A friend this morning said to me – “But it’s not actually a carbon tax is it?” He’s right – it is not.
Here’s what Gillard announced last week:
Broad architecture of the carbon price mechanism
A carbon price mechanism could commence with a fixed price (through the issuance of fixed price units within an emissions trading scheme) before converting to a cap-and-trade emissions trading scheme, with the following broad architecture.
You see it is not actually a Carbon Tax. It is an Emission Trading Scheme with a fixed price. Now sure Gillard has admitted that it is effectively a tax – mostly because, as she said to Laurie Oakes, she didn’t want to get into silly word games:
PM: …. I have agreed that we would start with a fixed price and then move to the full emissions trading scheme.
HOST: And you have agreed that the fixed price is the same as the carbon tax?
PM: Laurie, I didn't want to get caught up in what I knew would be one of those semantic word games about whether or not I would say the word ‘tax’. You know how these games are played, Laurie. A politician decides they are not going to say a word, and then media, people like yourself, Laurie, spend weeks trying to make them say it. I wasn’t going to do any of that.
Personally I think she should be keeping to the line that it is an Emissions Trading Scheme with a fixed price, because that would be strictly accurate. But she is most likely right that journalists would spend weeks trying to get her to say tax, and given the bullshit the ALP went through with “deficit”, she is best to say it and cop the flak.
To be honest she did make this point in the press conference announcing the move to a carbon price. She was asked by a journalist (Michelle Grattan from memory):
JOURNALIST: Ms Gillard, you say the architecture is hard wired to go to a market model, but isn’t it also true that with your long term move to the market and the possibility of deferring, it is possible that you could not have a market model at all, even under a Labor government?
PM: If we can just back up that truck a little bit, because in the fixed price period this is still a market model, it’s a market model in the sense that there will be permits that have a price, so it is a market model, it’s ready to go and it’s hardwired to go to a cap and trade scheme. So that is the default, if you like, that’s built into it. Yes there is a review, 12 months in advance, so that the assessment can be made as to whether anything else needs to be done, but that’s the default that’s built into it.
So again, it is not actually a tax. It’s not like a tax on alcohol or cigarettes because you can’t trade in permits of alcohol or tobacco. It’s not as though if some company can agree to forego producing alcohol then can sell the amount they forego to Fosters. The tax on alcohol and cigarettes is not done to set the amount of alcohol or cigarettes in the community at a certain level: it is done a) to raise revenue, and b) (especially in the case of cigarettes) to deter people from smoking through the prices being higher.
It does not raise revenue like a real tax because all the revenue will go towards “assisting households, to helping businesses transition and to programs to tackle climate change” – things that would not be done were it not for the money raised from putting a price on carbon in the first place.
So if you hear anyone say it’s to help pay off debt – tell them they are slightly wrong – and by slightly I mean totally. A price is placed on carbon to deter consumers using carbon polluting heavy products, and also to encourage producers to seek less heavy carbon means of producing their products; but the price is set so as to also set the amount of carbon produced. Today on AM the PM made this point quite well (though it won’t count for much I guess):
ALEXANDRA KIRK: So your problem is that you've had two opposing positions on carbon tax. The fundamental problem is that you broke an election promise. You said before the election there will be no carbon tax under a government I lead, and now you've shifted your position. So you don't have a mandate for a carbon tax.
JULIA GILLARD: Alex, we went to the 2007 election saying we had to price carbon and the best way of doing that was an emissions trading scheme where the market sets the price for carbon.
ALEXANDRA KIRK: But you went to the last election…
JULIA GILLARD: We went to the 2010 election saying we need to price carbon and the best way of doing that is an emissions trading scheme where the market prices carbon. What will we deliver? An emissions trading scheme where the market prices carbon.
Yes, there will be a period where the price is fixed, effectively like a carbon tax. But we will end up exactly where we promised Australians we would go.
