Cut The Energy Crisis Crap

Written by Rick O'Shea

One early Saturday afternoon at my local fish and chip shop I ordered a hamburger for lunch. To pass the time whilst it was being cooked, I strolled in the sun along the shopping strip. Pausing at my old watering hole, the local pub, half tempted to go in for a frosty, I was suddenly taken with the number of television monitors mounted on the walls of the public bar.

There were easily fifty of these monitors and they were switched on despite the fact there were no more than a dozen drinkers in the bar.

This got me thinking about the political palaver over an ‘energy crisis.’ After all, if this pub is on average and there are, at a guess, 10,000 pubs in Victoria that equals 500,000 TV screens emitting power non-stop. The bulk of this power is being burned off with no purpose. Not only for no purpose but as a tax deduction. So where is the crisis if we can throw power away?

Further up the shopping strip I observed the same over-use of monitors in a real estate office where some 40 screens were beaming electricity form the shop window into the nether nether. Again, some rough math: Say there are 20,000 realtors in Victoria using an average of 40 monitors that equates to 800,000 units of continuous power being burned off with tax deductibility benefits.

So if the government can subsidize the unnecessary throwing away of energy, why are they proclaiming a crisis? Why is me getting home from work and flipping on the tele a problem? Why should I pay ever increasing “connection” fees whilst reducing my energy “footprint”?

“Connection” fees are actually privatised taxation. Afterall, we don’t pay a connection fee for the bowser when purchasing petrol or a refrigeration fee when buying beer. And what a rort – pushing down usage while increasing fixed connection costs. Should not my fixed fee reduce proportionately if my use reduces – logically my drain on the system is lower, so why not the cost?

Is the government yet again blinded from regulation of such wasteful (though profitable) uses of energy due to government’s infantile infatuation with the indefinable (eg dodge responsibility) mantra of market solutions? (Market solutions can be described as a scam on the taxpayer by privatising taxation. Afterall, ask the IPA if risk free profit is unearned profit. Remember the government guarantees the rate of return for these privatised utility companies. Market solutions are also a handy excuse to disregard equitable outcomes and ignore exploitation).

So the root cause of the “energy crisis” lies with market solutions and the government’s complacent kids glove approach to the philosophy demands of private sector market solutions (the right to unearned profit).

So the private sector can sell our gas overseas for more than they can sell it here. Why should we care? It wasn’t theirs in the first place. Do we get to pay the world average for accommodation rents using this argument?

Can I go to some private sector proponent’s tool shed and take away their underutilised tools on the grounds I can make more money with them? Can I help myself to their garaged second or third motor car because I can make more money with them? Acting in this manner would be regarded as theft. So stick ya overseas price of gas up ya darkest passageway.

And what does all this government gifting of benefit to sectional groups (business tax deductions) mean for the private enterprise belief in an inherent self-correcting market price mechanism (you know – the one they apply to the need to lower wages to fix unemployment)?

In the instance of the “energy crisis” all the unnecessary power consumption subsidised by tax deductibility means the productive sector must pick up the artificial imbalance (pay more) the over generous tax deductibility has placed upon the self-correcting price mechanism.

House prices are an excellent exemplar of this. Because a sectional interest (investors) skew the price by over generous tax deductibility (negative gearing and 50% capital gains tax discount) the home has to pick up the imbalance (pay more) this causes to the self-correcting price mechanism. The 50% capital gains tax discount is particularly insidious because the investor has gladly accepted the community subsidy of 100% tax deductibility beforehand.

One solution? Ignore reliance on market solutions and have government remove housing from economic policy and return it to its rightful home, social policy.

Hence the power shortage energy crisis crap. Drop your fairy tale enchantment with market solutions and regulate. How many TV screens are deemed sufficient to bet on a horse race or rent out a property? And for what hours in the day? Should unnecessary business use of power be taxed at a higher rate with the saving used to subsidise productive enterprises use of power? Or simply retained in the grid so domestic users can run an aircon on a hot day?

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