Remember the flood levy? Kind of a big issue some weeks ago. Nick Xenophon will try to send it off to a Senate inquiry today. But cast your mind back, geez, four weeks, maybe?
“Julia Gillard has staked her authority on a $5.6m flood levy…” Michelle Grattan wrote. “…made the package a test of her Prime Ministership.” “Julia Gillard has staked her political authority and reputation as an economic manager on a new tax,” wrote Phillip Hudson. The battle over the flood levy would, according to Dennis Atkins, “define a political year already looking every bit as bitter and willing as the bruising one just past.”
Now the flood levy is all but forgotten, and we’re seeing the same sorts of headlines for the carbon price proposal. That’s not to bag any of those journalists – excellent political observers, all of them – but to suggest that we might want to keep the political hyperbole under control just for the moment.
You might also recall the terrible bagging the Rudd Government got – rightly – for mishandling the RSPT by failing to consult with the mining sector before announcing a detailed policy. What the Government should have done, we were told, was release the Henry Review, commit to the principle of fixing royalty regimes, and then consult the relevant industry. Now the Gillard Government is taking that exact approach, but copping criticism that it has left itself open to Opposition attacks on issues like electricity prices. It need to produce a detailed policy fast, apparently.
Then again as I pointed out last week, consistency is not a recurring feature of the carbon price debate – not for the major parties, not for business and not for the media. Not even for Tony Abbott, who yesterday revealed yet another position on climate change, declaring he believed in it and believed that it was man made. His initial position as leader, as declared to that guardian of the Liberal flame Alan Jones in December 2009, was that “notwithstanding the dramatic increases in man made CO2 emissions over the last decade, the world’s warming has stopped… there doesn’t appear to have been any appreciable warming since the late 1990s.”
Both sides would like you to suspend disbelief and accept that the theatre on display at the moment is the real thing. The Government would like you to believe it’s rediscovered its spine on climate change and finally Stands For Something. The Opposition would like you to believe there’ll be a carbon price over their politically dead bodies and that they’ll repeal it.
There’s a slight mechanical problem with repeal, by the way. The Greens will hold the balance of power until July 2014 at the very least, and will probably continue to hold it beyond that, so the earliest a Coalition Government could kill off a carbon price would be a month or two into the 2014-15 financial year, assuming a massive election win delivers it control of the Senate. That’s year three of its operation. And repeal will also involve not just ending the tax, but halting the flow of transfer payments to households intended to be compensation for carbon price impacts. Good luck with slashing that assistance, chaps.
But the vast gulf allegedly between the two sides is rather narrower than they’d like you to think. And yes, I know what some of you are thinking — we bag politicians for lacking policy bravery and then when it comes along we bag that too — but don’t get carried away. It’s not just that both of the men most likely to replace Tony Abbott as Liberal leader support a carbon price, as do a large number of Liberal MPs. It’s more that Labor has, on the evidence so far, no will to introduce an effective carbon pricing scheme. They have the Greens to hold their feet to the fire this time around, and one senses there is potential for a compromise on industry compensation – there’s no dispute over household compensation, which will be, in the proper sense of the word, fulsome – but not on the target Labor wants to set. Labor’s current position is to aim for two-fifths of stuff-all. Or, on a per person basis, three-fifths of stuff-all. It’s a splendid recipe for a significantly warmer planet.
And don’t forget, in both 2007 and 2010, the major parties went to the election promising essentially the same policy. First it was an emissions trading scheme. Then in 2010 they both walked away from promise and instead promised direct action — of equally silly, winner-picking “soil carbon” or “cash for clunkers” varieties.
Unlike the flood levy, we’ll probably still be talking about carbon pricing in four weeks’ time. But don’t get carried away with the headlines and delighted media coverage of fiery debates. There may yet be less to this than meets the eye.
Well, that’s a nicely ‘balanced’ narrative.
Everyone should be happy with this. Those who believe climate change is the greatest moral challenge of our time can be happy that we’ll have a price on carbon. Those who believe climate change is crap can be happy that it will be done in such a way as to have no impact on anything whatsoever.
The reversal of a promise should be a non-issue. Labor was not elected to government, so none of its promises were mandated. A combination of Labor, Greens and independents (one of whom is quasi-Green) turned out to be elected into government, so the only promises that matter now are those that were made between the election and the formation of government.
Pricing carbon, in principle, is not the issue. Enough voters feel strongly about this for it to have been a major factor in Labor’s failure to win the election outright. The rise of the Greens in the next coming Senate was in part caused by Rudd’s compromised and aborted carbon pricing model. Two party leaders were toppled within a six-month period; one of them for sticking to his beliefs at all costs, the other for abandoning his beliefs for the sake of his vanity.
The issue is how the carbon pricing is done. It’s fair enough that the entire pricing system and level has yet to be worked out. They should have been equally reticent about the compensation arrangements. But they just couldn’t help themselves. Already they’re promising that business compensation will be selective, and household compensation will be means-tested. Both of these defeat the whole purpose, and reinforce the anachronism of a party that embraced classical liberal theory years ago but just couldn’t stop playing favourites towards voting segments and big businesses.
FREECOUNTRY, as you indicate correctly in our opening comment, the PM didn’t lie – she broke a promise.
And the other issue, as far as I’m concerned (though I’m hearing remarkably little reaction to this) is that there are enough inefficiencies in our tax system already, as highlighted in the Henry Tax Review, for the carbon tax to simply replace its equivalent revenue in company tax and leave us either no worse off, or even better off. Make that better off, if we’re smart enough to tax high-emission imports and avoid taxing exports (solving the “carbon leakage” problem). And to put it to the Greens and Labor: if they’re not even prepared to sacrifice their their anti-uranium, anti-nuclear, anti-clean-energy Ludditism, then what do they think their chances are, asking the rest of us to sacrifice anything?