New Labor?

At the time of writing, ballot papers in the recent Australian Federal Election are still being counted. Although it is clear that the Australian Labor Party (ALP) has secured more seats in the House of Representatives than any other party, and its leader, Anthony Albanese has already been sworn in as the new Prime Minister, the ALP is yet to establish an overall Parliamentary majority – although it is highly likely they will.

While the final results are still to be tallied, it’s fair to say that this Election has been like no other, and the ALP will need to find a new style of Government, given the following facts:

  • Albanese is only the fourth Labor leader since WWII to lead the ALP to Government from Opposition – given the fixed three-year terms of Australian Parliaments, this is an achievement in itself;
  • The ALP secured less than 33% of the national primary vote (compared to the outgoing LNP Government’s 36%); this means nearly one-third of first preference votes were divided between the Greens, Independents, and other minor parties, and in theory breaks the two-party stranglehold on Federal politics;
  • The two-party preferred tally shows a remarkable similarity to the Brexit Vote: ALP 51.7% vs LNP 48.3% (Brexit: Leave 51.9% vs Remain 48.1%) – which might suggest a less than an overwhelming mandate for the ALP;
  • Candidates for the so-called “Teal Independents” secured more new seats than perhaps even they expected, and will form the largest group on the expanded cross-bench;
  • The Greens won three new seats, all in Queensland, which is surprising given the party’s stand on the mining, coal and gas industries;
  • Although Katter’s Australian Party retained its solitary member in the House of Representatives, neither of the other Queensland-based, right-wing parties (One Nation and the United Australia Party) picked up any lower house seats.

These election results have also highlighted (even exacerbated?) the differences that exist between regional, metropolitan, and suburban areas (both within each State and nationally) that represent significant fault lines across the Federal electorate.

Even if the ALP manages to secure a majority in the House of Representatives, the incoming Prime Minister has acknowledged the need to engage more with the cross-bench than previous administrations – in particular on climate policy and the establishment of a Federal independent commission against corruption. (And in the Senate, the ALP will likely be reliant upon the Greens to pass legislation.)

On climate policy, the main debate is on achieving lower targets for carbon emissions, how to do it, how soon, and at what cost. The biggest challenge will be on transitioning the mining, coal and gas industries (especially in Queensland and Western Australia), and on tackling the heavy polluters (in particular, energy generation, construction and agriculture). Given that both Queensland and Western Australia are under Labor Governments, and that these industries are heavily unionized compared to most other sectors of the economy, perhaps the Prime Minister will find it comparatively easy to sell his Government’s policies – but bringing the rest of the population with him will be key, and there needs to be a clearer path to decarbonizing the economy, including incentives for change.

Regarding a Federal anti-corruption body, the challenge will be to draw up practical and consistent terms of reference (especially given that such bodies already exist in some form or other at State level). For example, in addition to elected representatives and civil servants, should a new Commission have oversight of political parties, charities, unions, non-for-profits, industry associations, professional sporting codes, non-government bodies and anyone else that receives any sort of public funding? And what about whistle-blower protections and the public’s right to submit a complaint or other matter for investigation? How will it deal with freedom of information requests that appear to be denied on political grounds, or manage the transaction of investigations that may involve multiple parties? And should such a body have oversight of truth in political advertising or deliberate misinformation campaigns by those running for public office?

A glaring omission from the Federal election campaign was any meaningful debate on the need for structural economic reforms. Many of the published policies were heavy on how much funding would be allocated to favoured industries and pet projects, but they were very light on evaluating expected outcomes or measuring the quality of results. The only financial topics to get regularly aired were wage growth, inflation, interest rates, and incentives for first-time home buyers – all of which may be important, but they are largely “more of the same” that we have seen for the past 20 years of tax-based tinkering. Not since the introduction of GST (sales tax) in 2000 have we seen any significant policy implementation, and certainly nothing like the major economic reforms introduced by the Hawke/Keating administration. To be fair to the Greens, they did advocate new taxes to fund some of their carbon-related policies (including nationalising part of the renewable energy sector) but I don’t recall seeing a specific cost analysis or balance sheet on how they would achieve their goals. There are also tensions emerging between the need to bolster wage growth (off the back of improved productivity, which hopefully includes removing archaic restrictive practices and encouraging further competition?) and the need to address growing skills shortage (to be partly offset by increased immigration, without risking wage deflation?). Any discussion of the economy must also recognise the realities of the changing work environment, including new technology, remote working, casual employment and the need to encourage innovation and sustain the small business and start-up ecosystem.

