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carbon tax: ALP's neck on line « Previous | |Next »
July 10, 2011

The Gillard Government's carbon price deal was announced today. The $23 per tonne price er tonne price, which kicks in on July 1 next year, is a modest start to a "clean energy future" as it not a sufficient incentive for new investment in clean energy, which becomes competitive at $40 or more.

The 500 highest polluting businesses will pay the carbon price - which will increase by 2.5 per cent above inflation until July 1 2015 when a market-based emissions trading scheme will kick in.

PettyB bigpolluters.jpg

There is compensation everywhere. There is $9.2 billion over three years for trade-exposed industry, with emissions-intensive industries such as aluminium, zinc and steel manufacturing getting more than 94 per cent of their carbon permits for free. There is a $300 million package to support jobs in steel manufacturing by encouraging innovation, and another $1.3 billion towards rewarding coal mines that reduce their emissions.

The burden of taxation is shifted from individuals, communities and jobs to dirty industries in order to encourage greater resource efficiency and minimise carbon pollution.

Some 90 per cent of households will get tax cuts and/or extra payments. Though the introduction of a carbon price will cost households an extra $9.90 per week on average, the average assistance will be $10.10 per week, according to the Federal Government's modelling. Gillard will use the carbon tax to usher in tax reform, tripling the tax-free threshold to encourage low and middle income Australians into work while shielding them from price rises.

There is no doubt that this plan will get through the Parliament.

Will it help Labor get re-elected? To survive the next election it will have to win seats. So it has to protect itself by avoiding consumers finding themselves out of pocket, coal mines and steel plants closing, and the lights going off if the generators shut down? To survive the next election it will have to win seats. So the scheme's design aims to counter Abbott's political scare and the alarm of industry facing pressures arising from the high dollar and weak domestic demand.

In The Australian Paul Kelly says:

Much of Labor's problem lies in the climate change lobby and Greens that define this issue: for too long they patronised people over climate change "virtue", championed schemes that were rip-offs and were contemptuous of legitimate public concerns about higher power costs, jobs and competitiveness. Seen in context the public backlash is completely understandable. Abbott was handed a political opening and he made the most of it. The backlash Abbott now cultivates is deeply embedded. It will not easily fade because it reflects underlying cultural and economic forces. It is by no means obvious that the public, when it sees the details, will say: "OK, we're now reassured."

Labor’s re-election will rely on its ability to sell the package and implement it. Abbott campaigns against Labor adopting the mode of a traditionalist Labor leader, his aim being to smash the post-Whitlam voting alliance that has made Labor successful in recent decades. So Abbott chases the blue-collar, manufacturing, resource industry and lower-middle-class ALP vote and his appeal stretches from an update of the Menzian "Forgotten People" to hip-pocket resistance to new taxes and hostility to green philosophy.

| Posted by Gary Sauer-Thompson at 7:10 PM | | Comments (5)


Watching first Julia and her colleagues, then the Greens and then the 2 Indy's, I allowed myself some optimism today.
I know the OO and the ABC and the MSM, on behalf of the polluters, will slam the package to breakfast and back again but the unity of those 3 groups, their responsibility and, dare I say it, professionalism contrasted so starkly with Abbott's shock and terror and fear tactics that I suspect, hope really, that this is a positive move for the government and Ausralians and the COALition will be seen as 'the odd [very odd] man out".

One thing the progressives have going in their favour is the ability to point to a conservative Tory UK govt which has trailblazed the way for Oz.
It cuts the ground out from under Abbott and the OO's feet.

Thats my understanding anyway, but I do find it difficult to understand why the Tories came up with such an apparently sensible scheme.
Any chance of a potted history?

Successfully re-invented fiscal stimulus, have they?
And no Murdoch press to wipe it out, as the London antics again remind aussies of just what a garbage operation it is (as Rowson reminded us, a month back).

something had to be done.

Australia is the developed world's worst per-capita greenhouse gas emitter because of its heavy reliance on cheap coal for power generation. Emissions are likely to rise in the booming economy without a carbon tax.

David Cameron is treading faithfully on Margaret Thatcher’s pioneering path.

Thatcher got her degree in chemistry in 1947 from Oxford and went on to work as a research chemist before becoming a tax lawyer and, eventually, a politician. She understood the science and was the only world leader to be a trained scientist.

Thatcher backed Dr John Houghton, then head of the UK Met Office., in the setting up of the UN's Intergovernmental Panel on Climate Change (IPCC) in 1988, and promised the Met Office lavish funding for its Hadley Centre, which she opened in 1990, as a world authority on "human-induced climate change". The latter's climate projections underpinned the Stern Review on the Economics of Climate Change.

She changed her mind in 2003 in her last book Statecraft.Thatcher devotes ten pages to the subject of "Hot Air and Global Warming" (pp.449-58) she is quite clear that she feels things have gone in the wrong direction. Climate change does not mean the end of the world; nor does it mean the end of free-enterprise capitalism. She is opposed to "green socialism"

Cameron, unlike Tony Abbott, obviously accepts Thatcher's position that "science has to be the foundation of our common efforts to understand the problems and to deal with them."

Abbott distrusts climate scientists and economists, and has a long-standing suspicion of Treasury modellers as well.