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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.
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.
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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?