This week, Luke Grant is joined by Chief Economist at the Institute of Public Affairs, Adam Creighton, for The Sunday Showdown.
Now on weekends the Sunday Sweet looking at the stories of the week. Look, no shortage of issues to rip into on planet Earth right now. Who better to do it with than the great Adam Crichton, formerly of Washington d C And the Australian newspaper and now Chief Economists at the Institute of Public Affairs. And he's on the line. Good I Adam, good morning. Lovely to talk to you, mate, Lovely to talk to you. You wrote brilliantly about net zero through the week. I just had a listener told me about his new power prices, and you know, we've all had to live through this. The government think they're heroes because they give us some of our money back to help pay for the very big bills that they've created. But the question of net zero has become key here because a proportion of the coalition, name with the Nationals, is saying we've got to get the hell out of this. And it's not just Nationals, as you pointed out through the week former Labor British Prime Minister Tony there that's called the net zero policy doomed to fail due to its irrationality. It's a really big issue. Why do we need to give net zero the flick.
Yeah, well, look, certainly I think we may have turned the corner very slowly on all the net zero nonsense. As you pointed out, a former British Prime Minister Attorney players come out against the new South Wales Nationals, South Australian Liberals, UK Conservative Party have all dumped it. Now. Well, I think more and more people are realizing it's just a massive tax on the economy and it totally restructures the economy in a terrible way. You lose your manufacturing sector. Of course, as you pointed out earlier, power prices go through the roof, so you have huge job losses, huge increases not just in the direct power costs, but all the costs of food, the food and the supermarkets because obviously fuel goes up, transport costs are higher, and look, you know it's you know, we keep hearing that we're on the way to the transition, but really we're not. There isn't really much of a transition. We're still totally dependent on fossil fuels for our energy, but the rollout of wind and solar around the country is just massively increasing the costs overall because the extra we have to spend on transmission networks and they drive the old fossil fuel reliable power stations out of business. So look a total mess. And I really do hope the coalition formally dumps it and goes to the next election to promise to unwind it. Otherwise we're going to face more and more economic destruction in this country.
We love to or certain parts of the commentariat love to talk Australia down. But here's the thing, Adam, surely we obviously produce eight percentage. I think it is one percent of global emissions. Countries like the United States, China, India and Russia they dwarf what we do. But it seems are right and saying it's Australia. I think you might have said this, Australia, Canada and the EU want to play by the rules, but the other countries large emitters that they're just paying lip service to them.
Yes, look it's just a joke. I think it's fallen. I think Australia's share has actually fallen from one point five percent about fifteen years ago to one point one percent. So even if we have our missions, it barely makes any difference at all. So we're just engaged in this huge economic self harm, self sacrifice, if you like, for no reason. I mean China and India, just those two countries, their share of global emissions is now forty percent, and even the US is only thirteen percent. And China and India are not paying any attention at all to these so called Litzier goals. They're rolling out hundreds of newqualified power stations that also, by the way, building lots of nuclear power stations too in China, which is sensible, but their emissions are going up massively. I mean, you have countries like you know, large countries like Britain, they have reduced their annual emissions by about two hundred and forty million tons of carbon dioxide a year, that's over the past twenty years, but China has increased it's by one point nine billion. So I mean, so you know, the UK is going these huge efforts, massive massive sacrifice, but it's not making a scrap of difference to the global carbon emissions. And you know, net zero in the US is obviously not being not being pursued under the Trump administration. And as you said earlier, it's really just US and the EU and maybe Canada and if you wait all of that by GDP, it's about fifteen percent of the world is paying any attention to net zero. So I think, you know, we're just a laughing stock. And you know, the idea that we're going to inspire other countries to change their mind, I think is just ludicrous.
Yeah, yeah, I'm sure that that is right, one hundred percent correct, Adam. Going back to your Washington d C days, all those probably months ago, Now, well, what's what you read on Trump and Iran is he and he's moved those B two bombers. So he's obviously making it clear for anyone who's paying attention. Hey, I'm not just dittle dabbling around here. You know we are serious. But do you imagine he'll he'll assist Israel or what do you think?
