The Socialist dream of controlling the energy supply is dying – along with Socialist governments
No point in just changing the driver
BY: CHRIS KENNY
Cartoon by Bill Leak. Source: The AustralianLABOR’S leadership conflagration is likely to be as pointless as it is spiteful. Arguing over whether Julia Gillard or Kevin Rudd should lead the ALP to the next election is a bit like debating whether Thelma or Louise should be in the driver’s seat — when the car is going over the cliff anyway.
Video dirty tricks, open revolt, polling at record lows; the government is in a terminal mess. Pre-eminent among its woes is the carbon tax. Yet both Gillard and Rudd are ill-equipped to deal with it because both made their most credibility-sapping mistakes on climate-change policy.
The futility of the situation is laid bare when you learn that while the upper echelons of Labor are preoccupied with introspection, the Liberal Party is working on a campaign to mark the introduction of the carbon tax in July.
A senior strategist has confirmed it will include television advertising as well as material for distribution by MPs. “The carbon tax remains a red-hot issue,” the strategist said, referring to internal research. “The cost-of-living impact on family budgets is the No 1 issue, and it has already been fuelled by electricity bill increases.”
The research has identified high community anxiety about the global economic outlook. Despite pleasing unemployment figures, job insecurity is being fuelled by worries about Europe and job cuts at iconic companies Qantas and Billabong. Unsurprisingly the research also identifies voter concern about the government “drifting” and being self-absorbed.
Tony Abbott’s daily efforts to link the carbon tax to every morsel of worrying economic news have already been devastatingly effective. Mind you, it is, of course a gift.
Voters understand that the carbon tax is a deliberate additional impost on business. So Abbott doesn’t need to explain it or misrepresent it. He just has to question the government’s wisdom in imposing it.
This is made even easier by Gillard’s promise never to implement such a tax. A government that has broken faith with the public, and has had a series of competency issues, is asking to be taken on trust with the introduction of a vast new taxation scheme.
In parliament, Gillard said she was “disgusted” that Abbott would link job losses at Alcoa to the looming carbon tax. She quoted the company’s other cost pressures: high dollar, expensive inputs, and low-end prices. Yet this defence doesn’t help her case because it simply begs the question — if the commercial pressures are so intense, won’t an extra tax make things worse?
The carbon price is designed to create structural change, so few industries could expect a higher impact than the energy intensive aluminium industry. Which is why Treasury’s modelling shows aluminium production will be 60 per cent lower than business-as-usual by 2050.
So, forget about the unintended consequences of the tax. It is the intended consequences that worry people.
And on this score, Labor often seems to be arguing against itself. From one corner of its mouth it tells us the carbon tax is designed to shift investment and jobs away from the dirty industries (such as, for instance, the car and aluminium industries). Yet from the other side it promises to find yet more taxpayers’ money to subsidise and protect jobs in dirty industries (such as the car and aluminium industries).
The carbon argument has been made increasingly difficult by the lack of international progress. The US and Canada have rejected carbon pricing, and, while they are toying with fig-leaf initiatives, none of the developing countries is imposing an economy wide price. The European scheme, along with the European economic outlook, is barely clinging to life. At around $10 at tonne, it is less than half Australia’s starting price of $23.
From July, Australia will be out in front of the world on carbon pricing, which will see us feted at international green conferences, but expose our economy to sizeable risks.
As leading business figures are openly pointing out, this is simply not a smart place to be.
While the global economic uncertainty makes it a particularly risky and difficult time for our businesses to deal with the tax, it also diminishes the imperative to act. The OECD measured how the GFC kept a lid on worldwide emissions growth in 2009. Now the European recession and slowing global economy will keep emissions growth in check for at least a year or two.
So there are sound political, economic and environmental justifications to delay, if not discard, the carbon tax.
It must rankle with Labor now to recall that Gillard found the ideal climate change position before the last election. In a major speech, mocked for its silly citizens’ assembly idea, she focused on the preconditions for a carbon pricing scheme — international and domestic consensus. She threw forward to a review that would be conducted this year and partly informed by “the dimensions of international action”.
“This means I will act when the Australian economy is ready,” said Gillard, “and when the Australian people are ready.”
How such an obviously sensible position could have been trashed post-election is a mystery. But it probably gives the lie to the suggestion that Gillard is a master negotiator. More likely she just gave Bob Brown what he demanded — for no tangible gain.
With the distance of history we will look back on the past five years of national affairs with astonishment that here, on a continent with a climate as relatively benign as our politics, five leaders sacrificed themselves on climate-change policy.
John Howard and Brendan Nelson were burned for not genuflecting to climate concerns, Malcolm Turnbull upset his followers by converting to the global warming faith, Rudd lost his flock by denying the carbon cause even before the cock had crowed, and Gillard lost all but the true believers when she professed agnosticism, then acted like a zealot.
If and when Rudd returns, the carbon tax will be sitting there waiting for him. The only decision that holds any electoral hope for Labor is to delay or discard the tax.
The diabolical quandary for the ALP is that neither Rudd nor Gillard has enough credibility on climate change to withstand another backflip. Most likely Rudd would stick with the tax and become the first prime minister dispatched twice by the same policy challenge.
So the right carbon-tax policy relies upon an unlikely third candidate. And as all this unfolds, voters will just want a fresh election. Like Thelma and Louise, Labor has no way back and no way forward.
The Austrlaian
