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:

THE TAX:

A carbon price of $23 per tonne of emissions.

HOW IT'LL WORK

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.

THE COSTS

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.

THE COMPENSATION

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.

A Great Big New Tax on Everything

One thing we know for certain about Tony Abott: He is a man who can spot a 'Great Big New Tax On Everything.' Although his task has been made easier in this respect, for the 'Great Big New Tax on Everythings' have been proliferating like jack rabbits.

First there was the 'Resource Rent Tax,' a tax on mining profits above a certain level, first proposed by Kevin Rudd and then modified by Julia Gillard. Abbott identified both original and modified proposals as a 'Great Big New Tax on Everything.'

More recently, we had the 'Queensland Natural Disaster Levy,' a tax on anyone earning more than $50 000 who's house wasn't washed or blown away, to help with reconstruction after the cyclone and floods in that state. Abbott had this one pegged as a 'Great Big New Tax on Everything' too.

And now that we've finally reached what will likely be defining moment of the Gillard Government (or the Gillard/Whoever They Replace Her With Before the Next Election Government), the attempts to lower Australia's carbon emissions by attaching a price to them, Abbott has found another one. Gillard's embryonic proposal to introduce a modest tax per tonne of carbon released into the atmosphere, designed to help the environment and, you know, save the planet, is actually another one of these bloody 'Great Big New Tax on Everythings' that the Government is so keen on:



So a good question would seem to be: Why is the Labor Party so keen on bringing in a Great Big New Tax on Everything?

And an even better question might be: How is it that a member of the Howard Government, who really did introduce a Great Big New Tax on Everything in the form of the GST, is allowed to get away with this nonsense?

But we can leave those questions for another time.

Right now, let's just reiterate what is obviously an established fact: TONY ABBOTT IS VERY OPPOSED TO NEW TAXES TO HELP LOWER CARBON EMISSIONS.

He's stated this opposition, in every available media outlet at his disposal, so often that you start to wonder if his vocabulary contains anything more than the words 'opposed, 'new,' 'tax,' 'on,' and 'carbon.' Which, if true, is probably a bit dull for his wife and kids, let alone those of us who pay regular attention to his public pronouncements.

But this is not to say that he doesn't think carbon emissions shouldn't be lowered. He may be a late convert to the whole 'Inconvenient Truth,' global warming business, but he's inside the tent now. His previously stated skepticism (Abbott once referred to global warming as 'absolute crap') has gradually given way to oft repeated acceptance.

What, then, does the alternative Prime Minister propose to do about lowering Australia's carbon emissions? If he's not going to put a price on them and let the market sort it out? How's he going to fix this problem at no cost to us, the taxpayer?

Well, he's got a $10 billion dollar 'Direct Action' policy that would fund a variety of initiatives designed to directly lower emissions; tree planting, clean coal, free fluorescent light bulbs for all, that sort of thing. A whole range of things really, hundreds of them. And best of all: No new GREAT BIG NEW TAX ON EVERYTHING!

But wait.

Whereabouts is he going to get his $10 billion worth of funding from to pay for all these warm and fuzzy programs? I half expected him to go:

'Magic!'

when he was asked this question, and then maybe throw a smoke capsule on the ground before making for the exit, in the style of some sort of super villain:



For the very obvious answer is that that $10 billion dollars is going to come from the Australian tax payer, either through new taxes or reallocation of funds from existing revenue. A case of 'Half a dozen new, small taxes on everything' perhaps?

And this is where Coalition fantasy land starts to diverge from reality. For the Government's heavily criticised carbon tax is actually a tax on business, not on us regular punters. At least not directly. Businesses are the ones that are going to have to pay the levy for whatever tonnage of carbon they emit into the atmosphere (currently expected to be about 4c per 100 trillion tonnes or something equally negligible).

Abbott's argument is that businesses will then pass this extra tarriff onto us regular punters in the form of higher charges, and so higher prices, and this forms the basis of his GREAT BIG TAX ON EVERYTHING spiel. Which undoubtedly has some basis in fact. Nevertheless, us punters have a choice about how we spend out money. We can choose to accept these extra prices and stick with the same polluting companies that we've always used or, or, we can take our money elsewhere and buy products and services from carbon neutral industries that don't attract the tax and so have cheaper prices. This is the whole purpose of putting a price on carbon through a tax (or an emission trading system): peoples desire for the best price and the best value for money will reward non carbon industries through increased business.

Which is the market in action.

But with Abbott's proposal, there's no choice at all. He'll simply take $10 billion from our collective pockets and funnel it off to whatever fiddling-at-the-margins schemes he thinks will play best in the media. Which will mean more tree planting and more solar panel rebates, all paid for directly by us. And tree planting and solar panel rebates are all well and good, and certainly have their place in an overall climate strategy, but they really aren't an effective centrepeice of a policy if the goal is really to reduce carbon emissions in a cost efficient manner.

Take a recent report in 'The Age,' for example, that showed that in the last ten years Federal Governments of both stripes had spent $5.5 billion on climate reduction policies of the tree planting and solar rebate type that had reduced our emissions at the cost of $168 per tonne. And then compare that to the Government's mooted carbon tax that will reduce emissions at the price of $20 - 25 per tonne (not 4c per 100 trillion tonnes as has been inaccurately reported elsewhere) and see which one you think is the better policy.

Hmmm... the $168 dollar per tonne one paid for by us? Or the $25 per tonne way paid for by the polluters? Tricky...

It says a lot about the current state of political debate in this country that Abbott is allowed to go around the country masquerading as an anti-tax campaigner, while simultaneously proposing to take $10 billion dollars worth of extra taxes from us. Government in fighting and a lack of detail in what has been announced so far has let Abbott off the hook.

Julia Gillard must also lift her game as the Prime Minister has shown, so far, that she is not a good sales rep for her Government's ideas. The focus is on her and the ALP and they must deliver in two areas simultaneously. Explaining their carbon tax policy better and turning the attention of the media and the people to the cost and flagrant hypocrisy of what the Opposition is proposing.

It's a chewing gum and wallking at the same time moment for Labor and, so far, they haven't shown that they're capable of doing either.