Tuesday, July 12, 2011

Burly Workers in Neon Vests

After one of the more protracted, drawn out, postponed and neverending gestation periods in Australian political history, our carbon tax policy has arrived.

And one of the first things to be thankful for is that the carbon tax has been called just that; 'The Carbon Tax.' For anyone who's thinking 'Well, what the fuck else would they call it?' just cast your mind back to Kevin Rudd's doomed Carbon Trading Scheme, officially called 'The Carbon Pollution Reduction Scheme.' Anyone that wants to track the downhill trajectory of that policy need only start with the name, as horrendous as anything that the language mangling Ruddbot ever came up with.

Moving on from the name to the policy itself proves trickier, due to the complex nature of what has been put forth. Which is nothing short of an attempt to recombobulate and reform Australia's energy sector, manufacturing sector and tax system simultaneously (when a reform of any one of these areas on it's own would normally have been considered epochal).

A brief summary of what has been proposed:


A carbon price of $23 per tonne of emissions.


Paid by the top 500 carbon producing companies, the tax will increase annually to a projected rated of $29 per tonne by 2015. From 2015, the Government plans to replace the tax with a market driven emissions trading system, where the carbon price will 'float' and be set by trade in carbon permits.


Companies subject to the tax are expected to pass on their costs to consumers. As these companies come from a diverse range of industries - including mining, transport and manufacturing - costs of most goods and services are expected to increase. The average cost increase per household per week is predicted by Treasury to be $9.90 per week, while the tax is expected to raise about $17 billion worth of revenue in it's first year.


A broad suite of compensation to measures to offset these cost increases. These will be delivered through tax cuts, increases in welfare payments and a set of 'one off' bonus payments to help pensioners and low income households. Average compensation is projected at $10.10 per household per week, costing the Government about $21 billion in the first year of operation.

Now that last sentence is important. As it means that Treasury modelling of the Carbon Tax shows that on average people will be marginally - very marginally - ahead of where they are now.

This from a tax that has been widely posited as the end of civilisation as we know it. The last Revenge of the Green Nerds who - for reasons known only to the Tony Abbott and his supporters on the extreme right - want to destroy modern society.
We can see now that they want to do this by giving us a generous package of tax cuts and payments and hoping we all... spend ourselves to death? Which is, you know, devilishly clever (or something).

Which is not to say that there aren't losers from the carbon tax legislation. The compensation measures are on a sliding scale so those at the bottom end of the income scale will do much better than those at the other end. Anyone with kids and earning over $150 000 will be worse off by a few hundred dollars a year, as will single people with no kids on about half that amount (including myself in this last category).

But to speak of losers out of such a package as this one is to overlook a fairly crucial point. And that is: this is a tax that you can avoid, or minimise your exposure too. Even more pointedly, this is a tax the Government wants you to avoid, as much as possible.

For if the carbon tax is to serve any useful purpose at all, then it's primary function will be to alter the way people spend their money. By adding a carbon price to good and industries that are carbon intensive, the hope is that carbon free or reduced alternatives will become cheaper in comparison. And so savvy people who are willing to look for services in low carbon areas will receive not just the Government's compensation, but save themselves money by dodging the tax altogether.

Again, not exactly what you'd expect from a policy who's purported purpose was to return Australia to the Dark Ages.

Not that this could stop the Opposition Leader, Tony Abbott, from claiming that this was just what it was designed to do. The Action Man's response to the carbon policy was both predictable... and seemingly scripted out about a month before the details of the policy were released, as his comments mostly ignored the specifics of what the Government had just proposed.

The carbon price would 'drive up prices and threaten jobs,' the Opposition leader said. It would 'do nothing at all' to curb emissions while ensuring that 'millions of Australians are worse off.' It was nothing more than 'a tax increase pretending to be an environmental policy' and, as such, would be 'the first time since the 1980s that marginal tax rates have been increased.' He colourfully predicted that the the policy would prove so unpopular with the punters that the Government would suffer 'the death of a thousand cameos,' as regular folk stepped forward to complain about it. He further offered to provide all 1000 said cameos by noon of the following day.

In short, he had plenty of tightly scripted, vaguely general, acutely non specific lines that the waiting media hordes could sample and run as five second grabs as his response throughout the subsequent few days. Typically, for Abbott, he had much less to offer in the way of actual details; whether or not he'd reverse the tax if elected and whether he'd keep the more generous income tax arrangements that accompany it first among these points he was silent on.

And he had nothing whatsoever to say about his own plan to reduce carbon emissions.

Yes, that's right, that previous sentence is not a misprint. Mr No-Taxy Pants is a Global Warming believer himself. And he has his own little scheme to reduce Australia's carbon emissions which he made no reference to during his carbon tax response and which involves spending $3.5 billion dollars of public funds on... tree planting? Burying, er, stuff? No one, including Abbott himself, seems quite sure exactly what his 'Direct Action' plan will entail, nor how he intends to pay for it. It also seems to be fairly certain that we won't find out either of things, until about four minutes before the next election.

In the meantime, then, we are treated to a most unusual sight. Both Government and Opposition engaging in an election campaign with no election due for about two years. Julia Gillard has promised to 'wear out her shoes' while travelling the country to explain the policy (and she has conducted more than 100 interviews since it was released), while The Action Man is never likely to miss out on a chance to roll up his shirt sleeves in public and shout a lot.

This faux campaign will involve much claim and counter claim from both sides, and will suck up all the available political oxygen for the forseeable future. Julia Gillard's has staked her Prime Ministership on this policy and, not to be outdone, The Action Man has doubled down and bet the house too. Expect many colourful charts and ads as they seek to exaggerate the benefits of their respective ideas.

Not to mention many more photos of what is likely to be this debate's enduring image; burly workers in neon vests looking non plussed.

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