#qantas

Constructive dismissal?

CM’s view on the incompetence of Rugby Australia (RA) is well documented and reconfirmed by Alan Jones in The Australian today. It appears that Israel Folau looks more like a sacrifice to the altar of the sponsor god, Qantas.

Sponsorship money is important to sports teams but it should never get to a point where the sponsored has to make unconscionable decisions to acquiesce their paymasters. It is unethical.

CM has long held issues over Qantas’ flagrant use of shareholder capital to sponsor the CEO’s activism. It is terrible governance.

Remember the acceptance rings ahead of the same sex marriage debate that Qantas pushed so hard on us? The idea was to distribute these acceptance rings (not fully closed) to customers, clients and travellers.

CM supposed if someone were to politely decline to wear one they risked being be branded homophobic, bigoted and summarily ostracized for expressing such views. It might be that they actually support gay marriage but do not wish to express it openly. That is nothing more than a conscious choice, not categorical staunch opposition. Perhaps failure to wear the ring could cause their career takes a turn for the worse all because they don’t comply with group expression i.e. corporate slavery. The team leader who passes them over because they incorrectly assume the employee is a dissenter. That is palpable workplace bullying encouraged by a woke CEO.

What Jones points out is that the ‘wallaby court’ had already decided the outcome before a word was uttered in defence. It appears it was a ‘hearing’ conducted with the deaf.

RA CEO Raelene Castle apparently told Vanessa Hudson, chief customer officer at Qantas,

I updated her on the situation a day after the post and told her that, confidentially, Rugby AU would be working towards a process to terminate Mr Folau’s contract and that Ms Hudson can share that position with Qantas chief executive Mr Alan Joyce. Ms Hudson texted me later that day saying that she had only shared the update with Mr Joyce and he was appreciative of the transparency and he said that a speedy resolution by Rugby AU was paramount.”

This says a lot about Qantas. If it wants to exert control over RA it should acquire it and manage it as a subsidiary.

Yet where was the pushback by RA? It flaked. If it understood the dwindling fan numbers meant it wasn’t connecting to revenue, it might have thought defending Folau might have been its greatest coup and that many non virtue signaling corporates could replace Qantas’ sponsorship.

The culture of RA is self evident. It is not about rugby anymore but a platform for identity politics.No wonder fans are deserting it. CM discusses dwindling fan numbers yesterday, something Jones alluded to. Put simply, the product stinks and that rot permeates from the top. Fans aren’t stupid.

Coach Michael Cheika’s abysmal win/loss record is tolerated because he tows the line of the C-level cabal. So do some of the players who threatened to boycott the team if Folau was allowed to keep playing.What a joke! These virtue signaling players if given the choice to stand by their beliefs or keep their lucrative contracts would choose the latter every time. They sounded just like those Hollywoodcelebrities that threatened to leave America if Trump won the presidency.Hypocrites.

However it only reinforces the reality of the culture within the RA that encourages this type of numb skulled response to pander to the top. If these players wanted to think about faith in context of not selling out core beliefs they could learn muchfrom Israel Folau.

It increasingly looks like the high level breach has been committed by the board in cahoots with Qantas.

As CM mentioned yesterday, perhaps receivership is the best outcome for RA. That way the apparatchiks get cleared out and replaced by people that connect with fans who ultimately pay the keep the lights on at HQ. It isn’t that hard to fix RA’s problems but it will be impossible with a leadership team which seems to support constructive dismissal at the behest of corporates that champion activism rather than principle. Clearly Qantas is the mean “spirit of Australia”

Get woke, go broke.

Industry gets the management it deserves

What did the Rugby Australia (RA) board expect from Israel Folau? That he’d crawl away into obscurity? CM has long held the RA’s handling of this affair has been about as good as the Wallabies on-field performance under Michael Cheika, the coach with the worst record in the history of the team.

Industry gets the management it deserves. Bad outcomes come from poor decisions at the top. RA CEO Raelene Castle’s performance in this affair has revealed she has no crisis management credentials. If Folau ends up bankrupting RA then management didn’t weigh the risks properly when they terminated him for a supposed “high-level breach”.

Recall RA tried to buy Israel Folau off with a $1m shut-up cheque but his religious beliefs weren’t for sale. Folau reached out to former Wallaby and fellow devout Christian, Nick Farr-Jones, who concluded after an intense grilling that his faith was authentic. Did the board take into account NF-J’s testimony? 

The RA’s decision smacks of the spineless virtue signalling that pervades our corporates today. It folds at the first sign of social media activist pressure. It might bang on about “inclusivity” but it practices exclusivity. One wonders if a player from another religion tweeted “apostasy is death” the board would have sung an entirely different tune. It would have said, “we respect all views.

