Carbon tax saves Gillard (for now)


My most recent Eureka Street articles on climate change policy (Celebrating the carbon tax and Gillard's climate coup) set out reasons for my optimism that, following the formation after the 2010 election of a minority Labor government under Julia Gillard which owed its continued existence to the support in Parliament of the Greens and Independents, Australia would at last be able to make progress towards legislating a carbon pricing system.

The arguments of those two articles have been borne out by events, though only after the real danger of Tony Abbott's 'stop the carbon tax' campaign, which seemed to be gathering public momentum, was surmounted.

In recent months, under Greg Combet's quiet but deft policy leadership, aided by Ross Garnaut's and Christine Milne's authoritative public education on the real issues, Australia has at last, after 17 years of debate, reached 'the end of the beginning': 18 bills have been drafted expressing the present Labor-Greens-Independents policy consensus that a carbon pricing system be put in place, to commence in July 2012.

These bills will now have a month of debate in each House of Parliament. Barring the unforeseen, they will become law in October. The Greens and Independents will support these bills.

The bills will set in place a carbon tax on about 300 firms (Australia's top emitters) for three years at an initial price of $23 per tonne of CO2 emissions. There will be fiscal compensations for lower-income taxpayers affected by public pricing knock-ons from this tax.

The tax will start the process of moving Australia from a high carbon burning, inefficient economy to a more efficient, lower carbon burning economy. It will be replaced by a carbon trading system in three years. (Negotiations have begun for Australia to possibly join the existing European Union carbon trading system).

Wisely, Gillard and Combet are addressing the large raft of climate change policy issues step by step, with the core issue of carbon pricing being tackled first. There will be later separate legislation on compensation for the beleaguered domestic steel industry, and on renewable energy targets and government incentives, where the Greens have more ambitious ideas than Labor.

I sense the Australian electorate is now resigned to the inevitability of this policy reform. The scientific evidence of manmade climate change continues to strengthen. The Tony Abbott campaign of fear and negativism peaked a few months ago. It lost momentum with the failure of the Convoy of No Confidence and a public turning away from the extremism and hysteria of radio shock jocks.

Abbott then turned down his carbon tax rhetoric. He will find it hard now to wind it back up again.

Also, the public attention caravan has moved on. Labor has secured important allies in industry and the trade unions. The carbon tax issue has been displaced in public debate by a media and public focus on three issues above all: the Craig Thomson affair, the offshore processing of asylum seekers, and fears about effects on Australia of the shaky global economy.

As journalist and editor Rob Burgess has noted, though Gillard's leadership has started to come under pressure, no one in Labor will want to try to overthrow her until its carbon pricing laws package securely in place. No new leader would want to go to a 2013 election with no progress made on climate change policy since 2007!

This means, effectively, no challenge to Gillard before the first half of 2012. If opinion polls keep trending down, Gillard may by then be vulnerable.

On the other hand, with the carbon bills finally passed and other things happening in the economy and politics, her standing relative to Abbott's might have begun to recover by then. I sense Abbott's indiscriminately negative high-pressure style of politics is a wasting asset that may alienate more voters as time goes by.

There will be important issues for Labor to resolve with the Greens over renewable energy policy, and with Tony Windsor and Rob Oakeshott over inland agricultural water supplies and fears of catchment pollution from coal mining and coal seam gas extraction. But the carbon price legislation will not be hostage to these issues.

Labor now has just two nightmares: that the Craig Thomson affair may spiral out of control, or that a global economic crisis may erupt on the scale of the 2008 GFC. (Maybe a third: that Andrew Wilkie might paint himself into an inextricable corner over his proposed gambling laws.)

Refreshingly, the carbon tax is no longer the crisis of the day. 

Tony KevinTony Kevin is the author of Crunch Time, a book exploring Australia's inadequate policy responses to the climate change crisis. 

