Means test devastates solar panel industry and costs jobs

In an extraordinary move, Dean Mighell, Victorian state secretary of the Electrical Trades Union, has written to the Liberal Party expressing his support for their efforts to have the Labor government reverse the means test for solar panel rebates. They have been joined by the Greens in their condemnation of the policy which is devastating the solar panel industry and has resulted in job losses.

The previous Howard government introduced a rebate of up to $8,000 for the installation of solar panels. In the last Budget, the Labor government imposed a means test that restricts the rebate to households earning less than $100,000 a year.

The explanation offered by the Labor government for this monumental act of fiscal foolishness is ludicrous. On ABC radio, Environment Minister Peter Garrett said "This was a program that was very popular, it was a program that was overheating." In reality, we are witnessing a prime example of Labor's economic mismanagement that has resulted in workers losing their livelihoods. Many businesses in the solar panel industry have reported losing up to 80% of their contracts and have had to lay off employees.

Last year when Labor was in opposition, Mr Garrett and Prime Minister Kevin Rudd announced their policy on solar panels on the premises of Solartec Renewables, a family business located near Canberra. Mr Rudd made the following statement:

"We need to boost renewable energies in general. Solar is the most greenhouse-friendly energy available on the planet and, therefore, we just need to take some practical steps to make it possible for as many families as possible to invest in this."

Since the last Budget, the means test has ruined Solartec Renewables. They have lost $500,000 worth of orders and have had to terminate the employment of three of their staff.

Charges dropped against former part-time $630,000 public servant

Jim McGinty, Attorney-General and Health Minister for Western Australia, would be more than satisfied with the decision of Robert Cock, Director of Public Prosecutions, to not prosecute Dr Neale Fong, former Director General of Health.

The appointment of Dr Fong by Mr McGinty to reform WA's troubled health system has been a major embarrassment for the Carpenter government. Despite having to juggle such a demanding position with his commitment as chairman of the WA Football Commission, he was paid $630,000 a year, more than any other public servant in the nation. He set up his own bureaucracy at elite offices on Alvan Street in Subiaco, which costed $450,000 to fit out and $1 million to lease over four years, and wasted taxpayers' money on a string of costly external consultants. Dr Fong resigned in disgrace after the Corruption and Crime Commission (CCC) made adverse findings against him relating to his relationship with lobbyist Brian Burke. A report tabled in Parliament states that Dr Fong:

• Engaged in serious misconduct by disclosing a restricted matter to Mr Burke, namely that the Commission was investigating a senior Department of Health officer, Mr Michael Moodie.
• Engaged in misconduct by telling his Minister that he had no recollection of any email communication between himself and Mr Burke and had no personal relationship with Mr Burke while the Commission found evidence to the contrary.
• Engaged in misconduct by failing to report the disclosure to him by Mr Burke of what Mr Burke claimed to be confidential Cabinet information.

Despite the findings of the CCC and admitting that the prospects of a successful prosecution were good, Mr Cock decided not to pursue charges against Dr Fong. He said that the likely penalty of a $60,000 fine was minor compared to the humiliation he has already suffered because of the investigation. Unfortunately, Dr Fong now sees the decision as a vindication of his actions. At a press conference, he stated "I was always confident that I had not committed an offence and that confidence was supported by my legal advice."

Leader of the state opposition, Troy Buswell, said the move meant there was one law for the rich and one for the poor in Western Australia.

• Corruption and Crime Commission: Report on the Investigation of Alleged Misconduct concerning Dr Neale Fong, Director General of the Department of Health

Labor loses the plot with FuelWatch

Labor has again shown its indifference to small business and is happy to allow large corporations dictate prices. Rudd has chosen to proceed with a national implementation of Western Australia's FuelWatch scheme against the advice given by the following departments:

• Department of Prime Minister and Cabinet
• Department of Resources and Energy
• Department of Finance
• Department of Industry

They warn of the possibility that the winners will be the large fuel retailers, and the losers the small independent service stations and consumers, which include Labor's "working families".

Treasurer Wayne Swan's response to criticism of the government's decision to ignore the advice of these departments shows that they are rank amateurs in economic management. He stated that they chose to listen to their own "common sense" instead of the "bureaucratic" and "academic" advice of the above four key government departments.

The Regulation Impact Statement (RIS) tabled in Federal Parliament by Assistant Treasurer Chris Bowen clearly states that, as has been demonstrated in Western Australia, the scheme enables fuel retailers with large networks of service stations to employ a strategy of rolling price leaders, putting smaller independent operators at a competitive disadvantage. Ultimately, this could affect motorists with higher fuel prices.

The economic modelling of the analysis released by the Australian Competition and Consumer Commission (ACCC), which the government uses as the foundation for its policy, is highly questionable. Professor Sinclair Davidson from the Institute of Public Affairs (IPA), states that "the ACCC analysis is not convincing," and "the introduction of Coles into petrol retailing totally dominates the effect that the ACCC attributes to FuelWatch." The ACCC has not released the data and has been vague on the econometric techniques used in their analysis. As the Rudd government will soon consider whether to reappoint Graeme Samuel as the chairman of the ACCC when his current term ends on July 31, relying upon the findings of this analysis alone is very naive, but politically this is a convenient option for the government.

• IPA Media Release: ACCC analysis of FuelWatch unconvincing: WA price decline entirely attributable to introduction of Coles into petrol market, not FuelWatch