CANBERRA OBSERVED: by national correspondentNews Weekly
Julia Gillard face wipe-out on her "carbon" tax
, April 30, 2011
With opinion polls showing a further swing against Labor, the Gillard Government’s bid to impose a carbon tax on the Australian people is shaping up as an almost impossible mission, with even the Labor Party at war with itself over the policy.
2011 was meant to be Julia Gillard’s “year of decision and delivery”, but the carbon tax is joining a raft of other major Rudd/Gillard policy proposals in health, taxation, water policy and immigration that are heading toward a quagmire of indecision and crippling compromises.
The Australian Workers Union — a union which had a pivotal role in installing Ms Gillard as Labor leader last year — has declared it will not support the new tax if it causes one job to be lost.
Given that the whole idea of the tax is to eliminate so-called “dirty industries”, it will be impossible for the government to comply with this ultimatum.
AWU secretary Paul Howes, who issued the warning, has either decided the carbon tax is a dud, or he is giving Ms Gillard a get-out-of-jail-free card. Of course, it could be both.
The nature of the Australian polity is that it requires a fair degree of consensus-building, though not necessarily bipartisan support, before a major policy change is introduced. If no such support exists, such as in the case of most referendums or the Howard Government’s WorkChoices laws, then such proposals inevitably fail.
At the moment, the Labor Party does not have the support of the people. Business groups and the unions are either ambivalent or outright hostile to the tax. Support from the independents, particularly Tony Windsor, is no longer guaranteed.
Tony Abbott is spearheading a strong campaign against the tax from the Opposition benches. And there are elements in the Labor Party — even inside Cabinet — who wish the tax could somehow be mothballed.
Major policy changes also need a period of soil-tilling to convince the people that the change is necessary. It requires the Prime Minister of the day or the respective minister to prosecute the case for change.
Instead, on February 24 this year, Ms Gillard decided with little warning to announce a tax on carbon emissions — in spite of a promise not to do so before the last election at which she received a minority of votes and seats in the federal Parliament. And, if we are to believe Kevin Rudd, in spite of urging him to dump it completely not 12 months previously.
Ms Gillard’s decision was not based on environmental imperatives, but as a political fix to placate the Greens who are soon to hold the balance of power in the Senate, and to persuade Labor voters concerned about global warming to come back to the fold.
Ms Gillard has virtually admitted this, explaining her broken promise was a result of changed political circumstances.
As a political move it has been nothing short of disastrous. The canny Greens leader, Bob Brown, appropriated the credit for Ms Gillard’s tax and his support has subsequently increased, while Labor’s support has fallen even further as more everyday Australians shift their support to the safety of the Coalition.
Subsequently, the Government has tried to “win over” low to middle income-earners by promising that 50 per cent of the taxes raised will be returned to them, thereby offsetting, and in some case exceeding, expected higher energy costs. The rest of the taxes raised will go toward helping the industries which will be harmed by the new tax.
The problem for the Government is that none of this enormous “churn” of taxes and subsidies will do anything for global warming. Even the most ardent believers in anthropogenic global warming concede this. Tim Flannery says it could be 1,000 years before the planet reaches carbon dioxide equilibrium, if any such condition is actually achievable.
It cannot argue that Australia has to keep up with the rest of the world or lead the world because no major carbon dioxide emitting nation is adopting a similar policy.
Its only argument is that Australia must move toward a “carbon-free” economy — in other words, drive up the cost of electricity with an artificial tax to enable investment in low-carbon energy to be feasible. Once this happens, investors will be willing to build solar, wind, hot rock and other innovative generation techniques.
Thus, in a few decades, Australia will be a “leader” in the new low-carbon world economy.
Meanwhile, the prosperity of the nation depends on the continued ability to export coal and gas and iron ore to Chinese and Indian manufacturers who will increase their output of CO2 by using our products.
In short, this policy involves a lot of hope and grandiose promise, but not a lot of tangible benefits or common sense.
The Australian electorate is innately sceptical about symbolic political gestures, and even Ms Gillard must now be wondering whether it was worth resurrecting the policy she tried to kill.