The federal budget was released last week, and it has generated varying criticisms and praise within the media. One of the more important issues is the environment, and the Labor governments policies in regard to climate change and renewable energy. 

First of all, the related issue of petrol prices. Nelson's plan to cut the excise is ridiculous. He would save the average driver around only $84 a year, and cost the government a lot in lost revenue. But more importantly this is a weak populist policy that goes against common sense. Nelson is bowing to popular pressure on the price of living and so on, rather than formulating good policy. A cut in the excise would ony reward those who drive inefficient cars, and punish those who do. The fact it would also reward those who have inadequate access to public transport is a different issue altogether. Nelson has demonstrated himself very willing to bend over under pressure. Lets hope that Rudd doesnt follow a similar plan under his proposed tax review.  

Now to energy supplies. Kenneth Davidson had an excellent article in The Age's opinion pages on Thursday which outlined the problems of energy supplies within the context of global warming. It seems both federal and state governments are happy to let fossil fuels keep on burning as long as they keep turning a profit. The idea of geosequestration that Rudd and Brumby are so eager to invest in will not be able to achieve the massive reductions in greenhouse gas emissions that are needed. Realistically, it is more a good excuse to keep burning coal than a real way to solve the climate change crisis. Geosequestration offers our political and business leaders the chance to keep up business as usual. The problem with geosequestration is not only that it will not be sufficient, but also that it keeps taking government money from other more useful areas of research, such as solar power. 

Now we return to the budget, which offers a good example of this neglect to realistic sources of renewable energy. Rudd and Swan have cut in half the $8000 government solar panel subsidy for households that earn over $100,000. Not only is this killing off the fledgling Solar power industry, but again, it is bad policy. There is no argument for cutting off the government subsidy for any level of income, because the beneficiary of solar power is the environment, and therefore everyone, not any particular household. It is completely different to something like the 'baby bonus' which puts money directly into someone's pocket. Whether this is an ideological attack on apparent middle class welfare or just a money saving measure, it goes against this government's claim of being more environmentally progressive than the last. Now Rudd is cutting the environmental assistance that Howard was willing to allow. 

So we have both a government AND opposition made up of idiots, both coming up with bad environmental policy. What hope can we really lay in government to solve this problem?

 A quick double post today.

First of all, the recent Australia-Russia Uranium export deal. It's available here, and if you want to know how it's all looking so far to me, the best analysis I have come across so far is this piece by Marko Beljac. Watch this space for more if you want to move past the anti-Russian/Putin rhetoric (Alright I get it, Putins not a nice guy!) that dominates the discussion so far.

Second, I found a good article on the status of the US economy by Paul Craig Roberts at Counterpunch. It is slightly alarming if only for the reson of the massive numbers involved...

"The US trade deficit with Europe was $142,538,000,000.  With Canada the deficit was $75,085,000,000.  With Latin America it was $112,579,000,000 (of which $67,303,000,000 was with Mexico). The deficit with Asia and Pacific was $409,765,000,000 (of which $233,087,000,000 was with China and $90,966,000,000 was with Japan). With the Middle East the deficit was $36,112,000,000, and with Africa the US trade deficit was $62,192,000,000" 

An even scarier facet of this is that the Australian economy under Howard/Costello is rapidly pursuing this US path. Australia is also more and more resembling a third world economy as resources become our prime commodity. Plus, remember that foreign debt is still rising, and the only reason that there is no government debt is beacuse they sold off our assets to pay it (Telstra etc...). So, if you must vote for Howard this November, please don't do it because hes a "good ecnomic manager" (actually...dont do it at all). 

I guess there is a small linkage between the topics: probably the main reason Australia is selling Uranium to Russia is motivated by commercial considerations, rather than any real regard for non-proliferation.

good article at counterpunch on the precarious position of the US dollar, and the real leverage of China over the US and in effect the global economy.  China has huge power over US interest rates, and after the last week in Australia, maybe we should have a quiet chat to the US about keeping its banker happy.

China's Threat to the Dollar is Real.

Also read Paul Craig Roberts earlier article there, In the hole to China.