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Seeking a fair GHG reduction target:part 6- Equitable Reduction Targets

This is the 6th sixth post in the series: " Seeking a consensus on GHG reduction targets ". In earlier posts we suggested 4 prop...

Thursday, 27 April 2017

How to eliminate the deficit now!

Are we living in La La Land? The polls seem to suggest so. Recent polls indicate we want to have our budget fixed but not at the expense of welfare cuts (see "Voters: cut spending but no pain to fix budget deficit"). Sort of having our cake and eating it too!


At ~$160B Social Security & Welfare is the largest single cost in the budget representing some 36% of total expenditure, and of course it is growing at the fastest rate. With a ~$37B deficit if we were to leave Welfare untouched and bring the budget into balance the savings would have to be made from Education, Health, Defence, the Public Service, etc. I wonder how voters would react to cuts of over 10% in Health and Education. Or imagine how Unions would react to a reduction of 20,000 public servant (ie 13% of the estimated 150,000)!

If this option is not palatable why not just raise taxes? Of course that also received low approval in the poll, but I am sure the pollsters would have achieved a higher rating had the choice been to "tax the rich".  Alas, taxing the rich, won't cut it any more either (see Judith Sloan's article  "Stop the rich-bashing: they pay their share" The Australian 26 April 2017). Unfortunately there is not that much cake to go around.

That now only leaves increasing taxes on everyone, while leaving their welfare payments alone.

Yes! That could work and may even be acceptable. Don't tell anyone that you are taking their money then giving it back to them. They won't work that out. Hey they haven't so far.

Limit welfare to the needy!

But seriously, you could could try something really novel. Limit all welfare payments just to the needy. Who are the needy ? We can afford to be generous, so lets call the needy those households that earn less than the average household income.

While I don't have recent figures, the above table for the 2009-2010 year (Government Benefits, Taxes and Household Income, Australia, 2009-10), shows the various adjustments to household income resulting from social services and welfare. It shows that 11% of Social assistance benefits in cash were paid to households whose income was above the median ( I had to cheat a bit by taking the third quintile and halving it on the basis that half of those in this quintile would be above the median household income and half below.) Taking the total of Social assistance benefits in cash as the total Social security and welfare budget of $160B welfare budget in the above pie chart, the 11% savings is equivalent to some $18B. A significant sum!

If we also consider the Social transfers in kind, a further $36% of these transfers were paid to those above the median household income. Taking these Social transfer in kind as represented by Education and Health totaling ~$105B in the budget, the 36% savings equates to  ~$38B.

By these admittedly simple approximate calculations we can see that limiting all Social security and Welfare payments, and Health & Education transfers just to the 'needy' households, the Federal budget could be cut by ~$56B per annum. This is massive, and certainly enough to not only eliminate the deficit but leave some change to start repaying our debt!.

Friday, 21 April 2017

What is LENR?

Is a solution to the world's energy needs just around the corner?

Over the years we've all heard such claims so you have good cause to be skeptical. My recent readings however, have made me stop and think. I happened to re-read an article first published in 1999 by Arthur C Clarke predicting the future 100 years.

Of the many interesting predictions what struck me most was his prediction, made in 1999, that the world's energy problems would be solved by Low Energy Nuclear Reactions (LENR) by, wait for it, 2002! That was at the time only 3 years into the future. Why would such a renown futurologist make such a dramatic prediction just three years into the future. I had to check it out.

Arthur C Clarke, Beyond 2001, the sun herald, June 13, 1999

So here is what I have gleaned over the past few days.

LENR is effectively Cold Fusion re-branded and though out of the limelight there is a lot of information out there.

It all started in 1989 when, you may recall, two well respected chemists Martin Fleischmann and Stanley Pons declared, with great fanfare, they had discovered Cold Fusion. The fusion power of the sun, and hydrogen bombs, replicated in a small laboratory experiments at near room temperature. Given scientists have been "just 30 years from a successful hot fusion reactor for the past 30 years", this was big news. Unfortunately after initial wide acclaim their results were debunked by the scientific community and Cold Fusion was relegated to crackpot science.

However it did not die. Many scientists continued the work and now after some decades it is making a very quiet resurgence.

While much of the material out there is a bit technical here is a video that explains the history and introduces the potential of this technology without requiring a technical background.

Arthur C Clarke was correct, LENR has the potential to revolutionize the world, and given the simplicity of the approach this could happen very quickly. Hey,Arthur C Clarke though it would happen by 2002!

Thursday, 20 April 2017

Inequality in Australia is NOT rising

Despite the oft repeated, and I guess tacitly accepted, claims by Labor and the Greens that inequality in Australia has been rising, fact do not bear this out.

In his "Wages have stalled but inequality is not rising" David Uren explores the recent review by HILDA ( Household Income and Labour Dynamics Survey) noting some unexpected results;-

  • Using the Gini index to measure income distribution, since 2001, income distribution has become marginally more equal with the Gini index dropping from 0.305 to 0.299.
  • There is no significant change in the proportional wealth of the top 10% of income earners , or the bottom 10% of income earners, over the past 15 years.
  • there is no evidence that older generation is gaining income at the expense of the young
  • there is no evidence that males are gaining income at the expense of females
  • there has always been inequality between incomes in rural regions as opposed to the citites but there is no evidence that this is becoming worse.
  • rising housing values have seen increases in household wealth for home owners as opposed to renters but this has not generated inequality in household incomes
  • following a steep rise in household incomes between 2002 and 2012, after allowing for inflation there has been no increase since then.
And concluding ;- 
"The evidence from HILDA shows that, contrary to popular opinion, the pain has been evenly shared: the incomes of the top-earning 10 per cent have stagnated just as much as those of the bottom 10 per cent and everyone between." David Uren, The Australian, 20 April 17
While stagnating income can cast gloom over the community, it is good to know that all Australians are sharing the burden equally. In this sense it is welcome news. Welcome news for most of us. But no doubt unwelcome for Labor, the Greens and their various allies, who would like to use inequality as a stick to raise taxes inequitably across our society.