Finally, if the Prime Minister is going to be successful in selling his vision of “New Labor” (my term) then he will need to:

  • ensure that the ALP does not again disintegrate into factional party warfare and rolling incumbent leaders that plagued the previous Labor administration (and which was adopted with equal gusto by the outgoing Coalition);
  • steer a renewed path to economic modernisation begun by his predecessors in the 1980s and 1990s;
  • embrace new technology and change the way public sector IT procurement is conducted;
  • acknowledge that the Government (featuring, as ever, so many career politicians who lack direct experience of working in industry or running commercial businesses) doesn’t know all the answers – but they know how and where to find them;

And while it’s not the Prime Minister’s job to actually “hold the hose”, he does need to make sure those who do are competent to do so, and that he and his Government will hold themselves, their appointees and their representatives directly accountable to the electorate.

Next week: Renzo Piano & the Centro Botín

 

 

Sola.io – changing the way renewable energy is financed

Late last year, I had the privilege to be one of the judges for the PitchX competition for start-ups. The overall winner was Sola, a new investment platform to fund solar power using a virtual power plant structure to bring together investors and producers, who might not otherwise have access to the financial and production benefits of this renewable energy resource.

I had the opportunity to catch up with Alan Hunter, Founding Team member of Sola while he was in Melbourne earlier this month. He was busy in the middle of a series of investor meetings and finalising arrangements for their energy retailing licensing.

Prior to Sola, Alan had established a fleet company that leased cars to Uber drivers. Recognising that some immigrants lacked relevant qualifications for advertised jobs, but lacked the finance to buy a car, the business joined the dots and enabled many people with a driver’s license to secure employment. It told him a lot about about helping those less fortunate by building a business designed to remove inequalities and lower barriers to entry.

With that experience, an interest in renewable energy, and a desire to help consumers reduce their power bills Sola was launched. Starting out as CEC-approved Solar Retailer, Sola offers consumers a subscription service to electricity (at a cheaper rate than users pay today).

Sola is now planning to offer the same subscription service with a solar system, for a cheaper monthly payment. It is able to achieve this though the development of an innovative investment and infrastructure platform, that will serve three main types of clients:

1. Home-owners who want to install solar energy, reduce their own power bills, and even generate additional benefits as rebates or credits from feed-in tariffs

2. Retail investors, who may not have access to solar energy (renters, apartment residents, or those in dwellings ill-placed for panels)

3. Wholesale investors and self-managed superannuation funds looking for an alternative fixed income asset

In short, Sola underwrites the cost of panel installation on consumers’ homes. In return, Sola acquires 100% of the energy generated, and the customer subscribes to Sola for their monthly usage. Consumers become subscription members of Sola’s network, via the latter’s retailer license.

For retail investors, Sola will present them with an opportunity to access fractional ownership of a virtual power plant, for as little as $100. These investors then receive a dividend from the energy sales generated by the network.

For wholesale investors, and for a larger stake, they will be part of a closed end capped fund, which will generate a dividend from the energy sales. Sola has an energy off-take entitlement over the panels, and over time, panels which are replaced may still be sold into secondary markets, such as in developing countries, if they have a remaining useful life.

Some of the benefits of this structure include a more equitable arrangement for access to, ownership, and distribution of solar energy assets. It also removes the need for unsecured lending to finance panels and systems which may soon become obsolete. Plus, it enables people who might not have direct access to solar panels to benefit from this asset.

The complex issue of Federal and State rebates came up in our discussion. According to Alan, the former are useful in supporting the roll-out of Sola’s virtual power plant model, and in accessing the carbon credit marketplace via the Small-scale Technology Certificates (STC). Whereas, State rebates are better for end-users, who can engage Sola direct to install their panels, and then join the Sola retail network.

Then there is the issue of inverters, and batteries. It’s generally the former that are rendered obsolete before the panels, but the costs mean that customers tend to end up replacing the whole system. And the latter will not become economic until purchase costs reduce, and feed-in tariffs are phased out.

Finally, Alan wanted to make sure he got this point across – Sola will shortly be launching campaigns in seven locations, to sign-up 180-230 homes, in areas impacted by bush fires. The aim is to give participants a 35-40% saving on their energy bills, as well as establishing the first phase of the virtual power plant network.

