Australian Prime Minister Scott Morrison states that net zero emissions will be achieved through technology and "the animal spirits of our business community". I rather thought it was those very same animal spirits which had been globally polluting our atmosphere since the Industrial Revolution began in the 1700s

 

On 19 April 2021 at the Business Council of Australia Annual Dinner Prime Minister Scott Morrison informed the world that; “We are going to meet our ambitions with the smartest minds, the best technology and the animal spirits of our business community. We need to change our energy mix over the next 30 years on that road to net zero emissions…..It will be achieved by the pioneering entrepreneurialism and innovation of Australia’s industrial workhorses, farmers and scientists.

It will be won in places like the Pilbara, the Hunter, Gladstone, Portland, Whyalla, Bell Bay, the Riverina. In the factories of our regional towns and outer suburbs. In the labs of our best research institutes and scientists. It will be won in our energy sector. In our industrial sector. In our ag sector. In our manufacturing sector. That’s how you get to net zero.

It would appear that his first step on this journey is to make a token investment in ‘clean’ energy by way of $539 million in funding for new projects involving hydrogen product and capture & storage, which will apparently be fuelled by both black and brown coal – thereby increasing the amount of greenhouse gas emissions Australia releases into the atmosphere.

This folly was pointed out by ABC News on 21 April 2021:

Getting hydrogen into a pure, useable form takes a lot of energy and this process can produce a lot of emissions.

And so, that is why experts talk about different types of hydrogen — brown, black, grey, blue and green.

Only "green" hydrogen is produced entirely through renewable power and has zero emissions. The others use electricity made by coal (black or brown) or gas (grey), sometimes with carbon capture and storage (blue).

The Government call its hydrogen plans "clean" — a combination of hydrogen from gas and renewables.

The Climate Council says the term is "misleading" for average Australians.

Its website states: "Proponents of fossil-fuelled hydrogen have used this to describe fossil fuel hydrogen linked to carbon capture and storage, as well as renewably sourced hydrogen."

"Only the variety of hydrogen generated with renewables … belongs in our zero emissions future."….

The government insists real progress is being made on CCS technology.

However, many climate scientists believe, when it comes to fossil-fuel energy production, CCS is not a serious alternative to wind and solar power.

Some, like the Climate Council, see it as an attempt to prolong the use of fossil fuels.

"The Gorgon CCS trial has been a big, expensive failure. It is capturing less than half the emissions needed to make CCS viable," the Climate Council's website states.

"CCS is extremely expensive and cannot deliver zero emissions."

"There are still no successful projects operating anywhere in the world."

While The Guardian on April 2021 published these telling quotes:

Harry Guinness, a former Liberal adviser and chief executive of the centre-right thinktank the Blueprint Institute, said the US was planning to spend about 35 times what Australia allocated in the last federal budget on green stimulus, and the government would need to commit to serious finance if Australia was to make a transition to net zero by 2050 as Scott Morrison has said is his preference…..

“Our friends and allies are going to want to see tangible commitments. They’ve been quite clear about that, it’s no mystery,” Guinness said. “If we are in the game of bringing technologies down the cost curve we need finance and incentives, including pricing carbon. Actions speak louder than words.”

Tony Wood, the Grattan Institute’s energy program director, said there was little detail in what the government had announced on Wednesday, making it hard to assess, but that Australia was spending significantly less on hydrogen than some other countries.

He said Australia was also offering support for hydrogen made with fossil fuels where others were backing “green hydrogen” made with renewable energy only.

“I don’t see any evidence that Australia has developed positions that are leading the world,” he said…..

Announcing the funding on Wednesday, Morrison said hydrogen was “zero emissions gas”.

The Greens said as the government planned to support hydrogen made with fossil fuels as well as renewable energy its commitment was “just more cash for coal and gas”. The party’s leader, Adam Bandt, said it paled next to multibillio-dollar green hydrogen commitments by other countries including South Korea, Germany, Spain, France, Japan and Saudi Arabia.

