Nothing to be proud about

Biz Ivest

Flipping through the latest RBA Chart Pack, it is no surprise that business investment keeps sliding off a cliff. As a % of GDP, it has slid from a peak of 18% off the short-term trough of 14% (GFC) to 11%, which now puts it at 1994 levels. It proves the old adage that businesses don’t invest because interest rates are low, they invest because they have confidence in the cycle.

Our government should be looking at this with alarm bells. It doesn’t take too much imagination to work out that political instability has played its part.

Australia was once regarded as the vanguard of political stability in the region which made it a sensible investment choice for domestic and international investors as a place to do business. There was a comfort in knowing that there wouldn’t be revolving door prime ministers and flip flops on policy positions. After all, much business investment takes years to get to the production stage.

The Howard years saw our business investment surge. Sensible fiscal policy was a feature too. While Rudd can be forgiven for GFC causing a slump in business investment it resumed until political instability put the mocker on business confidence.

We have been running deficits ever since and cranking up the national debt (we wrote about it here) because it is clear we don’t have sensible free-market conditions to self sustain direct investment at anywhere the levels we need.

Instead, we kowtow to radical activists who try to stop investment in projects like Adani and conduct illegal secondary boycotts on businesses like Greyhound Australia and Siemens without repercussions.

Whether coal is evil or not is irrelevant. The problem is such activism, which is further supported by ideologically corrupted government environmental departments – that push their own agenda on granting approvals – doesn’t endear domestic industries or foreigners to invest in us. These are dangerous precedents. All of this tokenism when we only need look at the realities of what will happen down the line.

Don’t take our word for it. Even our domestic businesses are leaving.

Thanks to Australia’s ridiculous energy prices, Aussie company Bluescope confirmed the expansion of capacity in Ohio. In Feb 2019, the company CEO said, “much cheaper energy in the United States is a major driver of the company’s preparedness to invest in a $1 billion expansion in Ohio.”

In 2017, Tomago Aluminium reported, “We have to grow to be competitive and to be ahead of the curve, but when the spot price went to $14,000 [per megawatt hour] we had to take that load off. It’s just not sustainable. You can’t smelt at that price. We have had to curtail or modulate the load [on occasions] or we get hammered by the price…We cannot continue to keep paying those prices. We have to find a solution. The prices are crippling”

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Unfortunately, 28 years of unfettered economic expansion has made us complacent. We think this economical miracle has no off-ramp.

None of this is remotely surprising.

Can we honestly say that the impact of higher electricity prices hasn’t been a factor in pushing away investment in engineering and manufacturing? So this mad push for renewables will not alleviate this pressure. Germany is the perfect beta-test crash dummy. It predicted flat prices. They doubled from those forecasts.

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Yet our political class is playing with fire.

We never thought Australia was realistically going to have a surplus when it was announced. Secretly there must be a sigh of relief in Treasury that the impacts of the bushfires and coronavirus will provide a convenient scapegoat to miss those targets under the premise of ‘doing the right thing.’  And no that does not mean the government is glad those two catastrophes have happened from a humanistic approach.

We need proper reforms. We need to ditch these notions of political correctness in public policy. We are as unimaginative as many other governments around the world. Living on a low-interest rate fuelled debt bomb. Kicking the can down the road simply does not work. Why aren’t politicians convicting their cases with evidence rather than folding to ideological positions held by fringe dwellers on Twitter?

When we visited Israel on a business delegation in 2018, Israeli PM Benjamin Netanyahu uttered the only 4 words that mattered for investors – “we want your business.” The innovation nation knows what it is good at and is prepared to back it to the hilt.

It would be so nice if our government spent some time in Israel to discover that we have it all wrong. Because we are only storing up a rude awakening. When our economy does suffer from the eventual ramifications of all of that lack of investment, the public will be howling that they can’t pay their mortgages, that they can’t get decent jobs and they can’t keep the lights on. None of that would have been necessary if they had been more open to business.

The ultimate result will be that we’ll put ourselves deeper into debt to fund some monster infrastructure projects that will provide short term relief, not long term solutions.

The foreign investors that could have helped had we treated them in a more dignified fashion will just buy our assets at fire-sale prices instead. Then we’ll have another moment to howl at the moon.

That will be the true price of our complacency. Experience is a hard teacher. You get the test first and the lesson afterwards.

Democracy dies in darkness indeed

democracy dies in darkness

The Washington Post’s motto is “Democracy Dies in Darkness.” How classic that the newspaper editors allowed the first headline before the spectacular backfire that caused them to adjust it to the one on the right.

The opinion piece noted, “The current process is clearly flawed, but what would be better? … A better primary system would empower elites to bargain and make decisions, instructed by voters.”

At least the paper’s true colours came out that regular voters mustn’t have the requisite intelligence to make such important decisions that highly educated liberal elites obviously do. Way to go!

Maybe WaPo should change the masthead to “Sunlight is the best disinfectant“.

