@ScottMorrisonMP

Premier Dan Andrews – do you really think they’ll buy it?

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Dakota tribal wisdom says that when you’re on a dead horse, the best strategy is to dismount. Of course, there are other strategies. You can change riders. You can get a committee to study the dead horse. You can benchmark how other companies ride dead horses. You can declare that it’s cheaper to feed a dead horse. You can harness several dead horses together. But after you’ve tried all these things, you’re still going to have to dismount.” – Gary Hamel

This quote summed up Dan Andrews press conference where he deflected on the ridiculous arrest of Zoe Lee, the pregnant mother who was handcuffed by Victoria Police in front of her kids. It was totally unbelievable.

Is it even conceivable that the Premier of Victoria hadn’t been shown the clip by any of his staffers? Wouldn’t anyone with a shred of decency watch the viral video and condemn the heavy-handed incident? Of course not. That is more telling. Andrews couldn’t care less. He has got his 6 months in the back pocket and can ride roughshod over Victorians as he pleases with zero formula to back his megalomania. By then Zoe Lee will be a distant memory.

How is it the police were able to march into Zoe Lee’s house, charge her with ‘incitement’, cuff her while in pyjamas and seize all of her computing devices as if she was under suspicion of storing kiddie porn on her hard drive? It could only come from the laws set by parliament. The police don’t get to arbitrarily make laws of their own and violate basic human rights. We are not exactly sure how Zoe Lee fits the profile of a radical seditionist.

This is perhaps one of the most sinister actions by a political body in Australian history. Time PM Scott Morrison absolutely torches Andrews for this cowardice and keep the pressure on the premier to walk back his nonsense lockdown less have his federal funding suspended. Extortion works both ways, but most Australians would gladly support the PM in this instance.

Trillion Dollar Baby?

What will it take to wake the media up to the fact that the way our government is spending it won’t be long before we are a $1 trillion net debt baby?.

Our current federal liabilities (p.121) stand at $1.002 trillion (which is pre COVID19). Have the media bothered to look at the state of the budget accounts? Or are they too busy lavishing praise on rescue packages which have a finite lifespan.

We pointed out yesterday that the “revenue” line could be decimated by the disruption – huge cuts should be anticipated in the collection of GST, income, company and excise taxes. Not to mention huge rebates to be paid to now unemployed workers. On an annualized basis the revenue line could get thumped 30-40% if this continues for 6 months.

So on the back of an envelope, it is not very hard to work out that with a current $511 billion revenue line looking to fall towards the early to mid $300 billion mark against a projected expense bill of $503 billion a deficit of $150bn will open up. Throw on c$150bn of COVID19 stimuli arriving by June 30th and we get a $300 billion budget deficit. Our net financial worth would grow from minus $518 billion to negative $818 billion.

Rolling into next year, it is ludicrous to think that hibernated businesses will have resumed as normal. This means that the following year’s tax revenue line will look as sick as the previous period. The government will be torn shredding the expense line as unemployment shoots higher so assuming minimal budget cuts, it could face another $200 billion deficit taking it north of $1 trillion net liabilities in a jiffy.

Let’s not forget what the states may face. Severely lower handouts from the federal government via GST receipts which will balloon deficits, a trend we’re already seeing.

The states currently rely on around 37-62% of their revenue from the federal government by way of grants. The balance comes through land/property taxes, motor vehicle registration, gambling and betting fees as well as insurance and environmental levies.

All of those revenues lines can dry up pretty quickly. 40% of state budgets are usually spent on staff. Take a look at these eye watering numbers.

NSW spends $34 billion on salaries across 327,000 employees.

Victoria spends $27 billion across 239,000 public servants.

Queensland uses 224,000 staff which costs $25 billion per annum.

WA’s state workforce is 143,000, costing $12.6 billion.

SA has 90,000 FT employees costing $8.5 billion.

Tasmania 27,000 setting taxpayers back $2.7 billion.

Just the states alone employ over 1.05 million people at a cost of $110 billion pa!! The territories will be relative rounding errors.

A lot of the states have healthy asset lines which are usually full of schools, hospitals, roads and land). These are highly illiquid.

Unfortunately, one of the golden rules often forgotten in accounting is that liabilities often remain immovable objects when asset values get crucified in economic downturns. When markets become illiquid, the value of government assets won’t come at prices marked in the books.

How well will flogging a few public hospitals go down politically to financially stressed constituents?? This is why gross debt is important.

The states have a combined $202 billion outstanding gross debt including leases.

