A lot of nonsense is being written by pundits about Julia Gillard’s supposedly terminal leadership situation in the light of the carbon tax issue. The reality is that if she manages to broker a deal that gets through Parliament this year, then she’ll be seen as a strong leader who had the determination to force through a solution to an extraordinarily difficult issue where others have failed. Moreover, as with Kim Beazley in the wake of implementation of Howard’s GST, everyone will realise that it was no big deal and that Abbott was lying to them. On the other hand, if she fails to nail down and implement a carbon tax, Gillard is almost certainly dead meat whatever happens.
In the meantime, all Gillard can do is take the fight up to her opponents and seek to persuade as many people as possible about the facts and the necessity of a carbon price as part of the solution. She won’t achieve a decisive majority in that time, because it’s just too easy to sow doubt, fear and confusion about any proposal that hasn’t actually been implemented (or in this case even spelled out in detail). Look at the Republic Referendum a few years ago. A more innocuous constitutional change would be hard to frame, but monarchists had no difficulty in totally confusing an electorate that had little time for the Royal Family but equally saw little compelling reason for change. Fortunately Gillard doesn’t have to carry a clear majority of Australians with her at this point, just the Greens and Independents in Parliament. If she can do that the people will follow in due course after the carbon tax is in place. I’m sure Tony Abbott knows that too. Both leaders are playing high stakes poker.
So far I think Gillard is doing well. 11. KP: Leaving aside the fact that, as I argued in a recent post, she would be much better advised to flesh out more of her proposal now with enough qualifiers to allow for the detailed negotiations that certainly need to take place before any policy is finalised. [↩] Her performance on Q and A the other night was very impressive despite a quite skeptical audience. She was strong, persuasive and well briefed on all issues. To me this was the money passage of the evening:
AUDIENCE MEMBER: Prime Minister, isn’t the whole point of having a carbon tax to affect the prices that consumers pay? If there’s no change in consumer behaviour, you’re not going to achieve what you’re trying to achieve to reduce carbon pollution. So if it’s compensating households, aren’t you simply undermining the effect that your tax is going to have and ultimately make no change?
JULIA GILLARD: That’s a very perceptive question and I think a lot of people are thinking about his, about how does it work? If I’m getting compensation, what’s actually changing? Let me just explain that. The carbon price affects the big polluters. Yes, they will cause some price impacts for consumers. That’s true. We will then assist consumers and I can understand why people then intuitively go, well, how does all of this work? Isn’t, you know, sort of money going in and money going out? What’s the effect? Well, the effect is that in the shops when you come to buy things, products that are made with relatively less carbon pollution will be cheaper than products that are made with more carbon pollution. So you’re standing there with your household assistance in your hand. You could still keep buying the high carbon pollution products if you want to or what you’re far more likely to do is to buy the cheaper, lower carbon pollution products. That means that the people who make those things will get the consumer signal, gee, we will sell more, we will make more money if we make lower pollution products. That drives the innovation. So I want you to have that household assistance in your hand but I also want you to see price effects which make cleaner, greener things cheaper than high pollution commodities. That’s why it works.
Quite so. Now let’s hear more of it.