 

A worthwhile 20 minutes on nuclear

Michael Shellenberger makes a sensible case for nuclear power. A worthwhile 20 minutes with a lot of interesting statistics especially in comparing nuke power to renewables in terms of life cycle costs.

Some interesting stats are as follows:

“Germany’s carbon emissions have been flat since 2009, despite an investment of $580 billion by 2025 in a renewables-heavy electrical grid, a 50 percent rise in electricity cost.”

“Consider California. Between 2011–17 the cost of solar panels declined about 75 percent, and yet our electricity prices rose five times more than they did in the rest of the U.S.”

“Building a solar farm is a lot like building any other kind of farm. You have to clear the whole area of wildlife…Thanks to its energy density, nuclear plants require far less land than renewables. Even in sunny California, a solar farm requires 450 times more land to produce the same amount of energy as a nuclear plant.”

“Solar panels require 17 times more materials in the form of cement, glass, concrete, and steel than do nuclear plants, and create over 200 times more waste…We tend to think of solar panels as clean, but the truth is that there is no plan anywhere to deal with solar panels at the end of their 20 to 25-year lifespan…Experts fear solar panels will be shipped, along with other forms of electronic waste, to be disassembled—or, more often, smashed with hammers—by poor communities in Africa and Asia, whose residents will be exposed to the dust from toxic heavy metals including lead, cadmium, and chromium.“

Bernie can whip up crowds too

17,000 showed up to Bernie Sanders’ latest rally in Washington. We shouldn’t underestimate the scope of his support despite not being able to cost healthcare for all, free education or canceling student loan debt. Some pundits put it at $60 trillion.

While we still think Trump will win 2020, the Democrats need to carefully weigh their hatred of the president vs their dislike for Sanders stealing the Democratic nomination as an independent. The DNC is no stranger to dismissing democratic process in the primaries.

Evil corporations doing the right thing

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Coles supermarket has confessed, much like Woolworths last year, that it underpaid some staff members. Yet this has more to do with classifications in pay, rather than anything sinister on Coles’ part. Yet watch the media spin it into a nasty takedown of corporate greed. Politicians, including AG Christian Porter, were making capital out of it – pathetic.

In real terms, it is $20m over 6 years across 1% of its staff. The company made $31bn in revenue and $1.3bn EBIT in the last fiscal year. The unpaid salary amounts to 1.54% of EBIT or 0.06% of revenue. Or over 6 years, around 0.25% and 0.01% respectively. Things may be tough in retail, but we don’t believe for a second that Coles was acting unethically or intentionally.

Declaring a Climate Emergency without many scientists

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On Feb 14-15, the likes of Dr Keryn Phelps, John Hewson, Peter Garrett, Michael Mann, Adam Bandt, Jane Caro and others assembled in Melbourne to pontificate at the National Climate Emergency (NCE) Summit where they slammed the table and demanded we hold politicians accountable under a new democracy!

While we vigorously defend their right to free speech, we question the glaring lack of scientists that wanted to participate as speakers at this event. This was the breakdown of the 100 speakers.

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That is right, there were as many high school student activists as people who could profess to be legitimate professional climate scientists. There were even more lawyers present. In fact, media (the majority who have worked or work at the ABC), activist/lobby groups and politicians made up 67% of the total. Therefore one can work out quickly enough that there were precious little scientific-based facts behind the agenda.

At the very least, several poets were invited to speak to add to diversity. Many academics who spoke weren’t actually from climate fields.

Here are a few speaker profiles in no particular order:

Recently elected Darebin councillor, Trent McCarthy, had written in his profile, “Trent is the proud parent of two primary school student strikers.”

Another panellist, Costa Georgiadis was referred to as “a TV personality and landscape architect. Since 2012, he has hosted the ABC’s Gardening Australia”

“Bernie Hobbs is an award-winning science writer and presenter at the ABC.”

“[Paddy] Manning has more than a decade of experience as a journalist for the ABC, Crikey, The Sydney Morning Herald, The Age, The Australian Financial Review and The Australian.”

“Natasha Mitchell is a multi-award winning science journalist, presenter, and podcaster with the ABC.”

“Leigh Ewbank is the current Act on Climate coordinator at Friends of the Earth.”

Precious little diversity of thought among the 100 speakers.

Yet we have seen this type of shallow content activism before. Remember when we reported that 268 Australian academics cosigned an open letter supporting the Extinction Rebellion.

While the content was predictable, the statistics were anything but convincing. We noted,

“Perhaps the most hilarious signatory to the letter was Matthew Flinders of Flinders University. Unless the university website has another Matthew Flinders listed as an active member, our esteemed explorer seems to have navigated his way back to life…simply adding to the total lack of credibility of the cabal of 268 academics who believe they have some sort of intellectual superiority over us. If one ever wanted proof of our judiciary leaning hard left, 12% of the people that signed this document were in law-related fields.”

