Wednesday, July 13, 2011

Carbon Tax

This column was originally printed in the Canberra Times (CT) on Tuesday a week before the Carbon Tax (CT) was announced.

(Oooh, how spooky . . . the initials of both institutions are "CT"! Is there a link? Think about it! I note that the plan was also announced after the 6th/6th. Is it the work of Satan? Probably not, although you wouldn't know that to listen to the outrageous hype being encouraged by some of our politions at the moment.)

Here it is . . .


It rained on Sunday night. Heavily. Snow’s back on the mountains and we're enveloped by cold. It's almost as if the weather is actively conspiring against the government, somehow managing to suggest by a brief “rainfall event" that climate change isn't real, after all.

Fortunately, evolution has allowed us to keep records. This provides a means of separating the immediate environment from the long-term trend and the picture that emerges from these is quite different. Last month witnessed the driest June in a quarter of a century. Only 9 millimeters’ of rain was recorded at Canberra airport, making it as parched as any month since January last year. The Bureau of Meteorology says even the crisp frosts that covered our lawns with white to greet us in the morning came as a result of the extra sunshine, about half an hour a day more than our long-term average. So, even though the dry air and clear skies so sent us shivering to bed at the end of the month for a crisp run of five nights all reaching -3°, the facts consistently support the reality of climate change. And, despite (then) Deputy Prime Minister Julia Gillard's earlier, successful attempt to encourage (then) Prime Minister Kevin Rudd to indefinitely postpone any action to decrease CO2 emissions, the political climate for action on the issue remains fertile.

It's just that we want to be sure that anything the changes won't hurt us individually, that they will have an effect, and that they won't cause significant damage to society. Political wisdom has it that nobody likes change, but that's not necessarily so – just look at the record. During his period in government John Howard introduced two massive changes to the way the country worked. The first, the GST, was passed through the Senate in a modified form with the assistance of the Democrats. At the time, Labor vilified the tax, promising to “roll it back". They couldn't, of course, and we now accept the GST because it was, just as Howard insisted, good policy.

The Liberals other attempt to introduce change, WorkChoices, wasn't successful. This was undoubtedly a factor in Howard's 2007 loss, but it wasn't the only one. By then the government was old. It was facing a new and invigorated opposition and, at that time, the country was in the grip of drought. Howard no longer seemed to have the answers for the problems facing Australia. That's why, with another major policy change on the way, it pays to look at the links between Labor's climate change package and the GST. It helps show us how the political dynamics are likely to play out over the next couple of years.

Firstly (and make no mistake about this) nothing will repeal the changes that are about to be made. If the government sits (as can reasonably be expected) for a normal term, the new tax system will have become institutionalised. Promises to tear it down and roll it back will threaten chaos. All the noise will soon be dismissed as the ridiculous ranting of a child, because long as the Greens control the balance of power in the Senate, the tax will stay. Double dissolutions hold no threat to the minority party, which would be expected to at least keep and probably increase its representation in the upper house. Unless Labor's vote utterly collapses, or the party reneges on its commitment to support the tax (neither possibility can be completely excluded), the tax is here to stay.

The second issue – and this will have the most immediate effect on the government's fortunes – will be the extent of the changes. There are times when it's best to go for the dramatic. What the government needs to do is assure people that it is acting with some overall purpose, and that's why Gillard's comments about not changing the tax rate of fuel demonstrated yet again her unerring instinct to botch selling the message. Promising to leave petrol browsers untouched will help the party in the outer suburban seats where it urgently needs to make up ground. It doesn’t, however, boost the credibility of the overall package. It looks like what it is: a political fix. Labor has gambled on the (eminently plausible) assumption that the hip-pocket nerve is stronger than most drivers’ desire to reduce the amount of fuel they use. That's fair enough, but why the PM suddenly chose to blurt out her news on the weekend as an exclusive for a little-watched television programme, rather than as a major policy announcement, demonstrates again that the government's too busy trying to finesse its message rather than concentrating on selling an overall package.

It is one of those instances where the bigger the change, the better. Unless the government manages to convince a significant group of people that they are better off as a result of the changes, it can kiss goodbye to any prospect of another term. Leaving voters untouched will not be enough, by itself, to turn around the dire political situation in which the government now finds itself. Labor requires people to “buy-in", to have a vested interest in backing the policy. Until we see and digest the final shape of the change that has been introduced it won't be possible to analyse whether the new package is significant enough to reach out and create the momentum it will need for popular approval.

The government understands that the support of those who believe in climate change won't, of itself, be enough to change the political dynamic that is already at work. That's the argument for greater change. The swinging voters need to be thrown a bone if they are going to be brought on board. The only problem is that these people are ravenous beasts. Their hunger won't be appeased by attractive dressings, no matter how prettily arranged on the plate.

Labor is down in the polls and can't afford to sacrifice another leader. It's got to actually do something – avoiding action is not an option. The irony is that the bigger change has now become the less risky option. Whether the government has the courage to choose to act is another issue altogether.

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