Freediver you are a dolt! Consumers are not the problem! Business is the problem!

I haven't said once that simply having a tank will make you use less, I said being dependant on a tank will make you use less.You can drop the condescending bullsh1t (as always with you) I have lived on tank water, I know what makes you use less water. I have intimate personal experience with tight water consumption, and here you are telling us all how you're going to take your free tank and waste more... My whole point is that a PRICE HIKE is necessary to make EVERYONE use less water, however, since this will be damaging to families who ARE NOT THE PROBLEM they should be given some form of subsidy, a tank is a perfect solution, much better than a two tiered billing system or a tax break for example, because tanks are the superior technology for water storage.

Its a real simple equation... give people tanks, make mains really expensive, everyone saves water, less political fallout from stupid policies that get your ass voted out of office. Like all you idealistic quacks who want to create endless new minor parties, you fail to understand the subtlety (read: corruption, selfishness, inherent evil and stupidity if you will, either way it is a correct analysis) of the real world.

As for your woefully ignorant assessment of petrol prices... hello! business again! Consumers may be able to choose to walk to work, but how do you fix trucking? I have made this point to you before and it soared over your head and still seems to. Industry you dolt! Industry is the bulk consumer, and cannot in the short term simply switch technology in response to tax hike without massive economic damage.... Get with the program! If it were that easy we would have solved this problem by now!

Freediver you are a dolt! Consumers are not the problem! Business is the problem!

Wrong again. Carbon emissions and excessive consumption of surface and underground water is the problem. To restrict yourself to business ignores two major parts of both the problem and solution:

1) A lot of the energy and water is consumed directly by retail consumers.

2) Business provides goods for consumers. In the end consumers pay anyway. If you tax business, any costs they can't avoid through efficency is passed on to consumers. Reduced consumption by consumers of high water or energy cost products is a major part of the solution.

I haven't said once that simply having a tank will make you use less, I said being dependant on a tank will make you use less.

That is not going to happen. The government is never going to cut people's connections off if they are already connected. And to the extent we need to make people rely more on tank water, taxing town water is the best way to achieve that.

I have intimate personal experience with tight water consumption, and here you are telling us all how you're going to take your free tank and waste more...

Hey, I'm a realist. More realism is needed by politicians. Not wasting huge amounts of taxpayers money for comparitively little real benefit.

My whole point is that a PRICE HIKE is necessary to make EVERYONE use less water, however, since this will be damaging to families who ARE NOT THE PROBLEM they should be given some form of subsidy

You were right up until you said subsidy. If you put up a tax, there are a number of things you can do with the money. You can reduce other taxes. You can hand the money out. You can subsidise thing. Reducing other taxes is the best option. Subsidies is the worst. handouts are in between. Don't you think that those struggling families would rather have the money and decide for themselves whether to buy a tank, pay the extra cost of water, or consume less water? This decision is even more critical for poor people as they will be ahrdest hit if you screw with the economy.

You keep arguing for subsidies, but you are not arguing on the basis of whether they are better than those other two options. You are completely missing the point. You argue for subsidies on the grounds that tanks are good, but you so far have failed to engage in the real debate - whether subsidies are better than tax breaks (or handouts for that matter).

much better than a two tiered billing system or a tax break for example, because tanks are the superior technology for water storage.

I'm not sure how many times I will have to say this. The problem is not how to keep our water use up while reducing the drain of rivers. The problem is to reduce the drain of rivers. Subsidising tanks is not the perfect solution because it skews the economy away from a far cheaper option - reducing consumption. It also costs a fortune. While you continue to see the wrong problem, you will continue to see the wrong solution. Tanks are not the only solution and a price signal that pretends they are will harm the economy far more than a price signal based on the real problem.

Its a real simple equation... give people tanks, make mains really expensive, everyone saves water, less political fallout from stupid policies that get your ass voted out of office.