“…Many of the woke academia come from fields such as stand up comedy, poetry, arts/education, sports management, archaeology, LatAm studies, sex, health and society, social services, veterinary biology, culture, gender, racism…are you catching the drift of those supporting XR? Even Monash University’s Campus Operations Manager and Telephony Application Administrator signed it! Wonderful individuals but should we hold our educators to such high standards when anyone’s opinion will do?”

“…Eerily, over 90% of the signatories do not appear to be renowned experts in teaching science, much less climate science. Which means, why weren’t the scientists in these universities willing to commit their names to a cause that fits their ideology? Who needs them when one faculty member from Monash University deals with ‘Imaginative Education‘?…”

“61% of the signatories were from universities situated in the Democratic People’s Republic of Victoria. Within that, 65 (more than all those that signed from NSW universities = 63) of those 164 names from Victoria were from RMIT, the school where the lecturer offered bonus points for sending selfies from the school climate strike. Precious little free thought one imagines.  Monash had 44. So two universities in Melbourne made up 109 of the 268 Add La Trobe University and half of the signatories are from Victoria. Premier Dan Andrews must be proud.

Tinonee Pym, a research assistant at the Swinburne University of Technology in NSW helped pen,

‘C’mon, no one wants a dick pic’: exploring the cultural framings of the ‘dick pic’ in contemporary online publics

Undoubtedly this research has only certified climate science credentials at Swinburne University to convince sceptics of the validity of XR.”

Once again, the force of numbers means absolutely nothing. We are often told by climate activists that we should listen to the climate scientists. We would most gladly do so provided events like this managed to herd a much larger representation of such expertise, including those with dissenting opinions. As it stands when only four scientists attend, including those with very contentious records, there is little hope for sensible debate.

As it stands, the NCE Summit was nothing more than a confirmation bias gathering of activists trying to swing policy to suit their crony capitalist desires.

The NCE forum only wanted to indoctrinate, not educate. Is it any wonder FNF Media was blocked from XR Australia. Identical mentality.

Net zero heroes won’t save us

What is it with net zero emissions by 2050? It is so simple for politicians to blurt out these words as near as makes no difference none of them will be in office to take responsibility for any outcome.

As for Australia, PM Scott Morrison has a point that it should be technology led. However let’s think logically about the “cost” which he says Aussies have right to know about.

First of all, no one has worked out how to decarbonize steel. Carbon fibre is derived from petrochemicals. So that is two vital structural materials taken out. Aluminum is hideously power intensive to produce despite recyclability. Scrub the 170,000 jobs in mining. Manufacturing? Another 840,000 roles no longer needed.

No steel or fossil-fuel derived plastics will make it complex for tradesmen to be able to construct let alone repair homes or buildings. Glass also requires a lot of energy. As does gyprock. Bin 1.1mn jobs in construction.

What of a net zero carbon emissions world in other areas?

Let’s start with tourism:

$60bn industry. 8.5million visitors came to Australia in 2018. 1.4m from China. 789k from the US, 733k from the UK and 470k from Japan.

These numbers don’t include Aussies that want to take holidays abroad. 9.5m trips were made by Australians to overseas destinations.

Still to get to net zero, we need to ban air travel. With that, might as well stop Badgery’s Creek airport construction immediately. No point building such extra capacity if we won’t have much time to use it. Wasteful spending.

Tourism? Throw another 1m jobs into jeopardy.

Hotels? Bring your own towels and sleeping bag.

Coffee? Bring your own mug only.

Retail? No carry bags and no goods that are derived from fossil fuels can be sold. Gone. Of the 1.3m jobs in retail, most no longer needed.

Restaurants? There will be no gas to cook your meal. Bring your own utensils.

We need to ban long distance trucks and the haulage business. Forget those living in remote areas who rely on road trains. Forget your out of season fruit and veg at Woolies. Another 600,000 jobs.

Cars? Get rid of them too. The batteries in EVs create 150,000km of CO2-e in the production process before leaving the factory. For safety, cars will be required to use materials to meet crash standards. Even if autonomous driving succeeds, it won’t be 100% foolproof. Better off banning cars outright to meet 2050.

Synthetic rubber in the tyres and door seals made from fossil fuels. Out. Brake and electric motor materials – all made from fossil fuels. Scratch. Air bag with pyrotechnics? Fossil fuel derived. Dashboard, seats, seat belts or iPad centre console? Petrochemicals.

The power grid to charge them? All fossil fuel derived – from wind farms to solar panels and the equipment to make the charging stations. If there are miscalculations on power needs after Dec 31st, 2049 then too bad. Rationing will be required.

No TVs or smart phones or computers. All fossil fuel derived.

No hospital equipment or life saving medicines. All made from petrochemical and fossil fuel derivatives.

In short, in order to decarbonise to net zero by 2050 we’d need to spew carbon emissions like there was no tomorrow to meet the crushing penalties that would result.

Why are governments even entertaining such ridiculous stupidity?

We only want to see Mad Max in the cinema, not in real life.

Here is a picture of HK International Airport check in last night for a bit of context on how a virus can slam an economy before we bother with net emissions