Journalists, commentators and Liberal Party supporters would like us to believe that somehow Gillard dumped the idea for a price on carbon at the last election. She didn’t. It was there – the problem for many (including me) was she was going to take too long about it and was setting up a dopey citizen’s assembly to discuss it. Gillard may have ruled out out a carbon tax (a dopey statement for her too have made, I believe) but she never ruled out a price on carbon.
Howard didn’t go to the 2004 election promising Work Choices; but we knew he was in favour of deregulating the labour market (code for trying to kill off the unions). The conservative side like to make a big deal out Howard’s honesty in taking the GST to the election, but they also like to ignore the WorkChoices aspect. In reality the WorkChoices line is more akin to the Carbon “Tax” than the GST line. Howard was in favour of labour market ‘reform’; we just didn’t know it would be WorkChoices. Gillard was in favour of a carbon price; we just didn’t know it would be fixed for the first three years.
Anyone who thought Gillard was not in favour of a price on carbon wasn’t paying attention. Here she was in her climate change speech that got pretty wide reporting during the election on 23 July:
Adopting a market based mechanism to price carbon will transform the way we live and the way we work. Such a major change cannot be made and unmade on the oscillations of the political pendulum.
Instead this transformational change must have as its foundation the genuine political support of the community, a consensus that will drive bipartisanship.
To build that community attachment, here are my commitments.
I will prosecute, as Prime Minister, the case for action to reduce pollution and build a more sustainable Australia for future generations.
I will make the case in public and in parliament. I will lead the debate and lead the advocacy for our approach in the community.
She then goes on to talk about the Climate Change Commission which has been set up with Tim Flannery as its head, and the Citizens Assembly, which has been dumped due to the negotiations with the independents and the Greens and replaced by the Multi-party Climate Change committee (and lets be honest, no one thinks that was a bad decision). The big difference between her way of getting a price on carbon in the speech and now, is how she wanted to go about “building consensus” on the issue – which was always the weak aspect of policy – people want leadership not, tell us what you think and we’ll do it, maybe, sort of.
So back then she wanted a market based mechanism to price carbon. She is now suggesting a market based mechanism to price carbon that will be fixed for three years and then become variable. She is making the case in public and in parliament. She is leading the debate. She is leading the advocacy for the ALP’s approach.
Yep. To the barricades people, time for a people’s revolt.
I think it pays to be a bit sematic on this issue, because when it comes to complete and deep accuracy you’ll find that a lot of reporting on this issue has been found wanting.
Take the rather idiotic reporting of statements made by the head of the Australian Industry Group, Heather Ridout, today in The Australian by Sid Maher and Joe Kelly.
The bullshit metre was set pretty high with the headline (and yes I know journalists don’t write headlines)
Labor loses key carbon supporter Heather Ridout
When I saw this I thought to myself that it would be a big story if it were true, and also that it would be very odd for Ridout to have taken that position at such an early stage. I then saw it was written in The Oz and so I let out a sigh and assumed (correctly) that all we were getting was half of the story.
Maher and Kelly reported:
TONY Abbott has vowed to scrap Julia Gillard's carbon tax and demanded she seek a mandate for the plan as Labor's closest business adviser, Heather Ridout, refused to back the Prime Minister's package.
As the Opposition Leader labelled Ms Gillard a "fraud" for breaking her pre-election promise not to introduce a carbon tax, the Prime Minister branded Mr Abbott the most irresponsible political leader in 15 years over his vow to scrap the program.
But Ms Ridout, the Australian Industry Group chief executive, last night declined to back Ms Gillard's proposal to introduce a fixed carbon price from July 1 next year and an emissions trading scheme three to five years later.
"The jury is very much still out on the introduction of a carbon price in Australia, with industry very concerned about the competitive impacts," Ms Ridout said.
"In this regard, all options should still be on the table, including that of rollback until the final shape of the government's proposal is clear.
"While certainty is important for decision-making around major long-term investments, this certainty should not come at the cost of a loss of competitiveness that sends jobs and emissions offshore or risks the continuity of energy supply."
