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Peter Whiting Editorial
Economists are worried about the depth of this pandemic-led recession, and their public advice to the Treasurer is that the government will need to spend unprecedented sums to sustain recovery. Without such an extraordinary effort by all governments, we risk a long slow recovery, with unemployment stubbornly high.
The report from the five-year Poverty & Inequality Partnership between ACOSS and the University of New South Wales produced worrying findings which should be on the radar of everyone, not just policy writers and decision-makers.
Key findings are that the highest 20 percent of households have six times the income of the lowest 20 percent. Average household wealth has now surpassed $1m, but is very unequally distributed, with the highest 20 percent having more than 90 times that of the lowest 20 percent.
The Prime Minister’s embrace of what he calls ‘a gas-led recovery’, built and financed by the government, is the last thing Australia needs. Morrison argues that gas-fired electricity generation is necessary to provide system reliability when the sun does not shine and the wind does not blow. According to the electricity energy market operator AEMO, however, there is no reliability problem with the current electricity system for at least the next few years. Indeed, an audit of Australia’s energy emissions found that gas-fired electricity plants only ran at 30 percent capacity over the last 18 months.
Hal Pawson et al
A new report from the New South Wales Productivity Commission (NSWPC) announces that “[high] housing costs […] impose broad economic costs”. That chimes with our own newly published research. The implication is that Australia’s heavily capitalised housing market will weigh down economic recovery from the shocks of the coronavirus pandemic.
A niche group of economists and epidemiologists had warned the world for decades that a pandemic would have devastating economic and social consequences. When it comes to Australia’s housing, though, the Covid-19 crisis has only served to highlight deep and long-standing fault lines.
Vivienne Skinner & Phillippa Carnemolla
Australia’s six-month moratorium on evictions is due to end soon. Some states have extended the moratorium, but when it ends, that’s likely to force even more Australians than ever into housing insecurity and outright homelessness. The moral and health arguments for housing people are clear, but many are unaware of the financial cost we all bear for not fixing homelessness.
Our review found a clear economic case for governments to take a systematic approach to ending homelessness. While this argument might be seen as a capitulation to the ‘financialisation of everything’, the darkening economic cloud of the pandemic might provide just the right cover for government decision-makers to act on the catastrophe of homelessness.
Spending amounts to A$140 million per year for ARENA, plus about A$500 million all up through other programs. A dose of reality is needed about what this money can achieve. It will increase understanding of options, some technological progress across the board, and surely the occasional highlight. But a much greater effort than ever is likely needed to achieve fundamental technological breakthroughs. And, crucially, new technologies must be widely deployed.
Governments will need to help drive uptake through policy. The most efficient way is usually to ensure producers of emissions pay for the environmental damage caused. In other words, putting a price on carbon.
The roadmap prioritises ‘clean’ hydrogen. This does not just refer to hydrogen produced using renewables. The government says hydrogen can be produced cleanly with coal and gas, if resulting carbon is captured and stored. In fact, the plan claims fossil fuel-derived hydrogen “might be the lowest cost clean production method in the short-term”.
Carbon capture and storage is an expensive, energy-wasting technology. Despite federal governments having spent more than A$1.3 billion on the technology, a commercially viable plant has not come to fruition…
In fact, the government’s plans on hydrogen (and associated steel and aluminium production), as well as on carbon capture, may all lock in fossil fuel use for decades. This outcome is completely at odds with what’s needed to address the climate emergency.
In a pre-recorded message Pope Francis addressed the 75th UN General Assembly on 25 September 2020, urging the Assembly to rethink “our way of life and our economic and social systems which are widening the gap between rich and poor, based on an unjust distribution of resources”.
He called for a renewed sense of multilateralism, “of global co-responsibility, a solidarity founded in justice and the attainment of peace, and unity within the human family, which is God’s plan for our world”. “The other path emphasises self-sufficiency, nationalism, protectionism, individualism, and isolation; it excludes the poor, the vulnerable, and those dwelling on the peripheries of life… It must not prevail.”
Photo Lock the Gate. Jeremy Buckingham. flickr cc.
29 September 2020.