Throw on another $150 billion for unfunded superannuation liabilities. Good luck hitting the “zero by 2035” targets some state have amidst imploding asset markets. It simply won’t happen. If only these liabilities were marked to market rather than suppressed by actuarial accounting. The WA budget paper (p.42) notes the 0.4% bump to the discount rate to lower the pension deficit figure. To be fair, they are far less outrageous than US state pension deficits.

How must the State Gov’t of Queensland be praying that Adani keeps plowing ahead? How Greyhound must regret terminating a contract to ferry construction workers to the mine? We doubt the incumbent government will have a climate change bent in the upcoming Oct 31 state election. See ya.

The trillion dollar federal debt ceiling seems like a formality especially as the chain reaction created by the states puts on more pressure for the federal government to inject rescue packages to prop up their reversal of fortune budgets. It is that trillion with a T headline that will get people’s attention.

In short, we ain’t seen nothing yet.

Only one you can’t stop crashing at your place during COVID19 is the economy

Warning Signs Investors Ignored Before the 1929 Stock Market Crash ...

Brace yourself.

COVID19 will be defeated but the cure is turning out to be way worse than the disease.

Unfortunately, the sad reality is that at the rate governments are tightening legislation to keep us in shut down mode, we are day-by-day staring at a great depression.

While some will praise governments for throwing the kitchen sink at the economy with all manner of stimulus packages, the relief will be temporary because all of the ammunition for a sustainable recovery had been depleted years earlier. It is like supplying an alcoholic on rehab with an all-you-can-drink open bar.

Our feckless RBA has just embarked on QE, a mission that has failed every other central bank that has tried it. The velocity of money has been falling for decades. Who will be given access to borrowing at zero interest rates when the economy is in freefall? Which banks will lend against properties that will likely implode in value? 50% down? To think of all the reckless “first home buyer” schemes that loaded young people at the top of the property market. The RBA has been complicit. Not wanting to put pressure on the government to reform, it just kept cutting rates to keep housing afloat. It was totally negligent in its duty even though it will signal its role as a rescuer of last resort.

When will banks be forced to mark to book the value of mortgages on their balance sheet? Equity is thin as it is. 15-20% equity buffer to mortgages is pretty wafer-thin. They need to do this immediately so we can properly assess risk. Forget stress tests by APRA. They’re meaningless. Our housing market will collapse with higher unemployment. 50% falls from here are possible. Remember there will be hardly any buyers. Prices fell up to 90% in Japan after its property bubble popped.

Worse our regulators have been asleep at the wheel chasing financial institutions on their commitment to climate change, the absolute least relevant metric to save them from here. It shows how complacent they became.

Australia has made some interesting crisis policy choices. For instance, PM Scott Morrison is trying to pass rent moratoriums where landlords suspend payments from tenants until things return to normalcy. It is not enshrined in law yet. In principle that is a nice gesture even if the government is subsidizing the banks for forgone interest due to short term loan repayment moratoriums. Let’s assume this continues for 6 months. Apart from the astronomical size of the subsidy, who will ultimately end up sacrificing the 6 months? Landlords? It won’t be the tenants.

Shouldn’t landlords be free to choose whether they are prepared to forgo rent or not as a purely rational business proposition? Shouldn’t a landlord be free to enforce a rental agreement? Will contracts matter anymore?

At some stage, the free market must be allowed to function and the government will hit a tipping point of weighing stopping economic armageddon by allowing businesses to function and the marginal risk of infections. The people will be crying for this if shutdowns remain.

Landlords may be labelled un-Australian or worse but in 6 months time, if unemployment has surged to nose bleed levels well above the 6% we saw during GFC at what point will disposable income be able to support a daily coffee at a cafe?

A cafe might soldier on for a further 3 months on skeleton staff before realising that they can’t cover costs. A landlord would be well within reason to demand that early cancellation clauses and fees are enforced.

Then what of all the invoices to coffee suppliers, bakeries who provide muffins and croissants and utilities? Who misses out? What about the invoices of the coffee supplier? Will the bakery get called on by its flour supplier to pay upfront for future deliveries when it has no operating cash flow, instead of the long-standing 60-90 day terms? That happens overnight. It isn’t a managed outcome. Cash is king.

The question is why hasn’t the government taken advice from the banks on business lending so it can better assess the risks involved from those that deal every day with small companies?

We can’t just shut an economy down for 6 months and expect a return to normal when it is all over. Unemployment rates are likely to surge well above 10%.