Yes it is simple, but it isn't good. Here's a better option: Tax water, give low income earners an income tax break, let them decide whether to buy a tank or reduce consumption. The government should not make the decisions for them. That is communism. Communism has failed. Get over it.

Like all you idealistic quacks who want to create endless new minor parties, you fail to understand the subtlety (read: corruption, selfishness, inherent evil and stupidity if you will, either way it is a correct analysis) of the real world.

Actually, that is you. You fail to understand that people will take the free tank, at a huge cost to taxpayers, then just consume even more water.

As for your woefully ignorant assessment of petrol prices... hello! business again! Consumers may be able to choose to walk to work, but how do you fix trucking? I have made this point to you before and it soared over your head and still seems to.

Every time you fail to understand my response you put it down to me not understanding the problem. It is you who doesn't understand. Trucking will have a number of responses to a green tax shift, such as:

1) Switching to alternative transport methods such as rail and water
2) Going broke
3) Passing the price onto consumers, resulting in a decrease in the trades most reliant on trucking.
4) Reorganising so that transport networks are more fuel efficient. Currently other factors such as labor and infrastructure costs are weighted far more heavily than emissions. An emissions tax will change this.

Got it?

Industry is the bulk consumer, and cannot in the short term simply switch technology in response to tax hike without massive economic damage....

Why not? It can switch in the short term in response to a green tax shift far better than worse options such as subsidies. We cannot afford to cling to industries that are no longer needed just for the sake of keeping industries going.

I think we have had this discussion before and I recommended you ask an actual economist, say a professor at your nearest university. But you quit the discussion instead. Can I make that suggestion again? You obviously don't have a firm grasp of the economic implications and do not trust my knowledge of the issue. But I'm pretty sure that when someone you do trust tells you the exact same thing you might think a bit more about it.

Just make sure you ask the right question. Don't ask whether tanks subsidies are better than dams. Ask whether subsidies are a better approach than a consumption tax coupled with a tax break targetted at low income earners.

freediver wrote on May 12^th, 2007 at 10:31am:

Poor families are often land owners too. And funny... I get a water bill in the mail every quarter and I rent.

You are entirely missing my argument, again and again in your responses. You are breaking down what I am saying into bits and attacking the little bits one by one without realising that what I am proposing doesn't make sense in little pieces. Perhaps this is why you think I'm not making sense, but it is you who is jumbling up my argument.

I'll make it simple. I agree with you an excise (consumption tax) on water is what we need to reduce consumption, but it is not fair on households to bear the financial burden of this when industry uses 80% of water. So you give households the option to avoid some of this tax burden by offering them a reward if they use less water. Not only that but at the same time you are introducing the superior technology into the infrastructure, by taking the load off the dams you will make it so we can continue to grow without building more of them. Note this will only work through also conserving water.

There is nothing that will make a person use less water than having one of two options: rely on a tank or rely on an expensive source of mains water. If you just make mains expensive, there will be political fallout. If you make mains expensive but give people the option to be self-reliant, they will learn to be self-reliant and self-regulating. Less political fallout. In a democracy, you have to work with the idiot masses.

The public always needs some way to be pushed to use the superior technology, tank subsidies provide this. You fundamentally fail to grasp human nature, give people a mains supply and they will expect it to be cheap, there will be no political will to otherwise. You may think you can simply convince people otherwise but you don't seem to behaving much luck so far with this little website... try expanding that out to the entire voting population. You get the economics but you don't get the psychology. I get the economics, I agree with you on the economics, but I also get the psychology. A subsidy may not be the best economic principle, but this is a country not just an economy.

And don't tell me you are the god of economics and I know nothing. Our country is run along economic principles, there are many schools of thought, you have only one. I have shown you through economic principles why a tax shift can only be partof the solution, it is not in itself a whole solution. You tried to tell me you are not increasing the available capital to households by reducing income tax? Come off it! Reduce income tax = increased demand, excising inelastic commodities = small amount of reduction in demand, net result, nothing much. Regulation is needed as well, and carrots like subsidies the market always fails somewhere and this is what regulation is for. You advocate all stick, no carrot, whipping people doesn't achieve much.

freediver wrote on May 12^th, 2007 at 2:01pm:

Utter tripe, one piece of your tax shift is increasing taxes, is that alone a good idea? Your tax shift only works if all the pieces work together.