Then we saw the hypocrisy of NRL Chairman Peter Beattie who spoke of the importance of inclusion and freedom of speech (when it comes to players protesting the national anthem) despite affirming that Folau would never play rugby league. So which is it? Whose freedom of speech is free? Beattie even argued that the Folau Twitter post still remained up. If he took it down would the NRL sign him up? Not a chance.

As CM wrote in the last dispatch, RA’s #1 priority does not appear to be rugby. The website is flush with identity politics. Such as this:

MCC works with influential leaders and encourages them to take action towards gender equality. 

Rugby Australia is a proud supporter of MCC and our Chief Executive Raelene Castle has recently been appointed as a Special Advisor on the MCC Sport program. 

This program aims to enhance the involvement of women in all aspects of sport and works with key stakeholders to achieve pay equity.

What has this got to do with managing the Wallabies franchise? Too much focus on irrelevant things that will not turn around the continual losses in the business because the key ingredient that generates revenue – a winning team is second fiddle.

RA folded at the foot of the sponsor, Qantas. A sponsor has the rights to be represented in certain ways but how little confidence must RA have in its ability to attract new backers? Cricket Australia snagged Alinta Energy after the ball-tampering scenario. CM reckons the Adani Wallabies has a nice ring to it.

RA is not run for its fans. Player David Pocock was arrested and charged for chaining himself to a piece of heavy equipment but Folau was fired for quoting a passage from the Bible.

It is quite likely that Folau’s bid in the High Court will succeed. Our constitution enshrines free speech. Whether we like what he said or not is irrelevant. We either support it or we don’t.

Maybe RA needs a total clean out? Perhaps sending in the receivers would see the appointment of someone who loves the game and reconnects with the fans, not waste time trying to enforce identity politics on them.  RA was set up for one purpose. To win.

Why not look at the yardstick of attendance? Why is it since 1962, Eden Park in Auckland is always at full capacity when the beloved All Blacks play? Because the team is so dominant. Why is attendance at Stadium Australia at 65~80% of available seats when it used to be 100% in 2002-2009? Why have Super Rugby attendance figures slumped t to around 11,000 per game vs 35,000 for Aussie Rules and 15,000 for NRL? Even A-League soccer gets average game attendances of 12,500. There is a message here RA. You are not connecting with the flock.

Perhaps Izzy Folau is reciting in prayer for the fans;

For I know the plans I have for you…plans to prosper you and not to harm you, plans to give you hope and a future.” – Jeremiah 29:11

IATA caves to the climate change cabal to fill the UN coffers

The International Air Transport Association (IATA) has got behind the movement to do its bit for climate change. In a two page flyer, it covered the idea that we reckless passengers must consider our carbon footprint but at the same time help the U.N. raise $40bn in taxes, sorry ‘climate finance,’ between 2021 and 2035.

The Carbon Offsetting & Reduction Scheme for International Aviation (CORSIA) is the vehicle which the UN’s International Civil Aviation Organization (ICAO) intends to liberate us from our sins and help fund the waste so endemic in the NY based cabal. Wherever the UN is involved expect a sinister agenda behind the virtue.

All airlines have been required to monitor, report and verify their emissions on international flights since Jan 1, 2019. Operators will be required to buy “emissions units” from the UN. If one asked the UN would it prefer emissions to be cut or taxes to be raised, it would select the latter every time.

But why? Passengers don’t seem to demand airlines flight shame them before they board. On the contrary, many carbon offset schemes exist among airlines but hardly any passengers elect to pay them. Note the world’s largest offset program below.

In its 2017 Annual Report, Qantas boasted,

We have the world’s largest airline offset program and have now been carbon offsetting for over 10 years. In 2016/17, we reached three million tonnes offset.”

Carbon calculators tend to work on the assumption of 0.158kg CO2/passenger kilometre.

In the last 10 years, Qantas has flown around 1 trillion revenue passenger kilometres. While the literature in the annual report denotes one passenger offsets every 53 seconds, the mathematical reality is simple – 2% of miles are carbon offset. So that means that 98% of people couldn’t care less.

Perhaps more embarrassing is that The Guardian noted in Jan 2018 that,

Qantas [was the] worst airline operating across Pacific for CO2 emissions

Kind of a massive load of hot air when you do the maths!

Which begs the question, why does the IATA feel compelled to intervene in ramping up the costs of travel when passengers aren’t calling for it? IATA’s job is to keep airlines flying and support the growth where it forecasts a doubling of air travel by 2030. Airlines have been ordering Boeing 737 MAX & Airbus A320neo short-haul jets as well as long-range B787 & A350 in huge numbers to take advantage of fuel efficiency that helps lower operating costs.

By IATA’s own admission, global air travel in totality is only 2% of man-made CO2 emissions. That is to say that all air travel is responsible for 0.00003% of CO2 in the atmosphere. Big deal! What is the point of taxing an industry where the footprint is so minuscule?