As we wrote in an earlier piece, there are 13.1 million Australians employed as of February 2020. Full-time employment amounted to 8,885,600 persons and part-time employment to 4,124,500 persons. Retail trade jobs come in at a shade over 1.2 million jobs. Construction at 1.15 million. Education 1.1 million. Accommodation/restaurants /bars etc at 900,000. Manufacturing another 900,000. Noticing a trend in our employment gearing?

We can fudge the unemployment figures however we like. We can pay $1,500 a fortnight for 6,000,000 workers to pretend they still have a job. That is $18bn a month. The PM can talk about how this will help us bounce on the other side. If it continues for just over 6-months can the budgeted $130 billion will be spent. This is separate to NewStart payments too.

Yet, will people lavishly spend or pay down debt and economise as best they can? We think the latter unless moral hazard has truly sunk in.

What people need to understand is that our Treasury expects to raise $472.8 billion in taxes for FY2019-20. Throw in sales of services, interest and dividend income and that climbs to a total of $511 billion. Expenses are forecast at $503 billion. In the following three years Treasury anticipates $490.0 billion,  $514.4 billion and $528.9 billion in taxes. Expect those totals to be cut significantly.

So if ScoMo’s JobKeeper rescue package for workers goes beyond 6 months, that is equivalent to 27% of annual tax revenues. That doesn’t take into account the slug to tax collections of lower GST and vastly lower income tax for individuals and corporates. That is just at the federal level.

Note, states such as NSW have recently waived payroll taxes for small businesses in a  $2.3bn stimulus package. We shouldn’t forget that the NSW Government is the largest employer in the Southern Hemisphere at 327,000 staff.

We remind readers that according to the RBA small businesses employ 47% of the workforce. Medium enterprises employ 23%. That is 70% of the entire workforce who are most at risk from a slowdown.

In 2019-20 income tax collections will make up $220 billion. Company tax was forecast to generate $99.8 billion. GST $67.2 billion. Excise taxes (petrol, diesel, tobacco etc) $44.7 billion. This data can be found on page 21 here.

Local cafes are reporting a 60~80% fall in revenue. Pretty much all casuals have been let go. It is a bit hard to survive on coffee when a lot of stores aren’t stocking pastries for fear of spoilage.

It is not hard to assume a scenario where government income taxes fall to $160 billion (-28%) due to mass layoffs. One assumes many people will be able to get a tax rebate come June 30th. So this number may end up being conservative on an annualised basis.

Company tax could plunge to $40 billion annualised due to the drastic fall in revenues as customers change the manner of contracts and reign in their own spending. Anyone that thinks that business will resume as normal is crazy. The ripple effects will be huge.

Excise taxes may drift to $35 billion as people cut back on drink (currently $7bn in tax revenue), are limited in places to drive negating the need to fill up (currently $18bn in total tax take). The $17 billion in tobacco excise may weather the storm better than most.

GST could fall to $50 billion. People just aren’t spending much outside of food. Massive retail discounts will not make much difference. GST will be the best indicator of how much the economy has slowed. Even if we start to see a massaging of the GDP numbers, GST won’t lie. It will be the safest indicator.

If our assumed tax revenue sums to $285 billion annualised from the budgeted $472 billion that equates to a 40% haircut.

Trim the ‘other revenue’ column to $30 billion from $39 billion and we have $315bn. Will the government then chop away at the $503 billion in expenses? All of the stimuli doesn’t arrive at once but a lot of it in relatively short order. Surely a $300~400 billion deficit is a fait accompli?

We should also anticipate forward year tax revenues be cut c.30% for several years after. The question is when does the government realise that it must cut the public service and scrap wasteful projects like French submarines and other nice-to-have quangos? We won’t see a budget surplus for decades.

We must careful not to fall into the trap Japan finds itself in. It has a US$1 trillion budget funded by US$600bn in taxes and US$400bn in JGB issuance. Every. Single. Year.

Nothing short of drastic tax and structural reform will do. Instead of behaving more prudently by cutting budgets when we had the chance, instant gratification created by governments desperate to stay in power has only weakened our relative position. Since 2013, the Coalition has been responsible for 46% of the total amount of all debt issued since 1854.

States should quickly realise that the $118 billion in federal grants going forward will also be curtailed. NSW will likely fare the worst because its financial position is by far the best.

If the government had a proper plan, it would be looking to what essential industries have been given up to the likes of China that we need to onshore. Medical equipment, masks or sanitiser. For cricketer Shane Warne to be converting his Seven Zero Eight gin factory to produce hand sanitiser shows how much of a joke our local manufacturing has become.

