Short-term policy is wrecking Australia’s economy

Below is a detailed interview with David Flint at ADH TV where I explain how short-term policy, vested interests, and sugar fixes are killing Australia’s economy and living standards.

Edited Extract:

The rental crisis in Australia has arisen because the federal government is running an absolutely massive, unprecedented immigration program.

That has driven rents through the roof and it has forced people to live in group housing, to become homeless, and to pay extraordinary amounts of money for their rents.

In order to relieve that rental crisis, the federal government is using our money to subsidise rents for low income earners instead of not creating the problem in the first place by running such an absurd immigration program.

The same can be said for energy subsidies. Australia is an energy superpower. We are drowning in gas. We are drowning in coal. We have so much of it that we export nearly all of it overseas.

We use very little domestically in comparison. We should have the cheapest energy prices in the world. But through policy failure, we have expensive energy.

This has basically driven up households’ cost of living. It’s also sent our manufacturing industry broke.

Just in the last month, we’ve seen four manufacturing firms warn of high energy prices.

Qenos, which was Australia’s last plastics manufacturer, has now exited because of high energy costs.

We’ve also seen warnings from Orica, which is Australia’s explosives manufacturer, as well as Nestle and Pepsico, who have all warned that Australia’s energy costs are simply too high and they cannot afford to do business in this country.

They’ve threatened to leave and this has all been brought to you because our idiotic federal government hasn’t reserved gas for domestic use on the East Coast.

We don’t tax our energy properly, i.e., foreign owned energy corporations nearly enough.

As a result, we have been left with too little tax revenue while we also pay these ridiculous global prices for gas, which then feeds into electricity prices.

Despite the fact that we are one of the world’s biggest exporters of energy, we should have the cheapest energy prices in the world or among the cheapest energy prices. We have expensive energy.

As a result, our cost of living has been driven up and we’ve made our industry uncompetitive.

And the government’s solution to that, instead of fixing the underlying problem, is to use our money through our over-reliance on personal income taxes, to then give some of that money back to us to artificially cover up its energy failures.

We need to tax our resources properly. Australia could be swimming in tax revenue if we copied Norway, which taxes its resource base properly.

Norway taxes its oil and gas industry at about 80%. Part of that is because a lot of their gas and oil producers are publicly owned. But even the private ones get taxed at a very high rate.

What that has done is effectively make Norwegians the richest people on earth.

A country of 5.5 million people is now sitting on a Sovereign Wealth Fund, which has been born from its oil and gas riches and is worth more than $250,000 per resident.

Australia could have set up something similar. That would have meant that we were not so reliant on personal income taxes if we taxed our resources properly.

Unfortunately, we have fluffed it over and over again. Instead, we have the opposite, whereby we do not tax our energy and resources properly. So, we are starved of taxation revenue.

Then we also make the mistake of effectively not reserving these resources properly for our own use.

Therefore, we have very high domestic energy prices and then, to make matters worse, we are highly reliant on personal income taxes.

The government solution is to import huge amounts of people from overseas so we can import taxpayers rather than shifting the tax base.

Norway would be a lot poorer place if it doubled its population to 11 million people because its resource resource riches would be diluted by half.

Instead of their Sovereign Wealth Fund being worth more than $US250,000 per citizen, it would be worth $US125,000 per citizen.

In Australia, we don’t have a Sovereign Wealth Fund set up and we then dilute what little mineral wealth we have left. We dilute mining corporate taxes and royalties among more people by running this mass immigration program.

It is completely back to front what we do in Australia. And if we had taxed our resources properly, there would be a direct incentive not to grow the population so quickly because that would make us poorer.