Cold showers for unprincipled Labor


Solar hot waterGiven the events of the past few weeks, most people could forgive Julia Gillard for wanting to stay out of hot water entirely. But instead the Government has been roundly criticised for its announcement last week that its solar hot water rebate scheme would come to an end — effective immediately.

Australia's solar hot water system manufacturers expressed shock and dismay at the abrupt decision, while the Opposition and the Greens were united in their criticisms of the Government's handling of the scheme. Greens Senator Christine Milne lamented: 'It is not good governance. It is ad hoc. It's poor planning. And it's undermining the jobs of the future.'

She was echoed by Shadow Minister for Climate Change Greg Hunt: 'Nobody could prepare. That's not responsible management. They did it with home insulation. They did it with Green Loans. They did it with Green Start. They did it with solar panels. And now they've done it to the solar hot water sector.'

To be fair, if it were up to the current Opposition (Malcolm Turnbull and Direct Action Plans notwithstanding) the solar hot water rebate scheme might never have started; and if it were up to the Greens, it might never have finished.

Even so, the criticisms from both parties ring true: lest we forget the mistakes of the past, Labor's fresh start had, within a day, been tarnished by a move guaranteed to upset everyone involved, in the name of nothing more than an arbitrary budget surplus deadline.

For those whose primary concern is the environmental benefit of schemes like the solar hot water rebate, the abrupt ending of the scheme in aid of a budget surplus can only imply that Labor's commitment to renewable energy is flexible at best.

For those most worried about economic management, the closure of the rebate scheme without warning to consumers, manufacturers and installers likewise suggests the Government cares more about the appearance of economic rectitude than the reality of sound management skills belied by this clumsy move.

The worst part is that the Government must surely have anticipated the strong negative response to the announcement, yet chose to go ahead anyway. Does this suggest steely determination, aloof arrogance, or sheer desperation?

Only time will tell whether the money gained from the early closure of the scheme will be worth the public disappointment, mistrust, and perceived mismanagement in this minor debacle.

If the Government had made its decision for the sake of some noble goal, the public might forgive the lost opportunities and damage to business. But if it's simply to claw back as much money as possible toward the promised surplus (a promise that must now be kept for the sake of Labor's economic reputation), this is robbing Peter to pay Paul.

Not only in budget terms, but also in terms of Labor's public image. This all serves to reinforce the impression that Labor has lost its principles.

A principled environmentalist might keep the subsidies going despite the economic costs. A principled free-marketeer might drop all subsidies, and let renewable energy technology prove its own worth in the market. There is room between for a response that balances environmental concerns against economic ones, but what kind of principle lies behind a decision to wrong-foot a whole industry naively trusting in a 30 June deadline for the end of Government support?

At the very least, we might hope that a principled Government would keep its word on matters like the expected end-date of a rebate scheme. Failing that, it would strive to do right by the industries and employers who had accepted the Government's initial plans in good faith, only to discover that: 'This government makes investment decisions very risky.'

In the grand scheme of things, this is not a big deal. But even minor issues contribute to the impression that this is a Government without firm principles to guide its day-to-day behaviour, let alone its direction for the nation.

Zac AlstinZac Alstin is a freelance writer and part-time research officer for Southern Cross Bioethics Institute in Adelaide. He has an honours degree  in philosophy, a graduate certificate in applied linguistics, and an amateur interest in Chinese philosophy. 

Topic tags: Zac Alsin, solar hot water rebate scheme, Greens, Labor leadership



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Existing comments

Excellent article. Really gets to the nitty gritty of Labor's problems and the way they are perceived by the electorate.
Pam Tobin | 06 March 2012

A well-argued piece reminding us that the Coalition doesn't need to win the next election. The present Labor government seems to never miss an opportunity to put a few more nails in its own coffin. In quick succession with the leadership spill - not Gillard's fault but caused by the over-optimistic Rudd camp refusing to recognise reality; Carr for the Senate - leaks, denials and final declaration; and now premature cessation of an alternative energy rebate. The next fifteen to eighteen months had better be good!
Ian Fraser | 06 March 2012

I'm not sure where you sourced the diagram, but that's not how solar systems work in Australia.
Ginger Meggs | 06 March 2012

The political analysis here is probably correct - but then I read the details of what has been stopped a little early. I benefited from the scheme 7 years ago, receiving a grant which reduced our costs for a 1KW PV system to $8000 - a big slug, but we wanted to invest in the future. Now I am asked to be shocked because a $1000 grant has been axed which would reduce the cost of a 1.5KW system to less than $3000! I think something is out of proportion in the reaction of the industry, whose clearly growing efficiency is now putting solar in reach of all homes built. Which makes me ask: is anyone suggesting that the Building Code require solar hot water (we have a latent heat system which works wonderfully, and was just a changeover to the existing electrical cylinder on the ground) and a minimum 2K PV energy system?
Charles Sherlock | 06 March 2012