We must never forget that a Chinese government-owned company displayed the Communist Party’s mercenary credentials by (legally) buying 3,000,000 surgical masks, 500,000 pairs of gloves and bulk supplies of sanitiser and wipes. So not only was it responsible for covering up the truth surrounding the virus in the early stages of the pandemic, we openly let it compromise our ability to combat the virus when it hit our shores.

China has shown it doesn’t give a hoot for ordinary Australians. So why should we continue to fold to its whims and cowardly surrender our industries for fear it’ll stop dealing with us? It is nonsense. We have some of the highest quality mineral resources which it depends on. We can bargain. We have chosen to appease a bully.

Our Foreign Investment Review Board (FIRB) needs to be far more vigilant to prevent takeovers by Chinese businesses. We should openly accept the way China conducts business practices and recognise that it is often incompatible with ours when national security is at stake. Surely this crisis has highlighted the true colours of the political system in Beijing.

That leads us to Japanese companies. Many are seriously cashed up, have a favourable exchange rate and have a long-standing history of partnering with local businesses. We should be prioritising our relationship with Japan and look to have them invest in our inevitable capital works programs – specifically high-speed rail. It is the type of project that has meaning for the future and a long enough timeline to turn an economy around.

People need to be prepared for the reckoning. There is no point softening the blow. The brutal truth will eventually arrive and we will have only put ourselves in an even weaker position with the policy suite enacted so far. Time to be rational about risk/reward. Whether we like it or not, the minimum wage will need to be cut substantially in order to get the jobs market alive again. Don’t worry, unemployment will be so high that people will demand minimum wages are cut because it is far superior to the alternative!

(Time to ditch your industry super and start shovelling your superannuation into gold)

Central banks use coronavirus as a convenient cover-up

Image result for death by 1000 cuts

Where would we be without central banks? The Reserve Bank of Australia (RBA) has trimmed another 25bps of the cash rate to 0.5%, an all-time low and the fourth cut in 9 months.  It is amazing how central banks can shape-shift from climate scientists to doctors.

Given the recent three rate cuts were unrelated to coronavirus and have failed to stimulate the economy as hoped, the pandemic has allowed the RBA to continue its limited ammunition under the context of rescuing us.

We aren’t supporters of ever more rate cuts, truth be told. Yet if central banks want to keep the disco ball spinning, why bother with a sissy 0.25%? If the RBA wants to jolt the economy back to life it would have been better to go straight to zero. Show the markets they are serious rather than drip-feed to the inevitable.

No doubt we will get the usual song and dance from politicians goading banks into passing on the full rate cut to customers. This time banks will probably fold on the back of the Hayne Royal Commission even though the truth is their funding costs won’t fall by the full amount meaning profit will be forgone for the sake of keeping up appearances.

Think through the logic. Last month, China PMI plunged to 35.7 from 50 in January, the lowest reading since January 2005  38.8 during the 2008 Global Financial Crisis.

Australia’s next economic print will be awful. Pushing through a miserly 0.25% won’t put a spring in people’s step unless they see a cycle. Personal credit growth is negative and at levels not seen since the GFC. Housing and business credit growth are at 6-yr lows. Money velocity is slowing. Business investment is at 1994 lows. Nothing to see here.

The economy needs proper industrial, structural and tax reform. After 28 years of untrammelled growth, Australia needs to realise that the complacency bred over that period will come back to haunt if we don’t wake up from the sleep walk.

As Jonathan Rochford of Narrowroad Capital said,

“When it comes to central banks, I would prefer to believe it is a combination of groupthink, an unwillingness to take career risk by speaking the truth and a willingness to either ignore or disregard counter-evidence that has resulted in the detrimental decisions since the financial crisis. However, the increasing amount of evidence, often produced by central banks themselves, points to central banks being more culpable than gullible.”

Don’t believe the hype. Coronavirus has given another excuse to cover up failed central bank policy alongside climate change green swans.

Jacinda’s deportation hypocrisy

While the international press waxed lyrical over the high priestess of woke,  NZ PM Jacinda Ardern, standing firm against Australian PM Scott Morrison over the corrosive situation being created by deportation, she ended up revealing her own hypocrisy.

The Australian Department of Home Affairs reported 907 people had their visas cancelled based on character requirements in 2018. 453 of those were Kiwis.

