“If you ask me about the future of newspapers you have asked the wrong question” according to Greg Hywood, the Chief Executive and Managing Director of Fairfax Media.

Despite, that, the media release from Melbourne Uni that publicises his delivery next week of the A.N. Smith Lecture in Journalism at the University of Melbourne, says he will propose “a new model for newspapers and will explore journalism in a ‘post-classified’ environment.”

Should be a good speech from an experienced journalist who is in a strong position to do something which makes a difference to future  journalism. His ideas will have weight, particularly given the problems that all newspaper organisations are having dealing with the cost pressures produced by the Internet.

The lecture will be held on Tuesday 15 November at 6pm in the Basement Theatre at ‘The Spot’, Business and Economics Building, 198 Berkeley St, Carlton, and you need to book which can be done at www.unimelb.edu.au/public_lectures. Contact is Carly Faragher cfargher@unimelb.edu.au.

I’ve asked for an embargoed copy of the speech, so hopefully we will have something up the day after it is delivered.

The Minerals Council of Australia released research today showing that the cost of the carbon tax would be six times what the government has claimed.

The difference from the government’s modelling is that the government assumes that by 2016 the world will have a synchronised response to global warming which will include the pricing of carbon.

Like a lot of assumptions in models, this is at best an overly optimistic expectation, and at worst a lie.

Looking at the situation, I’m not sure that the Minerals Council has even got it right. On my a priori analysis, without universal agreement on a carbon tax, the cost of abatement is close to infinity.

This is because if each dollar you spend on abatement has no effect, then no matter how much you spend abating there will be no effect, meaning you could spend an infinite amount and yet save nothing.

Without a global agreement, that is more or less the situation we are looking at because the cost disadvantage imposed on domestic companies means that overseas products will be favoured.

Not everything will shift overseas of course, but that doesn’t necessarily lead to abatement. At the moment there is no technology that can actually abate much at all, apart from nuclear power and hydro.  We have some hydro, but opportunities are limited. We have no nuclear, and are not likely to in the rest of my lifetime.

The other technologies currently available  basically require as much back-up power as they replace. The sun “don’t always shine” and wind is completely fluky, as every sailor knows.

Better efficiencies are also touted as solutions, but these don’t help either. When you save energy you also save money, but money doesn’t just sit somewhere, it gets invested, and when it gets invested there is an energy consumption impact.

Look at it this way. If my business gets more efficient at using air-conditioning in our office that means that I save money on air-conditioning, which I may use to fund my next overseas trip which would involve lots of carbon emissions, perhaps more than I actually saved on the aircon. Most economic activities do involve carbon emissions, which is why the IPCC climate models use economic growth as a proxy for growth in CO2 emissions.

Put it altogether and the official economic modeller’s forecasts fail because, like good economists, they assume that all inputs are substitutable for other inputs at only a small additional marginal cost and that their system is closed. And unlike good economists they assume that money saved is money not spent somewhere else.

This is one issue that can’t be solved on anything but a global basis, or at least one which includes China, the US and India.

Yesterday saw the introduction into federal parliament of the Minerals Resource Rent Tax bills. This marks another retreat from Australia’s position as possibly the best country in the world (see Peter Hartcher’s new book Sweet Spot) along the path that leads to Argentina, or something like it.

The MRRT is not an ordinary tax – it is state-mandated theft whose only real justification is populism (note that yesterday’s news reports carried as part of the justification for the tax the results from a poll which said Australians thought they should be getting more from the mining industry).

It is a bad tax because it taxes companies not on the basis of their earnings, but on the basis of what part of an industry they are in (only coal and iron miners face it), and it has been designed in consultation with some of the larger companies in mining (BHP and Rio for example)  to ensure that the tax falls more heavily on their competitors (like Fortescue Metals).

Good taxes do not pick and choose, but apply equally to all.

It is a bad tax because it taxes an imaginary thing – super profits. While some economics text books may say that such a thing exists, it is in fact the sort of profit that everyone in business strives to make. At the moment, miners may be making a profit in excess of 20%, but then so too are banks.

If you look at the flag ships of the new economy – companies like Apple, MicroSoft, Google and Amazon they will all be making super profits because the assets they need to deploy to earn their income are so tiny compared to the size of their income. Successful countries don’t put punitive taxes on these sorts of companies, they work out how to grow more of them.

A good return in a particular industry is a signal to other businesses that this is a good industry to invest in. The more of a country’s assets invested in such industries, the wealthier the country will be. Turn-off the signal, as this tax does, and you turn-off the wealth.

So this tax doesn’t just steal from the companies involved, but it steals from our collective wealth, and it steals from our future growth.

It is a bad tax because it pretends that the commonwealth has a right to mineral rights when it is in fact the states that have that right. States already charge mining companies for the extraction of the minerals, so this tax represents a sort of double jeopardy for the companies involved, and steals from yet another entity.

This tax is a bad tax because it steals from the states.

It is an indictment of the mining industry in this country that the polls appear to favour this tax. When the opposition was campaigning against the tax it was relatively unpopular, but since the opposition moved on, as oppositions must, the tax has been increasing in popularity because the industry has failed to move in to fill the gap.