Next week: Australia’s Blockchain Roadmap

 

 

 

 

 

Signing off for Saturnalia

According to a Gallup Report, in 2018 the world was “sadder and angrier than ever. If recent global events are anything to go by, 2019 will easily top that. And as I write, much of south east Australia is on fire (the bushfire season having started back in early August), only adding to the sense of rage. I can’t recall an angrier year, maybe not since the 1970s.

Image of Scott Walker scanned from the NME Annual for 1968

Reasons to be angry? World politics, climate change, fake news, growing nationalism, economic stagnation, and sectarian intolerance. Evidence of anger? Brexit, Impeachment, Hong Kong, France, Chile, Iran, India, Iraq, Adani, Extinction Rebellion, #MeToo, etc.

Meanwhile, considered academic debate has been reduced to very public slanging matches. Even popular music seems shoutier than ever, and no action movie is considered complete without gratuitous violence, hyperbolic pyrotechnics and pounding soundtracks.

So much noise, so much hot air (verbal and atmospheric) and so much sheer rage, not always easy to articulate or understand – and not easy to predict how that will translate at the ballot box, given the election results in Australia and the UK. Politicians of all persuasions are increasingly seen as being a key cause for voter anger, but in both cases, continuity was deemed preferable to change.

As we wind down for the holidays, it’s frustrating to think that the “season of goodwill” is limited to just a few weeks of the year. I’m not suggesting 12-month-long Black Friday Sales. Rather, can we find it in ourselves to be more civil to each other throughout the year, even if we disagree on certain things? In particular, I’m thinking of the growing evidence of sectarian strife. Established religions may condemn to hell (or even death) anyone who disagrees with their belief systems, but in a democratic, secular and pluralist society, the right to “freedom of religion” also means everyone is entitled to “freedom from religion”.

In light of that, I’d like to wish all my readers a safe and peaceful Saturnalia. Normal service will be resumed in the New Year.

 

 

Climate Change and Personal Choices

Melbourne has recently seen a number of protest events linked to the Extinction Rebellion. At the same time, the pro-life lobby were conducting their annual protest against the Victorian Government’s Abortion Law.

It’s quite ironic to see some people advocating for a response to climate change, while others are effectively campaigning for population growth. Yet we also understand that the current global rate of population growth is probably unsustainable; and increased human activity is a major contributing factor to greenhouse gases.

An article from a couple of years ago suggested that having fewer children and living car free were two of the most effective individual choices we can make to reducing our carbon footprint. Of course, some argued that such individual choices were “nonsense”, and would likely undermine the effort for political action on climate change.

For myself, I don’t have children (and don’t plan to), and I don’t own a car (although I sometimes use ride share services). I don’t have an exclusively plant-based diet, although I tend to eat less meat than I used to (side note – if we were meant to be vegan, why do honey and yoghurt taste so good, especially together?). I do travel overseas fairly regularly, but if household water and energy consumption is anything to go by, I think I am well below average.

I don’t think that making appropriate and voluntary individual choices to reduce our carbon footprint negates the responsibility of governments to implement collective change. Nor should individual decisions be seen to be undermining political action on abating the effects of global warming. But policy makers and climate activists alike should recognise and acknowledge that some people are willing (and yes, in some cases, able) to make individual choices that contribute to reducing greenhouse gases.

As for the pro-life lobby, I wonder what they made of the film “Capernaum”? In it, a child sues his parents for the “crime” of giving him life. What astonishes him is their general neglect and disregard (bordering on abuse) for him and his siblings. He can’t understand why any responsible adult would willingly and knowingly expose their children to the life they lead. There is an implication that the parents see their offspring as economic bargaining chips, and of course, there are religious, societal and cultural “norms” that underpin many of the parents’ decisions. With so many unwanted and unloved children brought into the world, and sometimes to parents who may end up mistreating them or worse, I guess the thing that frustrates me with the pro-lifers is their apparent unwillingness to accept that not everyone is fit or able to be parents. We need a license to get married or drive a car, but we don’t need a license to procreate…. Equally, not everyone chooses to be parents, and therefore pro-choice is not so much about the right to “murder” unborn children, it’s about the right to plan our lives and to ensure we are able to meet our personal obligations.

Next week: Notes from Auckland