God help the Gillard government with someone like Wayne Swan trying to explain the carbon tax:
Mr Swan is now distancing Labor from the term “carbon tax” and accused Opposition Leader Tony Abbott of lying about how it will operate.
“What we’re talking about here is an interim price which some people describe as a carbon tax and they can do that legitimately,” he said.
“It’s just that it doesn’t operate like a traditional tax; it is not deducted from your pay packet or anyone else’s pay packet, it comes from the big polluters.
“The money from the big polluters is then paid to assist householders and industry.
All this does is give Abbott and the media the opportunity to say that Swan and Gillard are contradicting each other on whether it’s a tax or not. It IS a tax in every sense, not just an impost that “some people describe as a carbon tax”. It was certainly necessary to correct any misconception about its incidence, but surely Swan could simply have said: “This is a tax that will only be levied on large polluters like power generators and iron and steel smelters. It won’t be levied on ordinary citizens or small businesses.”
However, the real problem is leaving Abbott with an open field to sow fear and confusion by failing to make public any detail at all of the proposed scheme. Climate Change Minister Greg Combet encapsulates the government’s current “strategic” position:
Mr Combet says the Government will continue to explain the basics about the tax and it will not be rushed into announcing the finer details.
“It is important I think, when you are making important areas of reform such as this, that you put out your broad policy intentions,” he said.
“It’s the same thing John Howard did in fact when announcing support for an emissions trading scheme in July 2007.
It may have escaped Combet’s attention that John Howard lost the 2007 election and only ever announced an ETS half-heartedly in a futile bid to eliminate it as a negative for the Coalition campaign.
He wasn’t actually trying to sell or introduce an ETS and would no doubt have been more than happy if he’d been re-elected and the promise sank without trace. Moreover, Howard could get away with not announcing any detail because he was facing an opponent with essentially the same policy, who he could be confident would not attack him aggressively as Tony Abbott is doing to Labor. If Combet’s strategic thinking is typical then God help the Labor government on that front too.
The other justification Combet provides for giving Tony Abbott a free kick is: “We’ll be doing the detailed work in consultation with all the stakeholders.”
However it shouldn’t be too difficult to craft a form of words that clarifies the government’s intentions but leaves enough qualifications to enable negotiations with “stakeholders”. How about something like this?:
- The carbon tax will be imposed at a rate between $20 and $26 per tonne of carbon emitted into the atmosphere.
- It will be imposed only on big polluters like power generators and iron and steel smelters. It won’t be paid by small businesses, families or individual Australians.
- The flow-on price effects of the tax for most individuals and families are estimated at (say) $300 per year. Low income earners making up to about $30,000 per year will be fully compensated for that amount either through the tax system or by increasing pensions and benefits. Those earning between $30,000 and average weekly earnings will be compensated at a slightly lower but still substantial rate. People earning more than average weekly earnings should generally be in a position readily to take a range of measures to adjust their consumption patterns to ensure that their cost of living does not increase. Those are the adjustments Australians must make if we are to successfully combat climate change.
- Goods for export (including steel and aluminium) will be exempt from the carbon tax.
- Goods imported from countries which don’t impose a carbon price of a similar amount to Australia will have the Australian carbon tax imposed on them.
- Any workers displaced from polluting industries paying the carbon tax will be eligible for generous government-funded retraining and income support for up to 2 years.
- It has not yet been decided whether petrol and diesel will bear a carbon tax, but if they do it would only be to the extent that the prices of these fuels fall below their current levels.((This might antagonise the hair shirt brigade among the Greens. They should be forewarned of the government’s position but then fought toe-to-toe on this one. Imposing a carbon tax on petrol (at least without directly countervailing reductions in fuel excise) would be political suicide. ~ KP)) There is no doubt that petrol prices will continue to rise in the longer term whatever the government does, and we will not be taking any action which makes those prices rise more rapidly than would otherwise occur. Those inevitable price increases over time will provide enough of a “market signal” for people to progressively convert to less polluting vehicles.
- The government will also be moving to introduce progressively tighter regulations on maximum carbon emissions of new vehicles, while giving manufacturers enough time to adjust their plans. The aim is to have all new vehicles within 5 years producing not much greater carbon emissions than a Toyota Prius does today.