Take Josh Bayliss, CEO of Virgin Group. He said,

“It’s definitely true that right now every one of us should think hard about whether or not we need to take a flight.”

Why doesn’t he close down the airlines in the portfolio? Instead of waiting for his customers to grow a conscience via flight shaming and do the right thing why not force their choice? The obvious answer is that it’s hypocritical in the extreme.

Airlines operate on about 70% capacity load factor break even so if Virgin flights end up being half full thanks to flight shaming he’ll only end up having his fleet of jets spewing more or less the same CO2 per flight which will ultimately put the airline out of business.

It is all too stupid. IATA joins the growing list of bodies petrified to talk in hard numbers about true impacts. When the 22,000 pilgrims that fly each year to UN COP summits around the world to kneel at the altar of the IPCC practice what they preach, CM may start to feel concerned Until then, CM will keep calling the climate hoax out. Deeds, not words, IATA!

Castle tackles inclusivity with exclusivity

The board of Rugby Australia (RA) has capitulated at the altar of political correctness. CEO Raelene Castle unconvincingly announced the reasons why Israel Folau’s contract has been terminated. This is a board that acted on external activism. It buckled. Castle squirmed around the question of whether sponsors had applied pressure or not. What Folau said was unnecessary but how is it other players can get arrested and get away with a written warning?

Ultimately, RA will feel the wrath at the ticket office from already disgruntled paying fans. Attendance continues to slide. RA losses are expected for 2019 following the losses in 2017. The 2018 profit was merely due to an exceptional item. Perhaps Folau’s termination will help plug the hole in the P&L. No wonder losses are being made, given the pitiful performances led by a man with the worst record of any Wallabies coach. Why is he still there?

Australia will be lucky to make it beyond the quarterfinals at the Rugby World Cup in Japan this year. Yet the CEO and board tolerate his woeful record. CM has long argued Michael Cheika can’t unite that team. His record proves it. His team rally behind him publicly but their faces tell a different story.

Castle is out of her depth. She might have cried inclusiveness but there was no conviction in the press conference. Inclusiveness, to many of those on the left, is limited to whatever they prescribe. Stray from the party line and get excluded. Her eyes said it all in the press conference – she is definitely no crisis manager.

Folau, on the other hand, didn’t accept a $1m buy off to walk away so RA could wash their hands of the matter. He stuck and continues to stick to his faith. Hopefully, he takes it all the way to the High Court to leave RA with more egg on its face.

Let’s be clear. Folau hasn’t called for violence against homosexuals. Yet why is it just that group that is singled out as victims? CM ticked a few boxes on his tweet. Surely CM’s right to feeling oppressed is just as valid on the faux outrage scale. Where are the drunkards, adulterers and fornicators calling for his head? Nowhere. With good reason. Because 99.9% of people probably rolled their eyes at the tweet and moved on.

Look at RA’s Male Champions of Change (MCC) program. This is the focus of RA and it is not rugby. RA’s website openly states the following,

MCC works with influential leaders and encourages them to take action towards gender equality. 

Rugby Australia is a proud supporter of MCC and our Chief Executive Raelene Castle has recently been appointed as a Special Advisor on the MCC Sport program. 

This program aims to enhance the involvement of women in all aspects of sport and works with key stakeholders to achieve pay equity.

What on earth could have possessed RA to hire an activist as CEO? Castle also promotes on the RA website:

I have seen the challenges first hand and I have a personal passion to ensure that the gender equality discussion is at the forefront across all aspects of our society.

Quite frankly 99% of her customers couldn’t care less about RA’s stance on gender equality nor the group’s wish to drive it across society. They want to see good rugby. They d not see it as RA’s job to tell them how to behave. RA is answering questions nobody is asking.  If female coaches are better than the males, no male rugby supporter will care if the team is quite literally putting scores on the board. No one needs or wants RA’s activism which also extends to male domestic violence. How about female domestic violence against men? Take a look at the stats. Let’s just beat up on toxic masculinity because it is easier.

Where was the board when Wallabies flanker David Pocock encouraged school kids to join the climate strike or retweeted posts mocking climate skeptics? Is his climate activism ranked above Folau’s quoting of a religious text? Did RA do anything when Pocock was arrested for chaining himself to an excavator for 10 hours at the Maules Creek mine? He was charged with “trespass, remaining on enclosed land without lawful excuse and hindering the working of mining equipment.” Raelene Castle wasn’t CEO at the time but Cameron Clyne, Paul McLean and Ann Sherry were and still are board members. Where is the balance in sanctions handed out?

