Doctor and activist
26/04/2020
Dr Ben Ewald from the Hunter, who has been working with Doctors for the Environment has been lobbying for a Federal EPA and wrote a submission on the load-based licensing system, which is another name for polluters paying a levy per tonne of pollutant that they produce. There is some charge for each type of […]
26/04/2020
A Recession Alert! A Law is Coming to Get Ready for Negative Interest Rates, but it being sold as just another move against the ‘black economy. The bill is the ‘Currency (Restriction Use of Cash) Bill 2019’. Cash is used in the black economy to avoid tax. But when the GST came in, the obvious […]
26/04/2020
Capitalism is so entrenched as the major aspect of social organisation that when anyone in the Greens questions it, this is assumed to be electoral doom. But there are intelligently argued essays about its limits and its problems. I recently discovered Wolfgang Streek asking, ‘How Will Capitalism End’ in a heavy but still readable essay […]
26/04/2020
All governments are very concerned about the economic effects of the COVID-19 pandemic as well they should be. The medical costs will be huge but as is being belatedly acknowledged the whole of society is to shut down. Most industries will stop. Few will work; nothing will be produced and there will be much less […]
25/04/2020
Giving Out Money is not easy. Many are worried about big charities- how much actually gets to the people who need it? The government has not managed to give out the Bushfire relief money and it seem that neither has the Red Cross. Now they are promising help for the Corona Virus epidemic- do they […]
22/04/2020
22 April 2020 Ansett Airlines collapsed in 2002 and nearly took Air NZ, its owner with it. It had 40% of the market at that time. It had had subsidies, but continued to lose money. Virgin Blue, a cheap carrier had just come into the market and may have gone broke had Ansett not collapsed […]
02/08/2019
Recession Alert! A Law is Coming to Get Ready for Negative Interest Rates, but it being sold as just another move against the ‘black economy. The bill is the ‘Currency (Restriction Use of Cash) Bill 2019’.
Cash is used in the black economy to avoid tax. But when the GST came in, the obvious time to restrict cash transactions, this was not done. Now it is coming in the above bill, banning cash transactions over $10,000 apart from a few exemptions which can be turned off by regulation, (i.e. without going back to Parliament). This bill was announced last Friday afternoon 26 July, and not picked up by the mainstream media. The consultation period is very short- 26/7/19 to 12/8/19.
It begs the question; ‘Why restrictions on cash now?’
It seems that the answer is that when the economy will not grow, interest rates are lowered. They are at 1% now, so cannot go much lower till they get to zero. How do you stimulate the economy when the interest rates are zero?
One way is to tax people who are not using their money and give it to the banks, who presumably will give people money to take the stored cash and use it.
Some countries already have restrictions on cash. The 500 Euro note was withdrawn by the European Central Bank. France has banned transactions over 500 Euros, Italy 3000, Spain 2,500. Some long-term interest rates are already negative.
From the public’s point of view, if you are going to lose money by putting it in the bank, it would be better to keep it in cash and put it under the mattress or in a home safe. Even bullion has a storage cost. How retirees will manage is hard to say. They will be losing cash just by holding it and they simply have to spend their capital to survive. Naturally it means that all the cash in the world will be available to stimulate industry as the owners of cash will have immense financial pressure to put it into investments.
There is an IMF paper ‘‘Enabling Deep Negative (Interest) Rates to Fight Recession- A Guide’ IMF Working Paper April 2019 by Ruchir Agrawal and Miles Kimball’ which is a ‘how to’ guide for governments to use negative interest rates. At a political level the advantage pointed out is that people will blame the private banks rather than the government. The paper also suggests that a short sharp shock with ‘deeply negative’ rates might get a better response than a longer period of mildly negative rates. This gives an idea of the thinking- it is all about countering recessions. The IMF paper even canvasses the possibility of the abolition of paper money transactions!
The convenience of cards has been lessening cash use, but this new bill looks as though it is following the IMF guide and getting ready for the possibility of negative interest rates. It is not really about stopping the black economy.
The government put out a call for a discussion of this bill on the Treasury website last Friday afternoon, the crowded news day, presumably in the hope that it would not be noticed. They seem to have succeeded- There has been nothing in the mainstream media, apart from old articles referring to controlling the black economy. The Treasury seems to want people to believe that this is all part of counteracting the ‘black economy’ the email address for submissions is blackeconomy@treasury.gov.au. But it would seem that this is simply dishonest. The IMF is worried about a long-term global recession. Presumably our government is also, so they are getting their legislation in place on the IMF recipe. They just thought that you had better not know. It says a lot about how we are governed.
This information was given to me by a ‘freedom group’ called, ‘In the Interests of the People’. At youtube.com paste ‘/watch?v=770M2s6ZD8Y’ to see the video. I do not want to be the vector for conspiracy theories, but the implications of this really need to be understood and discussed. It really is not just about stopping the black economy.
