Labor wants to nobble Productivity Commission on climate policy
The Productivity Commission doesn’t need to be refocused or revamped, as Jim Chalmers wants it to be. We need it calling out bad policy no matter where it is pursued.
One of the reasons why the Productivity Commission (PC) is so important in Australian public policy debate is its ability to remain detached from the government of the day and, if necessary, call bullshit on policies being pursued by that government.
Under its last two leaders, Peter Harris and Michael Brennan, the PC ended up being at odds with the then-government on key issues like the need for a carbon price, the lack of benefits of the Trans-Pacific Partnership deal and so-called “free trade” deals generally, the failures of drought assistance, and the wasting of money in the Murray-Darling Basin Plan. It has also been critical of bipartisan policy priorities like “anti-dumping” protectionism.
The use of the transition to renewables as a cover for interventionist industry policy rapidly emerged as an area of PC criticism of the Albanese government. In July last year, the PC devoted a section of its annual Trade and Assistance Review to “How Australian climate policy might act as a form of industry assistance”. The PC has long held that the only efficient way to drive the transition to renewables is through an effective price on carbon, and that other methods — regulation and various forms of assistance — are far more expensive and inefficient. Last year, it explained how tax policies like the exemption of electric vehicles from state and federal taxes, grants for hydrogen power or carbon capture, or exempting some sectors from the safeguard mechanism, could be a form of industry assistance:
Read more about Labor’s meddling with the Productivity Commission…
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