Let’s not forget the double standards of Pocock. He can find it in his heart to play for a team that is sponsored by Qantas which emits more carbon dioxide per passenger-kilometre than any other airline operating across the Pacific, according to an analysis by the International Council on Clean Transportation. Oh, the irony that he also happily played for a team that was sponsored by gas-guzzling Land Rover SUVs. Nary a peep from the climate activist when it lines his pockets.

What will the other devout Christian Pacific Islanders do? Will they leave the Wallabies en masse? They’re good enough to find homes in other sides. The Japanese would welcome them.

If the RA board think they’ve reached a moral high ground in this decision they’re seriously mistaken. Trying to pay him off was the first big mistake because his faith trumped their expediency. They thought he was all bluster, just like the players who threatened to boycott the team if he remained. Folau wasn’t for sale.

CM has repeatedly said that Folau’s remarks in a public forum were unnecessary but defends his right to say them.

Castle’s decision is a perfect representation of the growing trend of allowing virtue signaling to infect a board which will spectacularly backfire. This is no different to Gillette, Colgate and other brands trying to do moral preening. People want the product. Start throwing lashings of political correctness and watch customers desert them. Footy Show anyone? Trying to be a ‘woke’ corporate is the closest thing to sleepwalking off a cliff.

Actually, vote on the political emergency

No surprise to see The Guardian parrot on about a climate emergency. The editorial completely misses out on the political emergency we face. The economic climate is a massive issue facing Australia. When Bill Shorten tells us that he “will change the nation forever” we shouldn’t view that positively. It is probably the honest thing he has said. Labor’s policy suite is the worst possible collection one could assemble to tackle what economic headwinds lie ahead. Our complacency is deeply disconcerting.

First let’s debunk the climate noise in The Guardian.

The math on the climate emergency is simple. Australia contributes 0.0000156% of global carbon emissions. No matter what we do our impact is zip. If we sell it as 560 million tonnes it sounds huge but the percentage term is all that is relevant. Even Dr Finkel, our climate science guru, agrees. What that number means is that Australia could emit 65,000x what it does now in order to get to a 1% global impact. So even if our emissions rise at a diminishing rate with the population, they remain minuscule.

Bill Shorten often tells us the cost of doing nothing on climate change is immeasurable. He’s right, only in that “it is too insignificant” should be the words he’s searching for.

Perhaps the saddest part of the Guardian editorial was to say that the Green New Deal proposed by Alexandria Ocasio Cortez was gaining traction in the US. It has been such a catastrophic failure that she lost an unsolicited vote on the Senate floor 57-0 because Democrats were too embarrassed to show up and support it. Nancy Pelosi dismissed it as a “green dream.” At $97 trillion to implement, no wonder AOC says feelings are more important than facts.

With the 12-year time limit to act before we reach the moving feast known as the tipping point, it gets confusing for climate sceptics. Extinction Rebellion wants things done in only 6 years. The UK House of Commons still can’t get a Brexit deal done inside 3 years but can act instantaneously to call a “climate emergency” after meeting a brainwashed teenager from Sweden. It speaks volumes of the desperation and lack of execution to have to search for political distractions like this.

The ultimate irony in the recent celebration of no coal-fired power in the UK for one week was fossil fuel power substituted all of it – 93% to be exact. Despite the energy market operator telling Brits that zero carbon emissions were possible by 2025 (40% of the current generation capacity is fossil fuel), it forgot that 85% of British homes heat with gas. Presumably, they’d need to pop on down to Dixon’s or Curry’s to buy new electric heaters which would then rely on a grid which will junk 40% of its reliable power…good luck sorting that out without sending prices sky high. Why become beholden to other countries to provide the back-up? It is irrational.

Are people aware that the German electricity regulator noted that 330,000 households (not people) were living in energy poverty? At 2 people per household, that is 1% of the population having their electricity supply cut off because they can’t afford to pay it. That’s what expensive renewables do. If the 330,000 could elect cheap electricity to warm their homes or go without for the sake of the climate, which would they choose? 100% cheap, reliable power. Yet Shorten’s plan can only push more into climate poverty which currently stands at 42,000 homes. This is before the economy has started to tank!

If one looks across Europe, it is no surprise to see the countries with the highest level of fossil fuel power generation (Hungary, Lithuania & Bulgaria) have the lowest electricity prices. Those with more renewables (Denmark, Germany & Belgium), the highest. That is Australia’s experience too. South Australia and Victoria have already revealed their awful track record with going renewable. Why did Coca-Cola and other industries move out of SA after decades? They couldn’t make money with such an unreliable

Ahh, but we must protect our children and grandchildren’s futures. So low have the left’s tactics sunk that using kids as human shields in the fight for climate change wards off conservatives calling out the truth because it is not cool to bully brainwashed kids. We should close all our universities. As the father of two teenagers, CM knows they know everything already so there is little requirement for tertiary education!