“This government’s obsession with coal and gas is about to cost Australia as other countries invest heavily in green hydrogen, giving them the edge as future markets open up,” Bandt said. “With all our wind and sunshine, this is Australia’s competitive advantage to seize, but it is being lost.”…..

Richie Merzian, the Australia Institute’s climate and energy program director, said it appeared the government was “once again using climate action to support fossil fuel companies”. He said that under current commitments it was possible by 2030 the US would have halved its emissions and the UK cut its emissions by two-thirds but Australia was sitting on a 26% cut while still subsidising fossil fuels…..

I was talking to a public servant climate policy in his portfolio the other day who said 'at least when we were in enviro (dept) we felt like climate policy might relate vaguely to the environment. Now we're just the department for coal and gas. No ones even pretending anymore '

— Polly Hemming (@pollyjhemming) April 21, 2021

Morrison must think the Australian electorate and every OECD government around the world are so monumentally stupid as to not realise that these announcements (and their lack of detail, fuzzy timelines or no guaranteed funding) are solely for the benefit of US President Joe Biden 's two-day virtual Leaders Summit which began on 22 April 2021, with a weather eye out for the twelve-day UN Climate Change Conference (COP 26) to be held in Glasgow during November 2021.

By the time all his half-promises and evasions concerning zero emissions have failed to meet the 2050 target date, Scott Morrison will be 81 years of age and I will be long dead - having lived all my life in a country which only genuinely attempted to reduce greenhouse gas emissions for six short years between June 2007 to September 2013.

How the Organisation for Economic Co-operation and Development (OECD) sees Australia's national pension scheme

 

It would appear that the Australian Government national old age pension scheme is managing to tread water when in comes to international comparison - predominately because its cash transfers are set roughly on par with the official poverty line adopted by this country and therefore on paper no-one is falling post-retirement into abject poverty.

However, with an ongoing acute shortage of affordable housing/ social housing stock, a large cohort of women bringing little or no superannuation into their retirement and successive federal governments which have failed to introduce and fully fund health and wellbeing support systems for Australian as they enter old age, the national age pension scheme appears to be failing a great many people.

OECD Pensions at a glance 2019, 27 November 2019:

OECD’s biennial report on the pension systems across OECD and G20 countries. Each edition opens with an overview comparing pension policies of OECD countries and recent reforms. This is followed by at least one thematic chapter and a range of indicators including pension projections for today’s workers.

The 2019 edition; reviews and analyses the pension measures legislated in OECD countries between September 2017 and September 2019. As in past editions, a comprehensive selection of pension policy indicators is included for all OECD and G20 countries. Moreover, this edition provides an in depth review of different approaches to organising pensions for non-standard workers…..

How does AUSTRALIA compare?

Key findings

 While contributing to superannuation funds is nearly universal among employees, only 27% of the self-employed made contributions in 2016-17.

 Full career self-employed workers will have a pension equivalent to 90% of that of full career employees despite not having made any pension contributions.

 Relative incomes of those aged over 65 to the total population are low at 72% compared to the average of 87%, while poverty rates for the elderly are very high in Australia at 23%, ten percentage points above the average. As Superannuation funds can be taken as a lump sum, this might skew these figures.

 Replacement rates in Australia are lower than the OECD average. The future net replacement rate for a full-career male (female) average-wage earner is 41% (37%) compared to 59% (58%) for the OECD. With the relatively high value of the Age Pension this improves to 76% (72%) or low earners compared to the average of 68% (68%).

 Five-year breaks in the career for childcare or unemployment lower future replacement rates by 12%, much higher than the OECD average of 4% and 6%, respectively…..

Excerpts from the 2019 document:

Employees are automatically enrolled in theSuperannuation system, although they are not compelled to make any contributions as the base scheme is entirely financed from employer contributions, whilst additional voluntary contributions can be made by employees. The self-employed are thus only covered by voluntary contributions and there is no requirement for them to contribute to the Superannuation scheme.