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Again, the same stupid ignorant attitude that has gotten us where we are today. Cheapest doesn't mean best, just because environmental costs are not recognised does not make it inferior, it just means your measure of quality if flawed. Read the report I linked to, when environmental and social costs are factored into it, cost-benefit analysis demonstrated tanks are superior. A subsidy is just a leg up for new technology, the same policy that has always been used.

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...in a perfect world. We live in the real world...

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More perfect world idealism. Get with the program.

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If you get to the ten year mark without a change of government and more populist policy... real world mate!

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You see? You utterly fail to grasp the complex subtleties of the topic. You shift tax from income onto consumption, this means lowered income tax, that means increased household capital, this means people can happily continue to purchase the same quantity of commodity at an increased price. Not that an increase in price can even have a significant effect on inelastic commodities such as petrol and water in the first place.

I have outlined the economics, you just ignore them. Get your head out of the household and think of business. Demand for water, petrol and electricity is inelastic in the short term because technology requires that amount of input for current levels of economic activity. You cannot change this overnight with a price signal. In the short term, while technology catches up, the economy takes a dive, nobody will accept that this is necessary. Government can ease this transition through incentives like subsidies.

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Then why do economists disagree with you? These are all regarded as inelastic commodities when viewed in the short term. You think you can change this in the long term and it is true, you can, but not without a complete change in the technology used. Before technology can be changed (only happens long term) you will still be sitting on high prices with inelastic demand while the technology catches up, at a cost. Net result is that in the short term, the economy will take a dive.

Alternately if you shift tax enough so that net cost increase is offset with a reduction in income tax, you won't change demand because business can still afford to run at current levels of output! Why would they change their technology when they can afford to continue with the status quo?

freediver wrote on May 12^th, 2007 at 3:22pm:

Again, read the report, environmental outcome is better when using tanks. Or is this another 'why should I read your supporting evidence when it doesn't back up my argument' classic weak freediver position

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This is why you don't get it, this is not a disagreement over subsidies, the government will continue to subsidise, you are an idealistic quack if you think otherwise, this is an argument about where the government's money should be spent. Either way, your idea requires that government build on current infrastructure spending tax dollars, my idea involves government spending tax dollars to put the infrastructure in private hands. No difference if it's a subsidy or a public works project.

You seem to think however that reduced consumption alone will save us. Poor analysis of the situation freediver.

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But that is irrelevant! When you have more money at your disposal, relatively higher costs are meaningless.

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Demand for water is inelastic because people need to drink a certain amount, wash their clothes and use the toilet. Without changing the technology used to do these things you won't change the quantity that is used by a great deal. Demand for water by industry is inelastic because technology used in production and other outputs requires certain amounts of water, this wont change without changing the technology used. Demand for fuel is inelastic because people have to drive the same k's every week to get to work and pick up the kids from school, businesses need to truck goods around the country, again this is the technology of the automobile and the system of distribution networks we have, you won't change demand without changing the technology. Demand for power is again inelastic because people use a certain amount of power to get household tasks done, businesses use a certain amount of power to get their jobs done. Without a change in technology this cannot change by any meaningful amount. Technology does not change in the short term, so in the short term if you raise costs, the economy slows down while businesses re-tool and households catch up, that is if technology even exists to make the necessary savings.

A subsidy does not change things overnight, but it changes things at reduced cost to business and in the case that I am putting forth, households.

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Exactly my point, a tax shift results in nothing. A price hike alone which will achieve something will hurt the economy.

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The introduction of most new important service providing technologies has been subsidised by government throughout our entire history... because it HELPS the transition.