While she may protest that Kiwis that are deported after committing crimes/serving jail time in Australia, Immigration NZ noted that in the past 5 years, 1,040 people have been sent packing from the land of the long white cloud. Most deportees were from Samoa (145 in five years), Tonga (120) and Fiji (113). To think of all the fossil fuels required to send these people back home when she knows their islands are being threatened by rising sea levels (even though they aren’t)!

Oh, and even though the Labor Shadow Treasurer Jim Chalmers may think Jacinda Ardern’s Wellness Budget is something to aspire to, he needs to look at the data which shows Australia is more generous on a relative and absolute basis, so to adopt it would be regressive. Furthermore, it is happy with higher unemployment as a consequence.

Reality burns – our data always suspected it

As we have suspected by analyzing the data of the fire services, there was always a risk that poor administration was a big factor.

It seems 56% of Aussies polled agree vs 35% who think it is climate change related.

We list our recent reports on the fire services here. The numbers don’t lie. Hopefully the focus in the Royal Commission focus on the following.

Link between bushfires and climate change

Data never seen before compiled on climate change and fire

VIC CFA Budget statistics

NSWRFS Budget Statistics

An extra $1bn spent on fire services end up in smoke?

Senior management of fire services act like a mafia

NPWS hazard reduction data

Time we investigated the fire services personnel

Our next prediction is that the upcoming annual reports of the 8 state fire services will be stuffed full of “climate change” related commentary which was conspicuous by its absence to date.

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.

NCE

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.

Global Coal-fired power statistics – Diary of a Wimpy Kid

What is it with the self-flagellation over coal-fired power? The announcement that the Morrison government intends underwriting “ONE” coal-fired power plant brings with it the hysteria of publicly force-feeding kindergarten kids with highly radioactive sludge at recess time. Naturally, none of this outrage is based on facts. It is all tokenism.

Here are the stats for coal-fired power stations globally:

Coal Capacity

Australia has only 2.5% of the coal-fired capacity of China. Versus our total of 58, China has almost 3,000 in service.

Coal Operation

Coal-fired plants that have been announced, are under construction, permitted and pre-permit stage around the globe total 1,046. Where are the climate activists in China, India, Vietnam, Pakistan, Indonesia, Bangladesh, Philippines, Japan, Russia, Mongolia, Botswana, Nigeria, Zimbabwe, South Korea, Thailand, Malawi, Serbia, Bosnia & Herzegovina, Turkey, Egypt, Poland and South Africa?

New Coal

The mt CO2-e output of each country is as follows. Note China produces 36x more CO2.

Coal CO2

So China and India are responsible for 58% of coal-fired power generated emissions and will be 50% of all new capacity additions going forward.

Coal CO2 Contrib

China has 100x more coal-fired power on the drawing board than Australia yet we behave as though we are the biggest climate sinners on the planet! China and India have consistently been 70%+ of all new coal-fired plant capacity additions since 2006.

Coal Capa

So do Australian activists honestly think that canning one domestic new coal-fired power plant will have the slightest effect on global temperatures when our Asian and African neighbours are full speed ahead?

There have also been arguments made by activists that our coal exports should be counted against our totals in terms of emissions. Fine. Then by that logic, FNF Media expects the total emissions of every car sold in Australia (including fuel consumed) to be charged back to Japan, China, Korea, America and Europe. Every aircraft, every electronic device, every imported building material, crane, bulldozer, wind turbine, solar panel and truck that transports it. It would equal itself out pretty quickly.

Our global neighbours seem to be prioritizing national growth over climate alarmism. For it would appear they do not have the same level of brain-washed fanatics telling our kids that they have inherited a planet that will make them the last people on earth to survive.

The quickest route for Australia to end its prosperity is to cower to this insanity. To fall in line to the idea that renewables are cheaper (they aren’t) and more green is preposterous. Wind turbine blades are being put into landfill and solar panels are toxic to recycle and likely to end in the same place. Germany is giving us a great beta test case of how renewables are failing them. Indulge yourself here.

Coal-fired plants in Australia are forced to run sub-optimally to cater to the demands of the fluctuations in renewables which must be given priority to the grid. Ask anyone in large scale manufacturing how being forced to run at fluctuating levels destroys efficiency. It really is that simple.

Coal Price

Thermal coal prices are far from going out of control. So our power plant electricity generation isn’t becoming pricier due to input costs.

We have to stop becoming emotional about numbers and data and look at what they are telling us rather than build a narrative and reverse engineer the results. It always catches up to us in the end.

