline inflation sank to 2.1 per cent in the June quarter. 'No major advanced economy has achieved what Australia has been able to achieve,' the Treasurer said during Question Time. 'Inflation in the low 2s, unemployment in the low 4s (and) three years of continuous economic growth. 'At the same time that inflation is going up in the US, the UK, Canada, New Zealand, it's coming down here in Australia.' But household budgets are strained by cumulative price rises since Labor came to power with a myriad of factors including global supply chain constraints and large government spending being blamed for costs of many everyday goods soaring. analysis of Australian Bureau of Statistics inflation data has revealed how the costs of many household items have skyrocketed in the 36 months to July 1. Eggs are up a whopping 41 per cent with the good soaring 19.1 per cent over the past year alone. It comes amid shortages that left supermarket shelves bare after avian flu swept the nation's poultry farms. Insurances are up more than 35 per cent, while rents have jumped 19.68 per cent and gas and household fuels are up almost 30 per cent. Meanwhile, a litany of household staples including milk (up 17.88 per cent), bread (up 19.87 per cent) and fruit (up 18.37 per cent) have surged in recent years. The cost of food and non-alcoholic beverages as a whole are up 14.43 per cent, just above the 12.37 per cent total consumer price index rise over the past three years. Despite massive inflation amongst some goods, others have either sank in cost or increased below the CPI jump. Fuel costs (down 6.12 per cent) have settled since they spiked after Russia invaded Ukraine, while meat and seafoods have only risen about six per cent over three years. The rises feel unsustainable for many Australians, and the pain will not evaporate until wages catch up with the price jumps seen across the economy. Deloitte Access Economics partner Stephen Smith predicted it will be about half a decade before Australians can regain their pre-pandemic purchasing power. 'While inflation is now back within the RBA's target band, Australians are not going to see prices fall back to where they were before the pandemic,' Mr Smith told 'While some prices do fluctuate over time – such as petrol and certain groceries – prices more generally tend to rise. 'Inflation is generally forecast to remain in the RBA's target band of 2-3 per cent into the future, which means it will take several years before Australians' purchasing power is restored to pre-pandemic levels. 'In other words, the households today cannot afford the same basket of goods and services that they could before the pandemic, and they are unlikely to recover that purchasing power for at least another five years.' Shadow Treasurer Ted O'Brien said the recent inflation data was welcome news for millions of Aussies banking on further rate relief, but stressed cumulative price rises weighed heavily on households. 'A rate cut would be welcome relief to the average Australian mortgage holder who is currently paying an additional $1,900 in interest every month compared to when Labor came to office,' a statement from Mr O'Brien read. 'The price of everything has gone up under Labor and, despite today's announcement, it is never coming down. 'The ABS data simply indicates prices are now increasing at a slower rate.' Trimmed mean inflation – the middle 70 per cent of price changes core the RBA's rate decisions – continues to fall within the central bank's 2-3 per cent target band, sparking hopes of mortgage relief down the track. Many have criticized large government spending, which has soared to 27.6 per cent of GDP, for worsening inflation while prices jumped after the pandemic. 'Government spending did exacerbate the inflation problem, primarily because of income support and other payments to households, which added to spending in the economy,' Mr Smith said. 'Some of this support, such as the energy bill relief payments, could have been better targeted toward low-income households, reducing spending pressure in the economy. He acknowledged that government spending was 'not the primary driver of inflation' with administered prices - which are set by non-market forces, based on inflation data and are for services such as childcare, medical and insurance. 'This perpetuates the problems and makes it more difficult to bring inflation back down to more normal levels,' Mr Smith said. Lifting the nation's economy and putting more cash back into everyday Aussies' pockets will come into focus this month when leaders across business, politics and unions congregate at the upcoming economic roundtable. It is here where the leading minds will attempt to conjure up a solution to the nation's lagging growth and stalling productivity.