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It is a response to the issue, tanks are superior technology for the environment, government is in a position where it is forced to invest in water, savings or no, they must invest, tanks are a better way to spend funds than dams. I gave you a link to a study by a group of economists that is pushing the case for increased tanks subsidies... exactly how does that support your position?

Again, read the report, environmental outcome is better when using tanks. Or is this another 'why should I read your supporting evidence when it doesn't back up my argument' classic weak freediver position

No, the outcome is not necessarily better for the environment when you use tanks. Taxes, subsidies etc can be increased to achieve whatever change, or whatever rate of change you want. The outcome depends on the extent to which you impliment them. For the same environmental outcome, a green tax shift has a far lower economic cost than subsidies.

This is why you don't get it, this is not a disagreement over subsidies, the government will continue to subsidise, you are an idealistic quack if you think otherwise, this is an argument about where the government's money should be spent.

This is an argument about whether the government should spend the money, not where they should spend it. I am not arguing that we should subsidise something else instead of tanks. I am arguing that we shouldn't be using subsidies. Under a taxation system, money would still end up getting spent on tanks, just less of it because other options would also be used.

Either way, your idea requires that government build on current infrastructure spending tax dollars

No it doesn't. I have no idea why you are assuming this. It makes no sense at all. I am saying the government should not subsidise anything. They should simply shift the tax base to water (and greenouse emissions etc).

You seem to think however that reduced consumption alone will save us.

No, I am saying that both options should be judged on their own merits. Subsidies prevent this from happening. They skew the market towards one option at a huge cost to society.

But that is irrelevant! When you have more money at your disposal, relatively higher costs are meaningless.

No it isn't. YOu are dead wrong on this. I'll explain again. Suppose the cost of however much petrol you currently purchase went up $100 per week and you recieved $100 a week extra in after tax income. Would you spend all that money on extra petrol? No. Everyone would purchase less fuel and more of other items. IT is the change in relative costs that drives the reductions in emissions under a green tax shift. It's the same thing with carbon trading. That's what all the talk about 'price signals' is based on. Yu really should ask an economist about it if you don't believe me. When I say relative costs, I don't mean relative to what items used to cost, I mean relative to everything else you purchase.

Demand for water is inelastic because people need to drink a certain amount, wash their clothes and use the toilet.

But that only represents a small fraction of our water consumption. Remember when you were going on about living off rainwater tanks? Look into how much more people on town water use. They use that much because it is almost free. If you give something away people will waste it. It's basic economics. You don't need a degree to understand that. Giving people free tanks won't make a huge dent in their consumption because you are not forcing them to rely on it.

Without changing the technology used to do these things you won't change the quantity that is used by a great deal.

I am not arguing that we shouldn't change the technology. I am arguing that we should achieve that change far more efficiently in economic terms, by not forcing the market to rely solely on technology as the solution.

Demand for water by industry is inelastic because technology used in production and other outputs requires certain amounts of water, this wont change without changing the technology used.

No, it does not rely on 'certain amounts' of water. How much water an industrial process uses depends on the price of water. The more it costs for new water from the town supply, the less they will use. There are plenty of ways in which industry can significantly reduce their consumption, some of which can be implimented in a very short time frame. It all comes down to the economics of the situation.

Demand for fuel is inelastic because people have to drive the same k's every week to get to work and pick up the kids from school, businesses need to truck goods around the country, again this is the technology of the automobile and the system of distribution networks we have, you won't change demand without changing the technology.

Yes you will. Living closer to work, driving a small car etc are not new technologies. New technologies will only play a small role. I know you are going to say that these changes take time, but there is no subsidiy option that could achieve the same rate of change at less cost to the economy.

Demand for power is again inelastic because people use a certain amount of power to get household tasks done, businesses use a certain amount of power to get their jobs done.

Wrong again. Demand is elastic. I've got know idea where you get these strange notions from, but they are simply wrong.

I have updated the FAQ on this. Hopefully it explains it a bit better now:

http://www.ozpolitic.com/green-tax-shift/green-tax-shift-FAQ.html#Q5