With near universal coverage of employees the Superannuation scheme has shown its effectiveness in providing a savings mechanism but with no compulsion for the self-employed to enrol their participation rate is much lower, at only 27% in 2016-17.

As a result, the self-employed tend to be solely reliant on the Age Pension, giving them a lower replacement rate at retirement compared to employees……

The average income of current retirees is only 72% of the population figure for the over 65s. There is also considerable variation by age with the 66-75 years age group at 78% compared to only 64% for those aged 76 and over. This age profile partly reflects the building-up of the impact of the Superannuation system, which was only introduced in 1992: those aged over 75 today would have had only limited opportunities to contribute….

Australia is ageing more slowly than the OECD average. Given the relatively limited involvement of the government in pensions and the slower ageing process, there is less of an issue of public finance pressure than in many other OECD countries. Public expenditure on pensions is projected to remain well below half of that of the OECD average. The Superannuation system being defined contribution is not subject to financial sustainability issues and as it will reach full maturity fewer individuals will be reliant on the Age Pension safety-net.

Future net replacement rates for average-wage earners in Australia are low at 41% compared to 59% for the OECD on average. The situation is however much better for lower earners with a net replacement rate of 76%, compared to 68% on average for the OECD, as the Age Pension provides an effective safety net for this group. However, individuals who are taking the  Superannuation component as a lump sum are then able to spend it as they wish. Once the funds start to deplete they can also then become eligible for at least a partial payment from the Age Pension….

In Australia, the impact on pension entitlement of interrupted careers is mixed depending on the absence period. There are no credits for either unemployment or childcare absence within the Superannuation system, unlike most other OECD countries, where in addition childcare absences usually have a lower impact on future pension entitlements than unemployment. For five years out of the labour market the pension entitlement in Australia for an average-wage earner is reduced by 12% compared to 6% on average in the OECD for unemployment and only 4% for childcare.….

The projected working-age population (20-64) will decrease by 10% in the OECD on average by 2060, i.e. by 0.26% per year. It will fall by….. more than 20% in Australia….

Mandatory pension contribution rates differ widely among OECD countries….Contribution rates are the lowest, below 10%, in Australia, Canada, Korea, Lithuania and Mexico.

Recent Pension Reforms

JULY 2018

From July 2018, members with total superannuation balances below AUD 500,000 are allowed to carry forward unused concessional (before tax) contribution-limit amounts for up to 5 years. From July 2019, members can access the unused contribution.

JULY 2019

Superannuation funds have to cancel supplemental life and disability insurance coverage for accounts with 16 consecutive months of inactivity unless participants actively choose to maintain the coverage.

The law caps the total annual administrative fees superannuation funds can charge accounts with balances below AUD 6,000 at 3% of the year-end balance. (Previously, there was no fee cap.) The law also prohibits superannuation funds from charging exit fees when accounts with any balance amount are transferred to other providers.

From July 2019, the Pension Loans Scheme (a voluntary, reverse mortgage type loan providing a fortnightly income stream) was expanded to all Australians who reached the normal retirement age with securable real estate/assets owned in Australia. The maximum fortnightly payment (pension plus loan) also increased from 100% to 150% of the fortnightly maximum rate of pension.

Superannuation funds have to transfer accounts with balances below AUD 6,000 to the Australian Taxation Office (ATO) after 16 consecutive months of inactivity. Within 28 days of receiving an inactive account, ATO will combine it with an active account belonging to the same participant if such an account exists and the combined balance would be at least AUD 6,000. If the account cannot be combined, ATO will continue to hold it until it can be combined or issue a lump-sum payment to the participant if he or she is aged 65 or older or the account balance is less than AUD 200.

How the Organisation for Economic Co-operation and Development (OECD) sees Australia in 2019

Organisation for Economic Co-operation and Development, OECD Economics Department Working Papers No. 1539, 14 February 2019, excerpts: 

This paper analyses relative income poverty in Australia of individuals aged 15 or more, based on the HILDA Survey data. 