Our government needs to show some backbone and provide easy to understand data about reality. Rather than fold at the confected outrage which appears backed by crony capitalists.

Now that former PM Turnbull is weighing in on the debate (contradicting comments made while PM) saying that it is lunacy to pursue coal. Given his record of poor judgment, it stands to reason building cleaner coal-fired power plants is a sensible way to lower energy prices and remain a competitive global economy.

As FNF Media likes to say, the numbers will always be right in the end. Fiddle them at your peril.

Zali better pray that politicians don’t judge her climate bill on the results of Warringah

FNF Media was curious as to how the tally for Warringah MP Zali Steggall OAM’s ‘Roadmap to Zero‘ (R2Z) worked. As is often the case with these grassroots woke causes, the structure of the claims can be misleading. Amateur data collection methodology can undermine the very cause. We reveal how easy it is.

R2Z currently claims 551 ‘households’ have signed up from the 66 when we first looked into it earlier in the week. Technically this would mean that 0.8% of households in the Warringah electorate have signed her compact, up from 0.1%.

To turn that on its head, Steggall, who ran on a campaign of climate change, can’t seem to get the other 99% of households in the electorate over the line to sign up to R2Z.

Looking deeper into the sign-up process we found it only involved one’s email, name and postcode. That’s all. So one could technically live in Newtown, input a Mosman postcode and sign up. There doesn’t seem to be a process to cross-reference the signatories to the electoral roll.

One would think if the honourable member wished to truly get an accurate map of where the more environmentally conscious residents lived, a fixed address may have been a more useful process to ensure that the inputs were a) legitimate and b) where resources might need to be focused. Easy to have people tick a “privacy” waiver if indeed they are passionate enough to save the planet.

It is a bit hard to claim ‘household’ when one’s full address can’t be logged. There is nothing stopping all members of the same household signing up of the same person using multiple emails. This just reduces the quality of the data collection from a statistical perspective.

As awful as 0.8% of households is, 0.35% of the 147,333 Warringah residents is even worse.

Beyond the fact that 99% of her own electorate seemingly doesn’t care for R2Z, The Guardian ignores that and concludes,

The woman who toppled Tony Abbott in Warringah at the last election on a platform of climate change action now has the whole parliament in her sights as she seeks bipartisan support for a climate change framework bill aimed at transitioning Australia to a decarbonised economy.”

She won on a platform to remove Tony Abbott.

Ironically The Guardian includes her R2Z link as a “conscience vote” which sort of undermines the argument,

Steggall and the crossbench have begun a conscience vote campaign online and within their communities. They hope to win over enough government MPs to see the bill, which has been modelled on existing legislation in the UK, New Zealand and Ireland, pass in Australia.

She better pray politicians don’t judge her bill on the strength of the commitment of the residents or households of Warringah.

FNF Media endorses Steggall’s view reported by The Guardian

With the government’s party room once again at war over climate policy, Steggall said it was time to let individual MPs speak for their communities rather than toe a party line.”

Warringah has spoken, even with the risk of dodgy data collection. Mickey Mouse awaits updates on how to save the planet.

Open letter to Michael Mann

Dear Professor Mann,

I saw your performance on ABC Q&A last week.

Unfortunately, you may not have been aware that this is one of Australia’s worst media platforms for balanced debate or reasoned argument. The show has been raked over the coals (excuse the pun) countless times for its shockingly poor standards whether it be inviting radical feminists hurling profanity while openly calling for the murder of men, giving platforms to convicted terrorists or allowing tweets that suggested the then sitting prime minister enjoys anal sex. Without knowing its dismal editorial history, you can be forgiven for heaping praise on the show. Don’t worry, the program has made countless promises that it will do better in the future. We’re still waiting. Forewarned is forearmed.

You said you enjoy “taking climate deniers to task” but I believe it is this type of attitude that creates the very problems that get in the way of convincing them.

While you might have found it necessary to appropriate the aphorism that “you should keep an open mind, but not so open that your brain falls out,” why didn’t you just educate Senator Molan with a list of specific hard data points instead of resorting to the one size fits all ‘consensus’ line? As much as his gaffe will be replayed on a loop, I sincerely doubt those words came out as he intended.

On the subject of consensus over the science being settled, why do we still have such poor governance practices in the scientific community?

Let’s face it. There have been many controversies that have come from climatologists based on fraudulent data or lax governance in the peer-review process. Unfortunately with next to no risk of repercussions for falsifying/homogenizing data or ‘you scratch my back, I scratch yours‘ endorsements, scientists can make outlandish claims at will with no lasting consequences.

