tag:blogger.com,1999:blog-7263129089232513980.post2748452448014234018..comments2023-04-04T17:49:05.094+10:00Comments on The Oil Drum - ANZ: $10 billion a yearBig Gavhttp://www.blogger.com/profile/00682404837426502876noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-7263129089232513980.post-92089515058286310882011-02-02T01:52:32.135+11:002011-02-02T01:52:32.135+11:00I think food price has been a factor in all of the...I think food price has been a factor in all of these protests (Tunisia,Egypt etc).<br />It would not surprise me if there wasn't some sporadic violence in Indonesia. The Govt is removing fuel subsidies and food price is escalating rapidly at the same time. Floods and droughts around the world.<br />And SBY is really on the nose since the election.SPhttps://www.blogger.com/profile/12467929366702367892noreply@blogger.comtag:blogger.com,1999:blog-7263129089232513980.post-38263525999768072532011-02-01T09:49:40.660+11:002011-02-01T09:49:40.660+11:00Some of the commentary coming out on the Eqyptian ...Some of the commentary coming out on the Eqyptian protests are saying that changes to fuel and food subsidies are a contributing factor (as TOD readers will be well aware of). <br /><br />Subsidies are like a drug and should be treated very, very carefully.In small doses they can do wonders but their should always be a medical reaosn for their application, not a lifestyle choice.Coming off them can be hard. Just ask the Egyptians.<br /><br />That's the problem with getUp! They don't want to end the addiction. They just want a different kind of buzz.Ian Longfieldhttps://www.blogger.com/profile/00529593964607948048noreply@blogger.comtag:blogger.com,1999:blog-7263129089232513980.post-24085655835220859232011-01-31T04:16:36.299+11:002011-01-31T04:16:36.299+11:00Hi Termoil, I was thinking while I finished it off...Hi Termoil, I was thinking while I finished it off last night that yes, you could think of it as a subsidy to all kinds of industries... the car industry for one... but where to draw the line? I also posted that section (after a quick speed read) becuase while it was the largest there was also that "vagueness". But vague really only in the sense of the view you would get solely from GetUps letter. In the sense used by Dr. Riedy, and his point about subsidies having other functions there can be no real misunderstanding.<br /><br />In any case one thing is clear, the car lobby can not claim that the fuel excise is being used for other purposes if it does not recover the cost of construction and maintenance (if that is true).<br /><br />I'm sure some people will read it and that's whats important.<br /><br />Thankyou for forcing me to think a bit more about it.SPhttps://www.blogger.com/profile/12467929366702367892noreply@blogger.comtag:blogger.com,1999:blog-7263129089232513980.post-84136594033102072982011-01-30T22:35:52.634+11:002011-01-30T22:35:52.634+11:00Thanks for the additional info and analysis SP.
...Thanks for the additional info and analysis SP. <br /><br />The problem is that very few will read the paper and understand the nuances in the definition. They just hear "subsidy" and jump to the conclusion that it is the greedy oil, coal, gas companies that are being paid wads of taxpayers cash and that it is only corrupt politicians that are preventing that money being diverted to other uses.<br /><br />It can also be argued that the road user subsidy is a huge benefit to lots of other industries and that they should be paying for that road use through other taxes anyway. It would be inefficent to clculate these social benefits, in the same way that we don't try to hit everyone with an education benefit levy and the health sector is not fully coverd by Medicare contributions by individuals. We also don't all recieve a separate bill for defence services even though we all benefit.<br /><br />It then comes down to a question of resource allocation within the economy and how benefits and the costs are shared around. There are plenty of economic benefits to non-road users (Woolworths and Coles for example) who should be paying for the benefit through other taxes. <br /><br />As always, its complicated.Ian Longfieldhttps://www.blogger.com/profile/00529593964607948048noreply@blogger.comtag:blogger.com,1999:blog-7263129089232513980.post-75780750131762075972011-01-30T00:42:36.293+11:002011-01-30T00:42:36.293+11:00got this myself and dug a little deeper, especiall...got this myself and dug a little deeper, especially the source that quoted the fossil fuel industry being subsidised.<br /><br />When you look into it, there is only a small amount of subsidy and that is going to either consumers who may be at a disadvantage, like rural and remote or they are a different tax regime on some fuels over others.<br /><br />But presenting this the way that GetUp! has implies that the government is giving $10 billion a year directly to the producers and this is a complete distortion. <br /><br />Producers get bugger all direct subsidy and nor should they. They are already raking it in. But they are also paying royalties and income tax which heavily favours the government coffers, even after you deduct an cash or non-cash benefits that governments might provide. <br /><br />I'm not saying that they can't or shouldn't be made to pay more, but to suggest they are getting a $10 billion gift is just wrong. <br /><br />What needs to be reformed is the FBT, excise on aviation fuel and other off road fuel, scrap the discounted excise on bio-fuels, get rid of the LPG conversion subsidy (oh they did that). <br /><br />The misleading line that every Australian is saying an $800 subsidy to polluters is really $800 of tax that those same Australians haven't had to pay when buying fossil fuels. Reforming any of that won't hurt the polluters one bit. They don't care. <br /><br />But it will only take a half diligent journalist, 5 minutes to see that this $10 billion subsidy is a complete furphy and makes GetUp! look foolish.<br /><br /><br />January 30, 2011 12:26 AMIan Longfieldhttps://www.blogger.com/profile/00529593964607948048noreply@blogger.comtag:blogger.com,1999:blog-7263129089232513980.post-13277922863106777342011-01-30T00:26:28.219+11:002011-01-30T00:26:28.219+11:00This comment has been removed by the author.Ian Longfieldhttps://www.blogger.com/profile/00529593964607948048noreply@blogger.com