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Carbon Tax Axed – sellout or smart politics?

From The Age we learn that Rudd dumps Gillard’s carbon tax. Then Treasurer Chris Bowen confirms Government will scrap carbon tax for floating price.

Ok, the headlines are telling us that Labor have “dumped, “scrapped”, and many other words which mean that it’s gone. Predictably the Opposition is outraged. No, it’s not really gone. It’s still a MASSIVE cost to you all. And, BTW, this decision will cost the Budget $15 Billion.

Um, so let me see if I have this right? It’s still too much, but we can’t afford to scrap it. I’m a little confused by the message from the Opposition, but never mind, I’m sure they’ll get their act together and tell us exactly why this decision was wrong.

In the meantime, let’s have a look at what’s actually happening. Rudd is bringing forward the date of moving toward an emission trading scheme from July 2015 to July 2014. This will mean that the price paid drops to around $6 a tonne. Of course, we can’t say exactly what it’ll drop to, because the price will be determined by the market. At the moment, because Europe is still suffering the effects of the GFC (Yes, Tony, I know that the GFC finished in 2007), the price is low, but in twelve months time, this price could be slightly higher than the current $6. Or lower. The price will be determined in a year’s time and as Yogi Berra said, “Predictions are hard, especially about the future.”

Will this decision make a big difference to the overall impact of climate change action? I suspect not. For example, people and companies who’ve installed solar panels on their roof aren’t going to rip them off. Institutions that have found ways of saving energy aren’t likely to say, “Wow, let’s leave the lights on overnight, just so we can waste electricity because it’s so much cheaper.” The Carbon Tax has had some effect on people’s behaviour, and while the incentives won’t be as strong from July 2014, we were always moving to an emissions trading scheme at some point. One year earlier isn’t significant when compared to the Opposition’s policy of no disincentive at all.

I’m sure that some will argue that this is a “backdown” and that Rudd is selling out, but given that an emissions trading scheme was the policy that he took to the electorate in 2007, he can certainly argue that this is HIS policy and that he’s moving from that “awful” carbon tax to a plan that we voted for – only to have it blocked by Abbott. In fact, the Liberals went to the 2007 election promising that we’d get an emissions trading scheme, only to block it in Opposition. Where were the complaints about broken promises and lies then?

So, will this prove smart politics by Rudd? He’ll cop some flak from the Greens and those of us who genuinely want to see action on the environment, but politically, that won’t necessarily be a bad thing. In the end, most of those voters will drift back to Labor via preferences. And the part of Australia who’ve been listening to Abbott’s mantra about the Carbon Tax being too expensive and that Labor is captive to the Greens (Ha!) will get the impression that Rudd has taken decisive action. The Liberals are saying that this just proves that they were right all along, but claiming credit has rarely meant much in politics. Abbott complained for three years; Rudd came in and “fixed” things. And that’s the problem for the Liberals now: They’ve spent three years ruthlessly attacking Julia Gillard, and when most people think of Abbott they think of the “Dr No” persona. Turning the attack to Rudd creates the impression that all Abbott does is whinge.

Being a winning Opposition Leader is hard. We’ve only had five successful in the last fifty years. None since Gough Whitlam were Opposition Leader at the previous election. And he had a positive agenda, and a promise to end an unpopular war. Abbott had a promise to end an “unpopular” tax. Now he has a booklet and a scowl. It may not be enough.

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