The Guardian mentioned, “But in Australia, the Coalition appears deaf to the rising clamour from the electorate [on climate change].” Really?

CM has often held that human consumption patterns dictate true feelings about climate change. Climate alarmist Independent candidate Zali Steggall drives a large SUV and has no solar panels on her roof! Her battleground in the wealthy seat of Warringah is probably 70%+ SUV so slapping a Zali bumper sticker does nothing but add to the hypocrisy.

Why do we ignore IATA forecasts that project air travel will double by 2030? Qantas has the largest carbon offset program in the world yet only 2% elect to pay the self-imposed tax. Isn’t that telling? That is the problem. So many climate alarmists expect others to do the heavy lifting.

SUVs make up 43% of all new car sales in Australia. In 2007 it was 19%. Hardly the activity of a population fretting about rising sea levels. In Warringah, waterfront property sales remain buoyant and any bank that feared waves lapping the rooves of Burran Avenue would not take such portfolio risk, much less an insurance company.

Shorten’s EV plan is such a dud that there is a reason he can’t cost it. Following Norway is great in theory but the costs of installing EV infrastructure is prohibitively expensive. It will be NBN Mark II. Will we spend millions to trench 480V connectors along the Stuart Highway?

Norway state enterprise, Enova, said it would install fast chargers every 50km of 7,500km worth of main road/highway. Australia has 234,820km of highways/main roads. Fast chargers at every 50km like the Norwegians would require a minimum of 4,700 charging stations across Australia. Norway commits to a minimum of 2 fast chargers and 2 standard chargers per station.

The problem is our plan for 570,000 cars per annum is 10x the number of EVs sold in Norway, requiring 10x the infrastructure. That would cost closer to $14bn, or the equivalent of half the education budget.

The Guardian griped that “Scott Morrison’s dismissive response to a UN report finding that the world is sleepwalking towards an extinction crisis, and his parliamentary stunt of fondling a lump of coal”

Well, he might doubt the UN which has been embroiled in more scandals related to climate change than can be counted. Most won’t be aware that an internal UN survey revealed the dismay of unqualified people being asked for input for the sake of diversity and inclusion as opposed to choosing those with proper scientific qualifications. The UN has climbed down from most of its alarmist predictions, often citing no or little confidence of the original scare.

Yet this election is truly about the cost of living, not climate or immigration. The biggest emergency is to prepare for the numbers we can properly set policy against.

We have household debt at a record 180% of GDP. We have had 27 years of untrammelled economic growth. Unfortunately, we have traded ourselves into a position of too much complacency. Our major 4 banks are headed for a lot of trouble. Forget meaningless stress tests. APRA is too busy twiddling its thumbs over climate change compliance. While the Royal Commission may reign in loose lending, a slowing global economy with multiple asset bubbles including houses will come crumbling down. These banks rely 40% on wholesale markets to fund growth. A sharp slowdown will mean a weaker dollar which will only exacerbate the problem.

We have yet to see bond markets price risk correctly. Our banks are horribly exposed. They have too little equity and a mortgage debt problem that dwarfs Japan in the late 1980s. Part/whole nationalization is a reality. The leverage is worse than US banks at the time of the Lehman collapse.

We have yet to see 10% unemployment rates. We managed to escape GFC with a peak of 6% but this time we don’t have a buoyant China to rescue us. Consumers are tapped out and any upward pressure on rates (to account for risk) will pop the housing bubble. Not to worry, Shadow Treasurer Chris Bowen assures people not to panic if their home falls into negative equity! This is the level of economic nous on the catastrophe that awaits. It is insanely out of touch.

Are our politicians aware that the US has to refinance US$8.4 trillion in US Treasuries in the next 3 years? That amount of money will crowd out a corporate bond market which has more than 50% of companies rated BBB or less. This will be compounded by the sharp rise in inventories we are witnessing on top of the sharp slowdown in trade (that isn’t just related to the trade war) which is at GFC lows. The 3.2% US economic growth last quarter was dominated by “intellectual property”, not consumption or durable goods.

China car sales have been on a steep double-digit decline trajectory for the last 9 months. China smartphone shipments dwindle at 6 year lows. In just the first four months of 2019, Chinese companies defaulted on $5.8 billion of domestic bonds, c.3.4x the total for the same period of 2018. The pace is over triple that of 2016.

Europe is in the dumps. Germany has had some of the worst industrial production numbers since 2008. German GDP is set to hit 0.5% for 2019. France 1.25% and Italy 0.25%. Note that in 2007, there were 78mn Europeans living in poverty. In the following decade, it hit 118mn or 23.5% of the population.

Global bellwether Parker Hannifin, which is one of the best lead indicators of global industrial growth, reported weaker orders and a soft outlook which suggests the outlook for global growth is not promising.

