There is a reason Labor has been so susceptible to the siren song from the Greens. It is the same reason the party has been gripped by leadership contortions and finds itself flatlining in the death zone in opinion polls. The government has failed to outline a plausible policy agenda.
Labor either does not comprehend its mission, can't explain it, or both. In order to differentiate itself from the Greens it needs to offer more than rhetorical flourishes about loopy extremism. Labor needs to offer a policy prescription that shows voters it has a plan to generate prosperity.
The ALP's uncertainty about itself has been highlighted by its national secretariat launching an online survey of members to find out what policies they like and want. This is neither here nor there because the policy agenda has been staring them in the face for years.
As prime minister in January 2010, Kevin Rudd identified the productivity challenge and we encouraged the initiative. But along with Mr Rudd, the productivity agenda seems to have been discarded. Which is why the independent intercessions by former BHP chairman Don Argus and Treasury economist David Gruen are so welcome.
Mr Argus laments a lack of "political leadership and courage" as serious economic and social challenges are confronted by "sloganeering politics" that is doing taxpayers a disservice. His main arguments will be familiar to readers of The Australian.
This eminent businessman explains Australia's good fortune in experiencing record terms of trade when the GFC hit, and he warns about our lack of preparedness for the repercussions when those terms of trade fall. He is concerned about high levels of household debt and rising levels of government debt.
"Instead of looking at what extra taxes can be levied, we need more debate about how we can get the cost side of our public finances down," Mr Argus says. He explains the debate must include discussion about an entrenched welfare mentality.
Importantly, Mr Argus argues that productivity is the key to our economic future and he criticises the impact of government policies: "The carbon tax and workplace relations system are productivity hindering, not productivity enhancing."
This productivity focus has been supported in a separate speech by Dr Gruen, who also warns about the impact of waning terms of trade and the need to boost efficiency to maintain our prosperity. He prods the private sector to take up the challenge, saying it is companies themselves who need to be innovative to boost output.
And, saliently, he warns that in periods of adjustment some firms will fail. So there is an unspoken lesson in this for the government to resist endless subsidies to protect inefficient industries. We need to accept that over time the least efficient companies could close, and ideally their staff and resources will migrate to more productive opportunities.
Nothing should be more important to the government than confronting these challenges. And nothing could be more relevant to Labor's core purpose or its mainstream constituents. Yet on these issues, it seems to be silent.
Throwing money to the wind
The Productivity Commission, the Institute of Public Affairs and others have warned that the economics of the RET wilt under cost-benefit analysis, with the price of wind and solar power vastly outstripping that of coal-generated electricity. Such reports might have escaped the attention of consumers.
But they will take notice of the news that the NSW Independent Pricing and Regulatory Tribunal expects that green schemes will add $316 a year to the average power bill, with the carbon tax to contribute $168 and the RET and other schemes to contribute $148.
As Origin Energy chief Grant King has warned, renewable energy could add more to power bills than the carbon tax by 2020 as solar roof-top panels boom and demand for grid-based power from coal- and gas-fired electricity falls.
Poorer families would bear the brunt of the investment in transmission networks as wealthier households reaped generous subsidies for investing in solar panels.
As well as driving up power prices, the flaw of the mandatory RET is that in "picking winners" among high-cost technologies it distorts the market and diverts investment from other lower-emission energy sources. In advising government, the Climate Change Authority must take a hard, unbiased look at such anomalies in its review of the RET.
The fact that the so-called sustainable RET policy is unsustainable economically is beyond the grasp of the Greens, who want an even higher target than 20 per cent by 2020. For the government, the program means ongoing anger from voters as power bills continue to soar. But scaling back the RET would involve a major showdown with the Greens.
Tony Abbott, who is opposed to pricing carbon, has an even greater problem with the RET. His "direct action" policy advocates spending $100 million a year for an additional one million solar energy homes by 2020 and promoting larger-scale renewable energy generation with incentives through the RET. On the evidence, governments "picking winners" results in taxpayers losing.
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