The Treasury website that gives the bill has no discussion- merely explanations of the Bill, and even this is quite incomplete as the Part 2 which has the penalties is missing.
The IMF paper that seems to be the origin of the bill is fairly dry reading also but is at:
www.imf.org/en/Publications/WP/Issues/2019/04/29/Enabling-Deep-Negative-Rates-A-Guide-46598
19/10/2017
19 October 2017
The energy plan proposed by the Lib/Nat government has several major flaws based on either their poor understanding of how an electrical network works or wilful misrepresentation. It is a government sanctioned, long term price fixing agreement.
The current plan is to force energy retailers to buy a minimum amount of energy from “reliable” thermal plant to ensure reliability by reducing the input from “unreliable” renewables. The plan is not a surprise as the thermal plant owners had a big input into it. This effectively puts a base price on energy of about $85 per MWh i.e. the typical wholesale price of power from at thermal plant.
The government confuses reliability with despatchability.
Reliability is a measure of whether a power source will be working over some specified time interval. A better metric is availability i.e. the time period over which the power source is performing within acceptable parameters.
Modern well maintained thermal power stations have availabilities in excess of 95%. But for example if Liddell which has 4×500 MW turbo generators has only been able to keep 3 running consistently its total availability would be 95%x0.75 =70% i.e for 70% of the time over the last few years it has been able to despatch, supply when needed 4×500 MW. Its capacity to despatch 3 x500MW has been 95%. Actually Liddell’s performance has been much worse than this.
Base load is the Coalition’s other favourite subject. It takes about 8 hours to start up a large thermal power station and about 12 hours till it comes up to full capacity. These times are dictated by differential expansion of its components. Hence normal practice is to keep these units running continuously. They also exhibit stability problems when run at less than 30% capacity. At night when the demand for electrical energy drops, continuously running operations like steel mills, aluminium refineries, cement works etc. took up this load generally this was not enough to keep the load above 30% hence the low off peak rates offered for water heating.
The problems of differential expansion also mean that thermal plant cannot respond quickly to changes in load especially load increases.
The above limitations meant that in a system dominated by thermal plant you have to keep enough older plant running at low load so that it could take up the power of the largest unit in your system should that unit be forced to shut down in an emergency i.e. trip. This is system spinning reserve. So the price will be set by the needs of the old fossil fuel plants. This will keep the coal owners happy. It will also keep the renewable generators happy as the high price will give them a massive profit margin. It will keep Labor happy, as thye can make a magnanimous gesture of bipartisanship and when they come in there will be lots of renewables built to get the huge profit levels that have been there for the taking.
The people who will not be happy will be the industries that will go broke because unnecessarily high power prices made them uncompetitive, and the long-suffering homeowner.
Renewable energy power systems and hydro have different characteristics. Hydro is despatchable if you have sufficient water. Australia’s lack of water means that all of our large hydro stations do not operate continuously. They are mainly used to handle short and medium length load peaks as they can respond quickly to load changes. Naturally if the water were pumped up when there was spare power they would act as batteries.
Wind and PV systems are not fully despatchable as their output is dependent on wind strength and sunlight. They can respond quickly to load changes.
Their availability here in Australia is much, much better than the Liberals would have us believe and our ability to forecast wind in the medium term is now very good. Hence their availability is quite high. We can also use concentrated solar thermal plant. Here a heliostat field of several hundred hectares is used to concentrate sunlight onto a boiler mounted in a tower to heat a transfer medium, typically sodium carbonate to about 400 deg.C. The molten salt is pumped into a storage tank and then pumped through a heat exchanger to generate steam which drives a steam turbine. One such plant is planned for the head of Spencers Gulf in SA. Here the energy is stored as heat and the molten salt can be drawn from the hot tank to generate steam on demand i.e. the plant’s capacity is despatchable.
For example a wind farm costs about M$2.00 per MW to install. A 1MW unit running at 40% capacity factor, most wind sites do better, will then generate about 3,500MWh pa at $85 per MWh this will be $300,000. Assuming capital costs of say $85,000 and service and maintenance of $84,000 this leaves a surplus of $207,000 a very good financial result especially when you compare this to a thermal plant which will cost about M$30 per MW to build and take 10 years in the building compared to about 3 years for a wind farm.
Older thermal stations like Liddell are worn out especially their boilers which from a large part of the capital cost the boiler tubes suffer from stress fatigue and start developing fractures. Coal and ash handling plant starts to wear out and even the turbine blades erode due to the aggressive operating temperatures. Eventually the combination of wear and loss of availability makes them uneconomic. Try keeping a 40 year old car road worthy if you use it as a taxi.
13/06/2016
13 June 2016 Negative gearing is seen as just an easy way to make money. You buy a property, gear it to lose money and get a tax deduction. The property goes up in value, and you make a fortune. In fact, the less you put in, the higher your percentage return. It is seen […]