This election on Saturday is a choice between the lesser of two evils. The LNP has hardly made a strong case for reelection given the shambolic leadership changes. Take it to the bank that neither will be able to achieve surpluses with the backdrop we are headed into. Yet when it comes to economic stewardship, it is clear Labor are out of their depth in this election. Costings are wildly inaccurate but they are based on optimistic growth scenarios that simply don’t exist. We cannot tax our way to prosperity when global growth dives.

Hiking taxes, robbing self-managed super fund retirees and slamming the property market might play well with the classes of envy but they will be the biggest victims of any slowdown. Australia has run out of runway to keep economic growth on a positive footing.

We will do well to learn from our arrogance which has spurned foreign investment like Adani. We miscalculate the damage done to the national brand. Adani has been 8 years in the making. We have tied the deal up in so much onerous red tape, that we have done nothing more than treating our foreign investors with contempt. Those memories will not be forgotten.

There will come a point in years to come where we end up begging for foreigners to invest at home but we will only have ourselves to blame.

The editorial closes with,

However you choose to exercise your democratic decision-making on Saturday, please consider your candidate’s position on climate and the rapidly shrinking timeframe for action. We have endured mindless scare campaigns and half-baked policy for too many decades. We don’t have three more years to waste.

This is the only sensible quote in the entire article. The time for action is rapidly shrinking. However, that only applies to the political and economic climate. One can be absolutely sure that when the slowdown hits, saving the planet will be furthest removed from Aussie voters’ minds.

Credit card with a carbon limit

Here is a credit card business model bound to fail. Johan Pihl, one of the founders of Doconomy, is launching a new credit card in collaboration with the UN Climate Change Secretariat and Mastercard. It cuts your ability to spend when you’ve hit your “carbon” limit, not your financial one.

To CM, the pricing is wrong. It should allow one to spend beyond their carbon limit and pay penalties on exceeding it straight into the UNIPCC’s coffers. Or perhaps we should ask all UN staffers to use it as a corporate credit card. If it lived up to its promises, most would have their carbon limit triggered when paying for flights to the next COP summit halfway around the globe. That would be a plus!

Pihl said, “we realized that putting a limit that blocks your ability to complete the transaction is radical…but it’s the clearest way to illustrate the severity of the situation we’re in

It is such a dopey idea. Presumably, if you wish to purchase something that you want and your Doconomy cuts you off, you’ll use another card to complete the transaction. The carbon footprint limit will initially be based off a random calculation tied to the industry aggregate. So it is wildly inaccurate from the get go.

Imagine if the consumer would pick up our app and actually look at their footprint and that’s the basis for whether they buy something or not,”

If history is a guide we can look to carbon offset schemes have failed. Aircraft carbon offsets may provide some idea as to how hard this card might be to sell.

In its 2017 Annual Report, Qantas boasts,

We have the world’s largest airline offset program and have now been carbon offsetting for over 10 years. In 2016/17, we reached three million tonnes offset.”

Carbon calculators tend to work on the assumption of 0.158kg CO2/passenger kilometre.

In the last 10 years Qantas has flown around 1 trillion revenue passenger kilometres. While the literature in the annual report denotes one passenger offsets every 53 seconds, the mathematical reality is simple – 2% of miles are carbon offset. So that means that 98% of people couldn’t care less.

LivingOffset.jpeg

Another example was a cryptocurrency named LivingOffset, which tried to conduct an initial coin offering (ICO) 12 months ago.

LivingOffset notes on its web page,

Let’s say you buy a cup of coffee. You know that producing the coffee has created carbon emissions.  Now, you can offset that damage with a contribution that matches the value of the carbon cost, 5c for a cup of coffee…Your 5c contribution is matched with an equal corporate contribution.  Turning your 5c offset into 10c. Just think, if everyone having coffee did the same… how quickly we could start to make a real difference…All the contributions go to projects that have proven to have a positive impact on the environment by reducing carbon emissions. And, you can track and verify that your money is going exactly where it is meant to go.

To the best of CM’s knowledge, the ICO didn’t succeed and is currently priced at $0. That despite its lofty goals of 128% returns. Perhaps using Wikipedia as a source in the prospectus did not help matters.

CM is not sure about his readers, but to have the card reject a payment based on spurious mathematics would undoubtedly frustrate after a while.

Probably says much about MasterCard to sign up for this virtue signalling rubbish given it is lagging behind Visa. If they looked at Gillette, Colgate-Palmolive and other “woke” corporations, they would learn the value of sticking to their lane and allowing consumers to have the freedom to spend how they choose.