Well, look, it's you know, it's hard to predict this. He's got huge, this huge domestic political problem where I would say probably more than half of his base, his magabase, his fervent supporters, they don't want to get involved. They don't want the US getting involved in other wars. They're often sympathetic to Israel, but they just don't want they don't want Americans to die and spend more money in the Middle East anymore, but says, you know, I'm sure your listeners know there's been a series of failed wars in the Middle East over many years that have cost the US a lot and really haven't achieved a great deal. But on the other hand, you know this, Trump has said many times that Iran can't have a nuclear weapon, and their administration there in Taran has said many times that they intend to do just that. So it puts the US present in a very difficult position. He has moved those bombers. It doesn't necessarily mean anything. I don't think we won't know until something happens that will happen suddenly. Probably. You know. My understanding is Israel wants the US to join, obviously, but look, it's a it's a very vexed problem, and I'm not you know, I'm glad, I'm not. I'm glad I'm not making the decision.
Yeah, a tough one me both. Now, today we read in the Nine Papers that Treasurer Jim Charmers, who we call here JIMBO, has revealed the recently released book Abundance, which argues progressives need to rethink their overly rules based approach to making the change they want had been a wake up call for the left of politics. Now you know it's been it's been the catch cry of center right governments to have smaller government. This is not this is not a new thing. But it took the work of American journalists as a reclient and Derek Thompson to convince the treasurer here, do you actually think the unions to let him get rid of red tape if it reduces their power? I can't see it.
Well, no, look, I can't see it. And actually it's this labor government that has massively increased regulation so much. I mean, the IPA has done a lot of research on on the growth and regulation over the years, and it's just extraordinary to see the figures. I mean, we've just had just over the last three years, we've had an increase in the number of regulatory roles, if you like, in the federal government. So he's bureaucract's employed full time to enforce regulation that's gone up nineteen percent to one hundred and seven thousand staff. That's the match. So this is your things like well obviously net zero and a huge raft of regulations that go with that. You know, we don't talk much about the industrial relation system anymore, but that is extremely regulated, and you know that entails hundreds and thousands of regulations too, so you know, and we haven't even got to the tax system yet. So look, I mean, he's right that we do need to reduce regulation obviously. I mean we're in a period of extremely lackluster growth, extremely low productivity growth. You know, we've had declining living standards now, you know, for most of the last three years. So something has to be done. But you know, I must say I'm a little bit skeptical that the this government will be able to do it. But you know, let's hope they can. They have a big majority. Should try to do some good things.
Yeah, exactly. And the Productivity round Table which is upcoming, do you say anything come out of that. I mean, we had the Jobs and Skill Summit when they were elected last time. I'd argue nothing much came out of that. Will anything come out of this.
Well, look, let's hope. So. But I'm a bit worried the Productivity Commission. I'm a little bit worried that it's been too captured by the left. I mean, it doesn't seem to advocate for lower taxation anymore. It's more partial to spending growth. And indeed, this whole debate, we have to remember spending is the problem. We need to reduce that. Sure, we do need to change how we raise revenue because we do it in a very inefficient way. But spending growth is out of control. It's growing far faster than population growth or inflation. You know, you've got the NDIS in particular. You know it's growing almost ten percent a year. It's completely out of control. So I do worry that this whole chat of tax reform will just lead the higher taxes. But we do need to simplify the system, reduce the overall rates. I mean, you know, one fact I always say is our top marginal tax rate is higher than China's and they're supposed to be a communist country, So what does that say about us? That's the case, So we need to get those rates down to encourage people to work and say and also, you know one thing that's not talked about in my sense is a lot of bright young Australians are leaving Australia to go work in the US or work in other jurisdictions where they pay far less tax because it's just so hard to get ahead here because of the tax burd Yeah, great.
To chat, Adam. Have a terrific weekend. Thanks so much for your time, mate. Yeah thanks, lluy good on your Adam Crichton, chief economist at the Institute of Public Affairs,