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John Passant

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January 2010



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My interview Razor Sharp 18 February
Me interviewed by Sharon Firebrace on Razor Sharp on Tuesday 18 February. (0)

My interview Razor Sharp 11 February 2014
Me interviewed by Sharon Firebrace on Razor Sharp this morning. The Royal Commission, car industry and age of entitlement get a lot of the coverage. (0)

Razor Sharp 4 February 2014
Me on 4 February 2014 on Razor Sharp with Sharon Firebrace. (0)

Time for a House Un-Australian Activities Committee?
Tony Abbott thinks the Australian Broadcasting Corporation is Un-Australian. I am looking forward to his government setting up the House Un-Australian Activities Committee. (1)

Make Gina Rinehart work for her dole

Sick kids and paying upfront


Save Medicare

Demonstrate in defence of Medicare at Sydney Town Hall 1 pm Saturday 4 January (0)

Me on Razor Sharp this morning
Me interviewed by Sharon Firebrace this morning for Razor Sharp. It happens every Tuesday. (0)

I am not surprised
I think we are being unfair to this Abbott ‘no surprises’ Government. I am not surprised. (0)

Send Barnaby to Indonesia
It is a pity that Barnaby Joyce, a man of tact, diplomacy, nuance and subtlety, isn’t going to Indonesia to fix things up. I know I am disappointed that Barnaby is missing out on this great opportunity, and I am sure the Indonesians feel the same way. [Sarcasm alert.] (0)



Solar panels and inequity

Subsidies for individual solar panel electricity generation are a dumb idea. High feed in tariffs actually impose a burden on poor and working class electricity users and benefit those well enough off to pay $23,000 or thereabouts for solar panels on their roofs. 

In addition the Rudd Labor Government’s former rebate scheme reimbursed the solar panel owners up to $8000 for their initial set up costs.

The State and Territory Governments in Australia are rushing to purchase electricity generated from these solar panels at exorbitant rates.

In Canberra the rate for example is about four times the normal purchase price.

These feed in tariffs encourages the well off to invest in solar panels. Surely that is a good thing?

Not really. Who pays for this subsidy? 

In Canberra, and other States, it will be electricity consumers through higher prices.  No matter how much compensation is given to poor consumers it won’t address the price increase needed to pay the well off four times the normal rate  for the electricity their panels generate.

And for the vast majority of middle income earners, there will be no compensation for the price increase to cover the subsidy. 

This largesse for the well off comes at a time when the ACT Labor Government is trying to limit their own public servants to a 1.5 percent pay increase.  The increased electricity charges alone will most likely eat up that pitiful amount.

Not only does the subsidised electricity purchase price make the poor and working class pay for climate change rather than the polluters, it individualises the response to climate change.

It is  based on the idea that consumption, not production, is the problem and that individual electricity producers can be part of the solution.  Yet solar panels on our roofs are inefficient compared to large scale solar farms.

Governments serious about addressing climate change would re-direct the subsidy, plus much more money, into large scale renewable energy now – solar, wind, tidal, geothermal.

They don’t do that in any significant way because, despite all the protestations to the contrary, neoliberalism and the ideology of the market have captured them.

The subsidised price for solar panel electricity is but the flip side of that other market subsidy system, the Rudd Labor Government’s Carbon Pollution Reduction Scheme.  The CPRS gives billions in subsidies to the polluters.

The tax system can sometimes be some sort of mechanism for income redistribution under capitalism (although it doesn’t address the fundamental inequity – the fact that workers create wealth and the bosses expropriate it.)

Thus a carbon tax on the polluters, with rigorous price controls to prevent price increases based on the impact of the tax, could be one component of action to address climate change. The revenue could fund a visionary and realistic renewable energy program.

Of course that won’t happen because it is a direct attack on the profits of the polluters, something neither Labor nor the Liberals are prepared to do.  In their world view profit is sacrosanct.

So how does our income tax system in all its equitable magnificence treat the payments for solar panel generated income?  Here surely is some sort of claw back of the massive benefits going to those who can afford solar panels on their roofs.

As a former tax officer, any payment immediately raises my interest.

Such payment is in my view clearly income.  You invest $23,000 and get a guaranteed price over the next 20 years in the ACT, a price which when paid for electricity your panels generate is income. 

It’s a bit like buying a rental property or plonking the money in the bank. The rent or interest are income. So too are the returns on your solar panel investment. They should be taxed accordingly.

Yet in some private rulings the Australian Tax Office has evidently said that because the solar panel owner has not intention to make a profit the receipt is not income.

This is wrong.  Intention is irrelevant in income from property. 

Otherwise rental income wouldn’t be taxable and most importantly negative gearing (where the interest and other costs outweigh the rent and so produce a tax loss) wouldn’t be allowed.

At the moment well off solar panel owners are getting benefits from two sources – a subsidy from State and Territory governments paid for by working Australians and the non-taxation of those benefits through incorrect administrative practice by the ATO. (I’ll leave aside possible capital gains tax concessions.)

The States and Territories will continue their high feed in tariff practices. The ATO however can change its incorrect administrative practices and tax the solar panel electricity payments.

Whatever happens, you can be sure the bosses and their governments will try to force the working class to pay for their pollution system.

Readers might also like to look at Stop work to stop the bosses’ war on the environment.



Comment from Dave Bath
Time January 17, 2010 at 7:54 pm

While for owner-occupiers there would be some incentive of a decent pricing structure for net electricity fed back into the grid (Germany has a achieved a lot here), it may be justifiable to subsidize installation of solar panels by landlords, which would decrease the net energy expenses of renters, providing those solar panels were large and efficient enough to make a reasonable difference to the energy costs of renters.

Similar considerations would apply to energy/water efficiency improvements to rental accomodation.

Comment from John
Time January 17, 2010 at 8:54 pm

Dave, the ACT scheme is based on payments for the gross amount of electricity generated, not the nett amount after substracting consumption.

I understand the NSW scheme from 1 January is similar. Net schemes put pressure on consumers, reinforcing the idea that CO2 emissions are their fault. They are also less effective in promoting panel use.

In any event, I would have thought a solar panel or panels gives the landlord the opportunity to increase the rent and recoup the capital costs and possibly the net benefit flowing to tenants.

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Comment from Auntie Rhoberta
Time January 18, 2010 at 7:29 am

One small point — solar farms are only one ‘efficient’ alternative; the state might also supply solar panels (or maybe passive solar retrofits) for individual buildings (domestic, industrial, commercial or whatever), planned & funded centrally.

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Comment from Michael Cranny
Time January 18, 2010 at 12:00 pm

Blacktown City in Western Sydney has had a high take up of Solar Panels by the City battlers. Lower income households have been quick to realise the benefit of a gross feed in tarrif will largely eliminate the huge price hikes planned for electricity charges in 2010.

Solar panel technology is moving ahead very fast thanks to the support for the industry, producing better cost benefit for government and allowing less generous subsidy support in future.

Of course massive support is also required for geothermal, solar thermal and wind to give a kick start up to achieve a national replacement of coal generation.

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Comment from makofski
Time January 18, 2010 at 6:40 pm

Some issues are bigger than Marxist ideology – climate change is certainly one. If every home roof was in fact its own little power station (and there are a lot of roofs in Australia absorbing a lot of rays from the sun) we would be well on the way to reducing carbon emissions. As far as who pays? Ultimately we will all pay if climate change makes life less sustainable and more costly in every respect. I suggest that a wider view is the only view. We need every available solar generator – small and large. And of course roof top solar panels are empowering – rather than relying on government we can all make a contribution.

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