MasterCard 1Q 2019 report showed

Transaction Volume: 19.2 billion

Gross Dollar Value: $1.484 trillion

Cards in Circulation: 2.537 billion

Quarterly Revenue: $3.889 billion

Market Cap: $251 billion

Visa 2Q 2019 report revealed

Transaction Volume: 47.4 billion

Gross Dollar Value: $2.197 trillion

Cards in Circulation: 3.358 billion

Quarterly Revenue: $6.972 billion

Market Cap: $355 billion

$14bn shock for Shorten. Not $100m

Image result for bill shorten ev

Let’s face it, pre-election budget boasting is a beauty contest we can do without. Fanciful promises guarantee we will not end up in surplus. Shorten’s speech was loaded with mistakes. Let’s cut through some numbers.

The Coalition put forward the following on Tuesday.

What escaped many in the Frydenberg budget of Tuesday is that to fund the 16.8% jump in tax receipts on 2018/19, individual taxpayers will still see their pockets hit +18.4% in aggregate even after including the ‘generous’ rebates. Superannuation tax collections will jump 43% in 4 years time.

NDIS spending is targeted to be 92% higher by 2022/23 than last year. Medicare +24%, public hospital assistance to the states +21%, aged care services +27%. For all the celebrations of lowering pharmaceutical rebates for one wonder drug from $120,000 to $6.50, the reality is spending in this segment will fall 18.4% in total. The family tax benefit will squeak 4% higher in the next 4 years.

As written on Tuesday, the revenue projections of the government are unrealistic as we stare at a slowing world economy. German industrial production in March cratered to 44.1 and China’s auto sales continued a 7-month double-digit slump in February.

Analyzing the Labor response

Shorten claimed NDIS was cut A$1.6bn to get a surplus. Under Frydenberg’s budget, NDIS for 2019/20 will rise A$4.5bn. Out to 2022/23, it rises to over A$24bn.

The Opposition Leader also made reference to A$14bn in cuts to public schools. Note the funding to public schools on 2013/14 was A$4.8bn. In 2018/19 it was $7.7bn and projected in 2022/23 to be A$10.4bn. 

$200mn to renovate nursing campuses in Australia won’t achieve much. The John Curtin Medical Research School at the ANU cost $130mn alone.

Shorten made reference to bushfires being caused by climate change. Fire & Rescue NSW notes that 90% of fires are either deliberately or accidentally set. A Royal Commission after the horrible Black Saturday bushfires showed that policies which restricted backburning reduction targets were to blame for the larger spread of fires, not climate change. In 2013, Tasmania learned none of the lessons with similar policy restrictions preventing the Tasmanian Parks & Wildlife Service to complete more than 4% of all the 2.6m hectares it manages. The reef is not being damaged by climate change and floods and drought are no more frequent or severe than a century ago.

While climate alarmists will relish the prospect of 50% electric vehicles (EV) and cut emissions 45% by 2030 to save the planet, a few truths need to be considered:

1) our own Chief Scientist, Alan Finkel, has admitted that no matter what Australia does to mitigate global warming our impact will be zero. Naught. Nada. Putting emotion to one side, is there any point in spending $10s of billions to drive electricity prices?

2) South Australia and Victoria have already beta tested what having a higher percentage of renewable energy does or rather doesn’t do for sustainable and reliable baseload power. Both states have not only the highest energy prices in Australia but the world. These stats are backed up in Europe. The EU member states with a higher percentage of renewables have steeper electricity prices than those with less. These are facts.

3) Consumption patterns matterLast year Aussies bought only 2,200 EVs. In 2008, SUVs made up 19% of the new car sales mix. Today they make up 43%.
In 2008, c.50m total passengers were carried on Australian domestic flights to over 61m today. The IATA expects passengers flown will double over the current level by 2030. These are hardly the actions of people panicked about cataclysmic climate change. Or if they are, they expect others to economize on their behalf.

Qantas boasts having the largest carbon offset program in place yet only 2% of miles are paid for, meaning 98% aren’t. 

4) Global EV production capacity is around 2.1m units. While rising, it is still a minor blip on 79 million cars sold worldwide. Add to that, auto parts suppliers and car makers are reluctant to expand capacity too fast in a global auto market that is slowing rapidly.

Car sales in China have fallen for 7 straight months. In Feb 2019, sales fell 13.8% on the back of January’s -15% print.  Dec 2018 (-13%), Nov 2018 (-13.9%) & Oct 2018 (-11.7%) according to the Chinese Association of Automobile Manufacturers (CAAM). The US and Australian car markets are under pressure too. 

5) So haphazard is the drive for EV legislation that there are over 200 cities in Europe with different regulations. In the rush for cities to outdo one another this problem will only get worse. Getting two city councils to compromise is one thing but 200 or more across country lines?

Without consistent regulations, it is hard for makers to build EVs that can accommodate all the variance in laws without sharply boosting production costs. 

