Smash The Machines

During the 2010 Australian Federal Election, Julia Gillard promised that no carbon tax would be introduced during this term of government.  Less than a year later, “circumstances have changed”.  A carbon tax is a tax that inflates prices at every stage of wealth creation.  Primary producers, even if exempt from the carbon tax, must purchase goods and services that are not exempt.  Industries that process raw materials, manufacturers, transportation and retailers will all incur direct carbon taxation and indirect carbon taxation in the form of increased prices for the goods and services that they consume in the process of creating wealth.

Inflation will inevitably follow which will need to be managed by the reserve bank in the form of higher interest rates.  Worse yet, the increased cost of creating wealth will shift the supply/demand intersection point for all goods and services such that production will be reduced (as there will be less demand at the higher price) or curtailed entirely (if demand is so elastic as to preclude a price increase sufficient to make production profitable).

Industries could be destroyed and the economy will slow down, almost certainly to the point of recession.  All of which is entirely unnecessary.  If the Labor party were to abandon its irrational opposition to the use of nuclear power for electricity generation, Australia could set about reducing our national carbon footprint while creating new jobs and stimulating economic activity.  Industrial activity in the mining sector would increase, Australia could establish a uranium enrichment industry for domestic and international consumption and we would create long term reductions in the carbon cost of wealth creation throughout the economy.

Instead we are being treated to a display of Labor party and Green party hostility to the creation of wealth.  “Smash The Machines” is their ideology and smashing the machines is what they are doing.

Julia Gillard, if circumstances have changed so dramatically that election pledges are no longer meaningful or binding, hold an election so that the discussion can include the public as full and potent participants in the debate rather than having the debate in private between members of the nomenclatura who will never have to bear the full brunt of the lifestyle reductions that their ideology will produce.


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