First off “refused to back” is not the same as Labor “losing” Ridout’s support – especially when you see her say “all options should still be on the table”. But while they have quoted Ridout correctly, they also failed to quote her fully – and thus ensured the context of her statements were somewhat (ok, completely) misconstrued. Here’s what she also said:
"It is too early to tell where the Government’s policy will land, with issues such as compensation for trade exposed industries, the carbon price and the initial coverage yet to be addressed. Uncertainties also remain regarding the details of the Coalition’s alternative plan. This is important because "roll-back" would be accompanied by "roll-in" of the Opposition's policy. At the end of the day, both sides of politics are committed to the same emissions reduction targets that are extremely challenging to meet and growing more so.
"It is business that will have to make the investments that move the Australian economy to a lower-carbon footing. Business cannot do so without knowing the rules that will apply. Full and proper consultation is essential from all sides of the debate to ensure that any scheme is responsible, workable and effective. Bipartisanship would be by far the preferred outcome," Mrs Ridout said.
The full context shows that she has not so much dropped her support, but rather, has said “it’s too early to tell”. And she’s right – it is certainly far too early for any head of any industry or company to start saying the scheme is good or bad. The problem for Ridout is she is a tad too intelligent for some journalists, who don’t (or can’t or won’t) grasp that not everything is black and white; for or against.
Over at the ABC on AM we had this heading:
Business leaders welcome Abbott's pledge to rescind carbon tax
Well again, that was not quite true. In fact, “not quite” is being generous. Again Heather Ridout was involved:
NAOMI WOODLEY: … She [Ridout] has also cautiously welcomed Mr Abbott's promise to wind back the carbon tax.
HEATHER RIDOUT: If the Government come up with a carbon design that's not going to work for Australian business and industry; that's going to send investment and jobs offshore; that's going to result in carbon leakage rather than us running a low carbon economy to the benefit of the whole world, well I think definitely we would have to say we don't like this policy, and therefore Tony Abbott's comments would be quite helpful in that regard.
Again, we see Ridout hardly giving cautious welcome at all. All she is saying is if the carbon design is total bollocks she’ll be in favour of it being rolled-back, which is not exactly surprising. Also not exactly surprising is getting Peter Anderson, the head of the Australian Chamber of Commerce and Industry to be agreeing with Abbott. That’s real knock me down with a feather stuff.
And that is “Business leaders welcome Abbott’s pledge to rescind carbon tax”.
Geez.
One other aspect that isn’t getting much airplay in all this talk of Abbott rolling back the carbon price, is just how is he going to do that? As Bernard Keane in today’s Crikey noted, the Greens will have the balance of power in the Senate for quite some time.
Here’s the Senate maths:
At the 2010 election the ALP won 15 seats, the Greens 6. The 15 seats was pretty dire for the ALP, so let’s not be generous and so assume they’ll win 15 again (and not 18 like in 2007). That would give the ALP and Greens together 36 seats. Meaning the Greens would only need to win 3 seats under that scenarios to have the balance of power locked in for another three years.
So rollback? Good luck Tony, all you need to do is get the Greens to agree to it, and you’re set.
On to QT:
Today was another short QT because once again after absolutely no momentum being built Abbott launched a motion to suspend standing orders so as to move a censure motion against Gillard.
Once again he was very shouty. Apparently this convinces people. I doubt it does. In fact I doubt much of any of what is happening in parliament on this issue is persuading or dissuading anyone.
The debate will be won or lost in the public arena.
It will require some very hard work by the ALP. For the ALP’s sake I hope most of it is done by Gillard and Combet. Swan should best keep to running the budget, and being out of the way. He also gets far too shouty when debating. Shouting is usually adopted by those who are worried they are not being taken seriously. The three biggest shouters in parliament at the moment are Abbott (by a long way) and Hockey and Swan jostling for second spot.