Australia has above-average poverty rates among OECD countries, but poverty has decreased in the last 15 years. 

Certain groups are more at risk than others. 

People living alone and lone parents are at higher risk of poverty. 

Old people in Australia have a more than 30% chance of living in poverty, which is one of the highest in the OECD. Among those of working age, being employed significantly reduces the risk, while those out of the labour force and the unemployed are at much higher risk of poverty. 

Nevertheless, there is poverty also among people that work, typically casual workers and part-time workers. People with low education are also at risk. 

Those living alone and one parent households face quite a high risk of poverty, even if they are employed. Indigenous Australians are almost twice as likely to be poor than the rest of Australians and they appear significantly poorer than the rest even after controlling for education, age, industry, skill and geographical remoteness, suggesting a range of socio-economic issues, including poor health and discrimination.

16. Women are at a higher risk of living in poverty compared to men (Figure 7), although the risk of poverty has been reduced for both groups over the last 15 years and more rapidly for women. In FY 2015/16, 20% of women lived below the 60% poverty line, and 13% below the 50% line. For men, the shares were 17% and 11%, respectively. 

17. Consider now the risk of poverty by age, shown in Figure 8. It is striking that the age group with by far the highest risk of poverty are the elderly. Prior to 2010 around 40% of individuals of age 65 and above were living in a household with disposable income below 50% of the median. This has since been reduced to 30%, but it nevertheless remains a high figure. For the 60% poverty line, more than half of the elderly lived in poverty until around 2010, with a declining trend to 44% in 2016. The poverty among the elderly in Australia is also very high in international comparison (Figure 9), according to the OECD Income distribution and poverty database. 

18. Very high poverty and social exclusion of the elderly are also reported for Australia in ACOSS (2014 and 2016) and Azpitarte and Bowman (2015). It is noteworthy that ACOSS (2016 and 2014) report similar overall poverty rates as in our data, however, variation across age according to their analysis is somewhat different, driven by the fact that they take into account housing costs. While for older people they still report the highest rate of poverty (except compared to the poverty rate of children below the age 15, which are excluded from our analysis), the difference with the rest of the population is less pronounced. As many older people own their houses and have repaid their mortgages, this provides significant protection against poverty (ACOSS, 2016). Moreover, many pensioners decide to take a significant amount of their pensions (superannuation) as a lump sum at the onset of their retirement, which thereafter does not count as current income and cannot be factored into HILDA measures of income poverty. 

23. We now turn to relative poverty across labour force status. As can be seen from Figure 12, full-time employed individuals have the lowest poverty rates. People employed part-time are about three times as likely to live in poverty as compared to the full-time employed. The unemployed have even higher rates of poverty, about 15% in FY 2015-16, although the rate is quite volatile over time. The highest poverty however is experienced by those not in the labour force, especially the elderly, as we already discussed above. The group “not in labour force of working age” includes students, parents not working, those who otherwise cannot or are unwilling to work. For all groups we can observe a trend reduction in poverty rates over the 15-year period, except for the part-time employed group. 

24. While concern often focuses on groups that exhibit highest incidence of poverty such as the unemployed or those out of the labour force, we should not overlook those who work, even full-time, but still end up being poor. Moreover, it is important to keep in mind that employed individuals represent the biggest group, therefore there is actually a higher number of poor among the full-time employed, compared to the poor employed part-time or the unemployed. 

29. People born in Australia have the lowest probability of living in poverty (Figure 18), followed by immigrants with English speaking background and then the rest. The gap has been closing, in particular over the last couple of years. Indigenous Australians, on the other hand, are almost twice as likely to be poor than the rest of Australians (Figure 19), and recently the gap appears to be widening. Due to limited sample size the poverty rate of indigenous people is quite erratic, therefore the data need to be interpreted with caution.

Full working paper can be accessed at https://www.oecd-ilibrary.org/docserver/322390bf-en.pdf