27 December 2016, The Conversation, Universal basic income: the dangerous idea of 2016. The resurrection of universal basic income (UBI) proposals in the developed world this year gained support from some prominent Australians. But while good in theory, it’s no panacea for the challenges of our modern economy. UBI proposals centre on the idea that the government would pay a flat fee to every adult citizen, regardless of his or her engagement in skill-building activities or the paid labour market, as a partial or complete substitute for existing social security and welfare programs. Of the schemes run in developing places like Kenya, Uganda, and India, some have been evaluated statistically, delivering some evidence of positive impacts on educational investments, entrepreneurship, and earnings. In the developed world, Canada is trialling a UBI scheme. Finland also just rolled out a UBI trial, involving about 10,000 recipients for two years and costing about A$40 million. While Switzerland’s voters just rejected a UBI proposal via referendum, a similar proposal is presently looking like a goer for Utrecht in the Netherlands. Here in Australia, it has been suggested the government might hand out somewhere between A$10,000 and A$25,000 a year to every man and woman. Can we afford it? There are two big questions to ask before taking a UBI proposal seriously, and the first is the most obvious one: where would the money come from to pay for it? The present Australian welfare system (excluding the Medicare bill of A$25 billion) costs around A$170 billion per annum. Our GDP is around A$1.7 trillion per year, so this welfare bill is about 10% of annual GDP. Read More here
Tag Archives: consumption
21 December 2016, The Conversation, Why we can get over the ‘yuck factor’ when it comes to recycled water. In light of climate change and a growing population, water authorities around the world are looking at the treatment of recycled water to achieve water security and sustainability. Recent authors on The Conversation have raised the possibility of expanding the use of water recycling in Australia, noting the potential benefits for domestic, agricultural and industrial water supply. Some contributors have noted that the major roadblocks to water recycling, in places where it could be beneficial, are not technical issues, but public reluctance to use recycled water. Emotional Responses In the past, our aversion to recycled water has been explained by the “yuck factor”. Some people have an emotional response of disgust to using recycled water, even when they know it has been highly treated and is safe. There are large individual differences in the strength and type of different people’s disgust responses. Psychologists have tried to understand why our thought processes can lead some people to think of recycled water as unclean. One explanation is contagion thinking, the idea that once water has been defiled it will always remain unclean, regardless of treatment, at least according to the mental models that underlie our emotional responses. What such approaches often neglect is that cognition does not occur in a cultural vacuum, but is affected by the associations and stigmas of society. It is important to note that these emotional responses are often in conflict with our rational thinking. Some theorists, such as Nobel laureate Daniel Kahneman, have argued that we make judgements using two contrasting systems. One of these systems is slow and operates according to a formal risk calculus. The other is fast, based on positive or negative emotional responses. Because of this, how we feel about someone or something (positively or negatively) is often as important as what they are being judged on. In other words, the fact that a person understands that a highly treated sample of recycled water is safe to drink may not be enough to stop the emotional response, as we often tend to think intuitively, drawing on our social and cultural values. The most important question, however, is whether the emotional responses some people have to recycled water can be changed. And what role do stigmas associated with cultural norms play in shaping these? Read More here
16 December 2016, The Conversation, Full response from Craig Kelly. In relation to this FactCheck on electricity prices, Liberal MP Craig Kelly sent the following comments and sources to support his statement: Firstly, RenewEconomy – a pro renewable energy website. They quote prices (in US cents per kilowatt hour) in the USA at 12 cents per kilowatt hour and Australia at 29 cents – so on their numbers it’s actually closer to 2.4 times higher rather than double. These costs are described as “average national electricity prices” which I’d take as both businesses and households. However, I’d note that these figures can bounce around a bit subject to exchange rate fluctuations. Secondly, a report titled Electricity Prices in Australia: An International Comparison by CME (an energy economics consultancy focused on Australian electricity, gas and renewables markets) concludes: “In 2011/12 average household electricity prices in Australia (just under 25 cents/kWh) were 12% higher than average prices in Japan, 33% higher than the EU, 122% higher than the US.” Read More here
16 December 2016, The Conversation, FactCheck: Are Australians paying twice as much for electricity as Americans? Business here and households here, already we’re paying twice the cost of the US for electricity. – Craig Kelly MP, chair of the backbench environment and energy committee, ABC Radio National Breakfast interview, December 6, 2016. (Listen from 7.38). Environment and energy minister Josh Frydenberg recently left open the possibility of some form of carbon trading in the electricity sector. He later ruled out that option, saying he wanted to keep electricity prices down. Following Frydenberg’s initial comments, Liberal MP Craig Kelly said businesses and households in Australia are already paying twice as much as Americans for their electricity. Is that true? Read More here