Tag: Grattan Institute

Many solar incentive programs were uncapped, and their costs blew out as the price of PV systems dropped rapidly. Read more: Households to get $2000 subsidy for batteries under Shorten energy policy More recently, my colleagues and I have lamented the Victorian government’s return to the bad old days of solar subsidies. Yet most households will be financially better off installing solar even without this subsidy. Batteries are better able to help cut the cost of the entire energy system and so don’t just benefit the people who install them – they also benefit electricity consumers more generally. While solar has historically reduced peak demand to some degree, the Australian Energy Market Operator considers that this effect is reducing as solar has pushed peak demand later in the day. In a perfect world, households would have enough private incentive to install batteries when they benefit the entire system. If households faced higher electricity prices at times of peak demand, they would be rewarded for reducing system-wide costs by installing batteries. These so-called “virtual power plants” allow the controller to reduce a household’s draw on the grid at peak times, thus reducing costs for both the household and the system. Federal Labor should increase the benefits of its policy by mandating that people who receive a subsidy participate in such a scheme, and by targeting installations to areas where the network most needs support. And its cost is capped, which reduces the risk of the sort of cost blowouts that have plagued solar subsidy schemes.

Public policy should be made for all Australians – not just those with the resources or connections to lobby and influence politicians. Australia’s political institutions are generally robust, but many of the “risk factors” for policy capture by special interests are present in our system. Political parties are heavily reliant on major donors, money can buy access, relationships and political connections, and there’s a lack of transparency in dealings between policymakers and special interests. We propose a suite of reforms to reduce the risks of policy capture while still protecting the rights of all individuals and groups to contribute to policy discussions. Greater transparency means more opportunity for the public, media and the parliament itself to scrutinise the policy-making process and call out undue influence or give voice to under-represented views. We recommend three key reforms to improve transparency. Transparency is not enough on its own – strong voices are still needed to call out problems, and voters still need to hold elected officials to account. Boost public trust in politicians Trust in government is in decline: in a 2018 survey, 85% of Australians thought at least some federal MPs were corrupt. The best defence against policy capture is healthy public debate Greater transparency and accountability would help reduce the risk of policy capture by special interests. We suggest two reforms to reduce the influence of well-resourced special interests and promote broader participation in public debate: First, a cap on political advertising expenditure during election campaigns would reduce the imbalance between groups with very different means to broadcast political views.