Take this example.

A major scientific paper, which claimed to have found rapid warming in the oceans as a result of manmade global warming, was withdrawn after an amateur climate scientist found major errors in its statistical methodology.

The authors sheepishly said,

Shortly after publication, arising from comments from Nicholas Lewis, we realized that our reported uncertainties were underestimated owing to our treatment of certain systematic errors as random errors. In addition, we became aware of several smaller issues in our analysis of uncertainty. Although correcting these issues did not substantially change the central estimate of ocean warming, it led to a roughly fourfold increase in uncertainties, significantly weakening implications for an upward revision of ocean warming and climate sensitivity. Because of these weaker implications, the Nature editors asked for a Retraction, which we accept.”

It was pulled only because it was caught. Peer-reviewed? Have the people responsible for giving their blessing been struck off the list as gurus for future papers given the lazy approach to miss such basic errors? Surely to have the same names appear on future academic work risks diminishing potentially important content as sub-standard. There do not appear to be consistently high enough standards to ensure the studies are always top drawer, which they need to be if debt-ridden governments are to deploy more of our taxes effectively.

Nicholas Lewis said after the retraction that,

“This is just the latest example of climate scientists letting themselves down by using incorrect statistics. The climate field needs to get professional statisticians involved upfront if it is going to avoid this kind of embarrassment in future”.

At the very least, Dr Benny Peiser, director of the Global Warming Policy Forum, said

Climatology is littered with examples of bad statistics, going back to the infamous Hockey Stick graph and beyond. Peer review is failing and it is falling to amateurs to find the errors. Scientists in the field should be embarrassed”.

It would be much better if people who possess high profiles in the scientific community such as yourself to become much more active in criticizing these shortcomings.

Put it this way. I, like many others, would like to get to the truth in climate science but because of the actions of a few bad apples, the rest of the value-added that might come from the majority of the scientific community gets diluted in the process. Fraudulent behaviour is reprehensible on any level in any industry. Yet the public have little scope to make these determinations of which science passes muster until it is exposed for failing to be up to standard. Yet they won’t roll over and accept ‘settled science’ given the levels of crony capitalism in the system.

If the climate activist movement wants to win over climate sceptics (not deniers) without shutting down the debate, start by cleaning house first. Advocate for scientific bodies to come down hard on cheaters amongst your own flock. They need to be exposed so that such works are discredited which has the added effect of improving the pool of best-in-class data and research. It would be helpful if the media helped spread the message that such bad behaviour will no longer be tolerated.

Countless people who have been non-compliant in the financial industry have faced harsh punishment in terms of fines and jail sentences. Companies have lost trading licenses and faced fines in the billions of dollars. I have yet to see any scientists face such risks when caught out for highly unethical behaviour.

Perhaps we could get far more sensible outcomes in convincing sceptics were the bad apples prosecuted. Furthermore, whistleblower protections would accelerate a cleanout of the dodgy scientists that game the system and ruin it for the rest. It has worked very successfully in your homeland with financial sector prosecutions up 16x since whistleblower laws were introduced in 2011. Better still, honest scientists have nothing to fear because such legislation acts as an insurance policy which protects their hard work.

That is how you’ll bring trust to the table.

I would be highly surprised if most scientists haven’t seen or heard of unethical practices conducted in the field of climate science.

You also mentioned that, “My view is the view of the world scientific community, every scientific institution in the world that’s weighed in on this matter – climate change is real, it’s human-caused, it’s already leading to disastrous impacts here in Australia and around the rest of the world. And it will get much worse if we don’t act.

Every institution? Even if we were to take this as gospel, it is highly likely that the majority have distinctly different takes on the ‘extent’ of human impacts made more disperse by varying timelines. Some no doubt say there are very minuscule impacts to others that paint more extreme scenarios. Therefore to imply there is one united view seems a bit far fetched. Despite the position of more conservative scientists, the only view that is pedalled appears to be the alarmist one.