6) Fuel excise tax – at the moment, 5% of our tax revenue comes from the bowser. $25bn! Will Mr. Shorten happily give this up or do we expect when we’ve been forced to buy EVs that we will be stung with an electricity tax on our cars?

7) Norway is a poor example to benchmark against. It is 5% of our land mass, 1/5th our population and new car sales around 12% of Australia. According to BITRE, Australia has 877,561km of road network which is 9x larger than Norway.

Norway has around 8,000 chargers countrywide. Installation of fast chargers runs around A$60,000 per unit on top of the $100,000 preparation of each station for the high load 480V transformer setup to cope with the increased loads.

Norway state enterprise, Enova, said it would install fast chargers every 50km of 7,500km worth of main road/highway.

Australia has 234,820km of highways/main roads. Fast chargers at every 50km like the Norwegians would require a minimum of 4,700 charging stations across Australia. Norway commits to a minimum of 2 fast chargers and 2 standard chargers per station.

The problem is our plan for 570,000 cars per annum is 10x the number of EVs sold in Norway, requiring 10x the infrastructure.

While it is safe to assume that Norway’s stock of electric cars grows, our cumulative sales on Shorten’s plan would require far greater numbers. So let’s do the maths (note this doesn’t take into account the infrastructure issues of rural areas):

14,700 stations x $100,000 per station to = $1,470,000,000

4,700 stations x 20 fast chargers @ A$60,000 = $5,640,000,000 (rural)

4,700 stations x 20 slow chargers @ A$9,000 = $846,000,000 (rural)

10,000 stations x 5 fast chargers @ A$60,000 = $3,000,000,000 (urban)

570,000 home charging stations @ $5,500 per set = $3,135,000,000 (this is just for 2030)

Grand Total: A$14,091,000,000

Note that Shorten pledged $100m to EV charging stations around Australia to meet his goals. Even if he was to skimp on 2 fast and 2 slow chargers per stand, Aussies taxpayers will need to shell out $6.5bn. At least he could technically cover that with repealing $6bn in franking credits.

Norway’s privately run charging companies bill users at NOK2.50 (A$0.42c) per minute for fast charging. Norway’s electricity prices are around NOK 0.55 (A$0.05c) per kWh to households.  In South Australia, that price is 43c/kWh. So will Shorten subsidize an EV owner charging in Adelaide at the mark up a private retailer might charge? 

What about subsidies to EV buyers? If we go off Shorten’s assumptions of $3,400 per EV at 570,000 EVs per annum, the tax payer will fork out $1.94bn a year.

Will there be a cash-for-clunkers scheme?  If the plan is to drive internal combustion powertrains off the road, existing owners may not be emboldened with the decimation in the value of their existing cars. Let’s assume buyers are irrational and accept $3,000 per car (Gillard offered $2,000 back in 2010) trade-in under the scheme. That would amount to $1.73bn.

8) Making our own batteries! While it is true Australia is home to all of the relevant resources, sadly we do not have enough cobalt to make enough of them.

Australia is home to only 4% (5,100t) of the world’s cobalt. 60% of the world’s cobalt comes from DR Congo which has less than satisfactory labour laws surrounding children. If we want cheap EVs, we have to bear that cross of sacrificing children to save the planet. It can’t be done any other way.

Li-ion batteries consume around 42% of the globe’s cobalt supplies. Cars are 40% of that. The rest being computers, mobile phones, etc.

9) Automakers have set up their own battery capacity to supply internal production. Given our terrible history in automotives, we should not expect them to line up to buy our batteries.

Nissan spent around A$770m on a battery plant in Sunderland. Panasonic plowed $2.8bn into the battery plant that supplies Tesla.

10) Australia has no real homegrown industrial scale EV battery technology. If we bought in a technical license, that will only make our production costs prohibitive on a global scale. Our high wage costs would add to the improbability of it being a sensible venture.

All in, Shorten’s EV plans could cost Australians well over $20bn with c.$4bn in subsidies ongoing.

11) Green jobs – according to the ABS, jobs in the renewable sector have fallen from the peak of 19,000 in 2011/12 to 14,920 in 2016/17. The upshot is that green jobs in the renewable sector are not sustainable.

In short, Mr. Shorten’s budget reply was extremely thin on detail. Especially with respect to climate change. The LNP has plenty of ammunition to prosecute the case on his wild costing inaccuracies (as outlined above) yet will they have the gumption to fight on those lines. Saving the planet is one thing.

Loading a stretched grid with EVs and increasing the proportion of less reliable power sources looks like a recipe for disaster. We need only look at consumption patterns to get a true sense of how ‘woke’ people when it comes to global warming. South Australians and Victorians are already living the nightmare of renewables.

This election is about one thing – individual pocketbooks. The electorate needs working solutions, not electric dreams.