Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidise it.
Ronald ReaganI learned something today; there is a 1c per litre tax on the petrol in my car’s tank used to subsidise Australian oil refineries.
Worse, the unions and Opposition think this isn’t going far enough.
Primarily, the reason given is the usual “to protect jobs” bollocks.
The government argues keeping refineries open will suppress the price of fuel and modelling suggests wholesale prices would increase by almost 1¢ per litre if production ended, adding up to $4.9 billion over a decade.
Oh good; they’ve got a model.
Well, why didn’t you say so earlier?
We love models in 2020, they’re such a great way to build our confidence in an argument, and they’ve got such a good track record, they’ve never lets us down previously…..
Interestingly, the part not being said aloud in this article is the national security argument. It is referenced by the union though, here.
….our politicians now seem to understand the significance that refineries have to our national and economic security and how difficult the operating environment has been.
A similar low bow was drawn before the car manufacturers took the taxpayers’ money and scarpered.
It was never quite made clear how the ability to build a shitty Holden Commodore would dissuade or slow President Xi and the PLA Navy from steaming into Sydney Harbour and Port Philip Bay with all guns blazing. An allergy to garish paint jobs and shaded windows?
Putting aside the hilarious concept of Australia needing a refinery for reasons of national security, the protection of refinery jobs is a classic example of the Broken Window Fallacy, best described by Henry Hazlitt.
It’s probably only fair we subsidise fuel refining, after all, we chuck money at wind farms, solar energy and the coal mining industry. Why not oil refineries?
2020; the year we all stopped worrying and learned to love being Keynesians.