We constantly hear noise from the media, egged on by alarmists, that extreme weather events are becoming more widespread. However, the UNIPCC’s March 2018 report on weather extremes (with respect to anthropogenic induced global warming) notes:

“…There is low confidence in observed trends in small-scale phenomena such as tornadoes and hail because of data inhomogeneities and inadequacies in monitoring systemsin some regions droughts have become less frequent, less intense, or shorter, for example, in central North America and northwestern Australia. There is limited to medium evidence available to assess climate-driven observed changes in the magnitude and frequency of floods…low confidence for the attribution of any detectable changes in tropical cyclone activity to anthropogenic influences..low confidence in projections of changes in extreme winds.. low confidence in projections of changes in monsoons…low confidence in wave height projections…overall low confidence because of inconsistent projections of drought changes…low confidence in projected future changes in dust storms…low confidence in projections of an anthropogenic effect on phenomena such as shallow landslides.”

Where is the scientific community’s transparency in pointing out that the probabilities and confidence levels about such ‘extreme weather’ claims remaining very low? Coming from a background in statistics, such low confidence levels smack more of ‘unsettled’ science. Yet the alarmists preach it as though the evidence is irrefutable when it statistically can not be. It gets worse.

Although the media never covered it, can you please explain why so many scientists trashed the IPCC for its governance practices? The public is constantly told that the UN IPCC climate bible is the gold standard which cannot be denied.

Did you see the UN Interacademy Council committee posted a questionnaire on its website and invited interested parties to respond to the processes at the IPCC? This is what they said;

some of the lead authors…are clearly not qualified to be lead authors.” (p.16)

There are far too many politically correct appointments, so that developing country scientists are appointed who have insufficient scientific competence to do anything useful. This is reasonable if it is regarded as a learning experience, but in my chapter…we had half of the [lead authors] who were not competent.” (p. 138)

The whole process…[is] flawed by an excessive concern for geographical balance. All decisions are political before being scientific.” (p. 554)

half of the authors are there for simply representing different parts of the world.” (p. 296)

Lest anyone think that people from less affluent countries were being unjustly stereotyped,

The team members from the developing countries (including myself) were made to feel welcome and accepted as part of the team. In reality, we were out of our intellectual depth as meaningful contributors to the process.” (p.330)

Are climate deniers, as you label them, justified in questioning the validity of the processes which are relied upon to allocate $100s of billions in taxpayer money if the scientists themselves see deep flaws? This survey wasn’t conducted by a fossil-fuel lobby group but the UN itself. This is the home team exposing its own inadequacy but the media is deathly silent.

The above survey is an utter embarrassment and I would be interested to hear your response to those claims. It is alarming to know that government policy is being based on such sub-standard procedures. It would be nice for scientific bodies to come out in unison to call out these problems to ensure that properly vetted governance practices are introduced and enforced. We all win if this happens.

You said on the Q&A program that, “If we act, if we bring our carbon emissions down by a factor of two within the next 10 years, which we can do if all partners work together, then we can avoid the worst impacts of climate change.”

Do you honestly believe if Australia brings emissions from 1.3% to 0.65% that will have the slightest impact when we know that China has openly stated that its emissions (now at c.30%) won’t stop growing till at least 2030? Furthermore, Australia’s population grew by 10% since 2013. Reducing emissions in half with a growing population will mean that even more drastic measures would be required.

China will be growing an Australia every week by 2030 from every two weeks today. If we hit your target, China will still be steaming ahead at two Australia’s per week. Unfortunately, the economic pain inflicted to reach such targets is simply too steep in reality. Renewables have a very poor record in Australia despite our world-leading commitment per capita in introducing green energy.

You make the criticism about the stance taken by the Murdoch media on climate change. By that measure, The Guardian is conspicuous for its constant alarmism where it openly admits to sensationalising language.

I sincerely hope you join me in ways to close the gap between alarmists and sceptics. We live in a cancel culture society. The more this is accepted, the harder both sides dig in their heels. The only way to effectively find common ground is to tidy up the procedures, governance and practices whereby poor behaviour is summarily punished and outed so that people on all sides can have trust that investment decisions made reflect fact, not fiction.

With a heavy heart, the EU’s recent declaration of a ‘Climate Emergency’ rejected revisions to the legislation which requested, “Recalls that climate change is one of the many challenges facing humanity and that all states and stakeholders worldwide must do their utmost to measure it scientifically so that policy, and especially spending, is based on observable facts and not on apocalyptic fearmongering or unreliable models; emphasises that there is no scientific consensus on what percentage of climate change is anthropogenic and what percentage is natural.”

Surely if we are to build a sensible united front, this is a shockingly poor start. Instead of taking sceptics to task, work to put their concerns to bed via cleaning up those that muddy the waters of those with a genuine message. Questioning bad behaviour doesn’t require an open mind. Ignoring it risks one’s brains falling out.

Yours sincerely,

M. Newman