Topic tags: Tony Kevin, Julia Gillard, Carbon tax, Climate change



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Existing comments

I fail to see why any "carbon tax" will be helpful to Australians. A new tax will further increase the cost of living on the poor and families. Who benefits from this largesse. The money will disappear into someone elses' pockets from the pockets of taxpayers least able to afford any further incursions by the government to transfer wealth from those who need it to some new entity. Why does anyone believe in Climate Change? There is no provable evidence of so-called 'Man-made' destruction of the world. A lot of lies have been told about this subject. The people of Australia won't benefit, so to whom is this new windfall tax going to go to, that deserves the money more than the hard working Australians who work for their money, only to have it snatched from them by one of the worst and incompetent, inept governments of Australia of all time.
Trent | 14 September 2011

'Refreshingly, the carbon tax is no longer the crisis of the day'. Nor, hopefully, will the NBN be in doubt. Not a bad pair of achievements from a minority government.
Ginger Meggs | 14 September 2011

Tony may be right in saying that the carbon tax is not the crisis of the day but it will remain the crisis of this government for two reasons Firstly Australians expect and demand to have a say ,we are supposed to be a democracy ,we do not expect to be lied to on such massive issues as the wealth redistribution as in this bill and the restructuring of our society that will result from the changes ,mainly offshoring ,that industry will have to make .Not only did we not get to vote but the arrogance of the government parties in negotiating in secret and then making no attempt to explain how it is expected to work to the public that they look down on will bear deep consequences when we do get a say .if you want evidence just look at the hollowness of the paper that was mailed to each of us . Secondly it will not work to reduce our CO2 as we must . By targeting the power sector where the technology does not economically exist ,the manufacturing sector where offshoring will reduce Australias but not the worlds emmissions and crazily exclude the vehicle sector where the technology does exist and change could occur quickly and where we lag the world we must be conviinced that only people as unworldly as the greens had to much say . Tony I think you are not aware of the deep seated concerns of the Australian people ,this is not a fight with Abbot or a few commentators but a fight with us.
john crew | 14 September 2011

Hopefully this carbon tax will work out, and not alienate too many people have no idea about climate change. Tony A is certaily alienating people with his negativity. we have yet to here him suggest a rebuttal. It would have been good to get those mining contributions of a few months ago. I remain very ashamed of our refugee policies.
Jenny Martin | 14 September 2011

Well said, Tony. Please note that, as usual, the woman who is our PM keeps her position because the little blokes in the back room don't actually want the hot seat right now.
Moira Rayner | 14 September 2011

John Crew, the mining industry is a greater threat to the Australian manufacturing industry than the carbon tax will ever be. Go read 'The Glugs of Gosh' by CJ Dennis.
Ginger Meggs | 14 September 2011

What bewilders me though is why she has to be so far to the right of Howard in her abuse of refugees and why she thinks she has to sell out the country by trading and trafficking humans in a policy without a friend. How she can so waste and excellent ALP platform on such egregious human rights violations is sickening but I expected no more from her. And Trent, your argument is entirely specious because otherwise we have an exponential growth in CO2 poisoning which kills soils and their ability to grow food - not the CO2 of course but the heavy metals that are part of fossil fuel burning, we will have more undrinkable water and dirtier air which leads to more health problems.
Marilyn Shepherd | 14 September 2011

I would be very surprised if the majority of Australian people ever forgive Gillard for her duplicity. Her various attempts at casuistry to explain here about face on "There will be no carbon tax under a government I lead" are just not cutting ice with most Australians. She will deservedly pay for it if she is around to lead Labor to the next election.
John Ryan | 14 September 2011

Forget about who said what when! We know it is the right policy for the right reasons. When will it ever be the right time? If the carbon price scheme is designed well, the compensation package for low income earners and trade exposed industries will be sufficient to not leave them out of pocket or make them uncompetitive. Once underway, it can then be adjusted to make sure that it is adequate.
We can then decide to invest some of the returns in future technologies. We could come out of the global downturn with the new high-tech sustainable industries that other countries are investing in. We should be part of that new world. Yes some older energy-intensive industries may move off-shore, but they may do so anyway. We can and we must develop new ones to replace them via this tax and other support policies.

Let's look forward with confidence rather than waiting for someone else to lead. They will lead, but they won't lead us out of the problem we have with our old industries relying on old technologies in a world that one day will be embracing the new solutions that others will be selling, not us.
Pat Love | 14 September 2011

It is not a carbon tax. It is a price to stop excessive pollution.

Marilyn Shepherd | 15 September 2011

Well said Ginger Meggs. So much of what's wrong with Australia has been said long ago, in the "Glugs of Gosh" and in "The lucky Country" for instance.

Jim Jones | 15 September 2011


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