Combet on the other hand is very measured and lets his words, rather than their volume, do the thrusting. Yesterday he delivered this beauty:
Mr COMBET:… The Leader of the opposition has notoriously described the science as ‘absolute crap’. Indeed, Liberal Senator Cory Bernardi has argued that the science has been fabricated. Of course, Senator Minchin famously blamed it on the communists! But the Leader of the Opposition has come up with my favourite. He said the following back in November 2009:
If you look at Roman times, grapes grew up against Hadrian’s Wall—medieval times they grew crops in Greenland. In the 1700s they had ice fairs on the Thames.
That was the Leader of the Opposition. Given that he was not around those days, one would wonder what the authority is for that particular statement. It does not take long to find a very similar remark, and I will name the source in a minute:
There have been times when it is a lot warmer than now, when Greenland was ice free and you could grow melons in the open in England … and even in the 1600s when the Thames River in London froze over.
Where is it from? It is from the One Nation party climate change policy. The One Nation party seem very influential in the policies of the opposition. What a disgrace. You call that accepting public policy responsibility?
It does not take much more googling to find out where the concept of the ‘people’s revolt’ comes from either: it is the Tea Party, the far right of US politics. No ideas, nothing to say, nothing to contribute on one of the most critical policy issues that we face. On reflection, the stand-off that we witnessed between the Leader of the Opposition and Channel 7 journalist Mark Riley provided us with an important insight into what is going on here. He is all menace, all aggression, with nothing to say, no ideas—it is ‘no, no, no’— nothing to contribute.
Today he was having more fun pointing out what Malcolm Turnbull had to say on QANDA last night where he couldn't cite any economists who could agree with the Liberal’s climate change policy.
No doubt tomorrow we’ll get more of the same from both sides. Apparently there are no other pressing issues in Australian politics.
For the independents however, there are. Take this from Andrew Wilkie:
"As the families of the victims of the Christmas Island disaster buried their dead last month, we listened in disbelief as shadow minister for immigration and citizenship Scott Morrison took politics to a new low by whining over the cost of flying mourners to Sydney, including the orphan boy who probably watched his parents drown"
"I say to Mr Morrison and Senator Bernardi, you are a disgrace - a disgrace to the high office you hold and the people you represent.”
I call on the Opposition Leader Tony Abbott to show strong leadership and to stamp it out, once and for all," Mr Wilkie said.
He said Mr Abbott must "lance the boil" of racism in his own party.
"It is not good enough to dismiss the hate inhabiting the dark corners of the Liberal Party and the widespread community concern it engenders, by just noting that your most senior operatives merely go a little too far."
Okay then.
Here as well was Tony Windsor today:
"But ... Tony Abbott on a number of occasions said that he would do absolutely anything to gain government - anything," Mr Windsor told Sky News.
"One could draw a conclusion from that that if we pulled a tight rein and said 'Well, you've got government if you put a carbon price on' he would agree with it - that was the inference from his statements."
Mr Windsor said he had made a "character judgment" about Mr Abbott after the discussions.
"He actually begged for the job ... (he said) 'I will do anything to get this job'," Mr Windsor said.
And here was Rob Oakeshott last week:
Rob Oakeshott's called off weekly meetings with the Opposition Leader, accusing his party of engaging in personal attacks instead of sharing policy ideas.
From Canberra, here's our political correspondent Tom Iggulden.
TOM IGGULDEN, REPORTER: Rob Oakeshott's grown more than a beard over the summer parliamentary break, he's also grown tired of doing business with the Opposition.
ROB OAKESHOTT, INDEPENDENT: When you look someone in the eye and you want to do business with them, you don't go around the back and start stabbing away.
So we have one independent who thinks the Libs have racists in their midst and a leader who is weak for not standing up to them; we have one who thinks Abbott lacks any principles and will do anything to get to the Lodge, and one who refuses to sit down in a meeting with the Libs.
Yeah, the Government is in real trouble.
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