There is one major problem with this article-its premise that the termination of the rebate was effective as of the day of the announcement. If one goes to the website of the Commonwealth Department of Sustainability,etc, the Ministerial press statement clearly says that the rebate will cease as from 30th June 2012! When watching the ABC program, 7:30 Report late last week (Thursday I think!) The solar industry representatives acknowledged that the rebate was scheduled to finish on 30 June 2012 when established by the Howard Govt. 6 years ago. Their complaint was that they had expected an extension to be granted. It is important to check official sources before launching into an attack irrespective of the colour of the government in question or the nature of the policy decision else misinformation gains a wider coverage & acceptance than it should!
Graham Holmes | 06 March 2012

Hi Graham, As the Dept. of Climate Change and Energy Efficiency website states: "In line with the announcement on 28 February 2012, to be eligible for the REBS Solar Hot Water rebate, your system must have been installed, purchased or ordered (and a deposit paid) up to 28 February 2012." The 30th June cut-off means that all applications for systems either installed or awaiting installation with deposit paid *by Feb 28th* must be submitted by June 30th. So while one could technically argue that the rebate scheme continues til June 30th, no one can now access it who had not already ordered a system and paid their deposit by the surprise deadline of Feb 28th.
Zac | 06 March 2012

The unedifying spectacle of a Labor Government aspiring to a budget surplus ahead of socially and environmentally progressive policy direction is symptomatic of its continued "lurch to the right". The Gillard Government seems determined to undermine its own essential carbon pricing agenda, and the conservative opposition have nothing more to offer than a business-as-usual capitulation to rapacious corporate interests to the detriment of the national interest. It's time to vote Green.
Michelle Goldsmith | 06 March 2012

Good piece, Zac. Although the problem is Labor's for this snap decision, it could equally apply the the Libs in different circumstances. Assuming the coalition wins the next federal election I imagine that their own razor gang will be looking to do similar slash-and-burn moves under the plausible cover of reigning in Labor's profligacy.
Paul Russell | 06 March 2012

I am over hearing about the complaints re this scheme. In TV adverts the week prior to its cancellation, the date was clearly pointed out when solar costs would rise on installation. I wish you and others would check the facts!
folkie | 06 March 2012

I accept your explanation. However I would add that your piece implied that there would be no more moneys paid under the scheme forthwith. Whilst it may seem a technical point there will still be considerable expenditure involved & I would expect that there will be some "backdating" of applications and deposits "received" but not deposited by suppliers of the services.Whilst I appreciate that such an announcement might seem arbitrary,& it is, governments frequently close off applications for programs in such a manner in order to prevent a campaign to encourage applications by the subsidised providers of the service. Another alternative is to allow applications up to the closing date ,say June 30th & later decide that the budget allocation has been fully utilised and leave a host of applicants, who have incurred the capital expense,in the situation of not getting the subsidy. It is simply a means to curtail demands on the public purse.I would suggest that similar situations arise almost continuously across many streams of government expenditure, be it local, state or commonwealth.
Graham Holmes | 06 March 2012

From where comes this assumption that the Libs will be worse? If you really want to know how Tony will fix it, it's all in his book "Battlelines". It's a bit like the Catechism of the Catholic Church. Everyone assumes they know what's in it without actually reading it!
Ian | 06 March 2012

The problem with all these little schemes though is that the money could have built half a dozen major LNG power plants instead of subsidising the wealthy and charging the poor. All these silly schemes do is raise the electricity prices for the poor.
Marilyn Shepherd | 06 March 2012

Hi Folkie, I checked my facts, but they still say the same thing. According to the gov's climate change website: "In line with the announcement on 28 February 2012, to be eligible for the REBS Solar Hot Water rebate, your system must have been installed, purchased or ordered (and a deposit paid) up to 28 February 2012." So are you saying that the government was running ads about its 28th February announcement a week before the announcement itself?
Zac | 06 March 2012

Thanks Graham. I'm not convinced by the argument that it is good practice to cut off a rebate scheme without notice as the goverment did. But more importantly, it doesn't appear to have convinced the public or industry, judging by the media reaction. For the purposes of my article, I have to accept the reaction at face value. The government may feel justified in its course of action, but clearly this feeling is not shared by many other interested parties.
Zac | 07 March 2012

Has our government lost its way? Who indeed are we to say? But soon there'll be the devil to pay So tell us what comes after.
Claude Rigney | 07 March 2012


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