Labor's carbon tax lie

[drsmith]

I agrre with you, Abbott won't repeal it, more likely as drsmith said reduce the price, as an out.

Reducing it to nothing while leaving the archtecture in place may be a sensible option. Whether it's politically practical is perhaps another matter.

Given their policy commitments, the Coalition clearly has a case to answer on how they would balance the budget. It's not a political imperative at the moment however, given Labor's woes.

In terms of balancing the budget, his so-called direct action may well become delayed action depending on our economic situation and action by the major economies at the time.

 

[drsmith]

They will likely need to be rid of obstruction in both houses and that will be up to voters.

If one brutal baseball bat bashing by the electorate isn't enough, Labor's battered and bruised body will then be beaten to a bloody pulp from which it may never recover.

 

[StumpyPhantom]

If one brutal baseball bat bashing by the electorate isn't enough, Labor's battered and bruised body will then be beaten to a bloody pulp from which it may never recover.

There's nothing like swallowing the bitter pill that is a heavy election defeat. Once every three years, you see the pollies sitting there in the National Tally Room and elsewhere talking with disarming honesty about why things happened the way they did.

The only one I'm expecting not to be honest about all this is Julia Gillard herself. If she survives as the member for Lalor, she will probably quit shortly after with a by-election.

But for the rest of them, when the pain of defeat sets in, and with Abbott in the ascendancy, the last thing they will want to do is to face the electorate so soon again.

 

[drsmith]

The only one I'm expecting not to be honest about all this is Julia Gillard herself. If she survives as the member for Lalor, she will probably quit shortly after with a by-election.

In the unlikely event that she survives to the next election as PM and the above comes to pass, her line will be that the Greens and independents made her do it. While only being partially true, it may be the most honest line of her political career.

 

[Julia]

What I don't agree with is the IF claim that Abbott won't therefore repeal the Carbon Tax. He wouldn't be so foolish so as to not act on the one elction promise he has made. He's seen the results of that, so it's just a forlorn Labor hope. Actually, I think it's a deliberate Labor strategy to paint Abbott as a 'future liar'. If you can't lift Gillard's standing, then the next best thing you can do is bring your opponent down to the same level.

+1. There's no way Tony Abbott will leave the carbon tax in place. After all his months of rhetoric about it, to not repeal it would be total political suicide not just for himself, but for the entire Coalition.

They will have to work out how to fund it, and their other promises. But it's my bet that the utterly angry and disillusioned electorate will be prepared to tolerate some pain to get rid of it, and for that matter, to get rid of this woefully incompetent Labor government.

It's a matter of getting the Coaltion to cost this properly before the election. I think the electorate would appreciate some honesty for a change.

Yes. As above, it's my belief that if Abbott & Co were to honestly say to the electorate that - because of the appalling waste of the Labor government, some costs will be incurred in getting the country back on track, the electorate will largely be prepared to wear that. I know I will.

The 'direct action plan' has to go,

Agree. By the time the Libs are elected it's very likely that so called climate change will have sunk even lower in the level of concern of the average voter, as well as internationally. This is already well and truly happening.
I'd be very surprised if Mr Abbott were to encounter much resistance, other than obviously from the Greens, if he were to announce that the 5% target will be put on hold until the rest of the world takes a similar stand.

But we don't need to worry about getting to surplus, we are already there (close enough, anyway)

That's an extravagantly optimistic statement.

and with a national debt that is miniscule by world standards. Throw in the results of another year's economic growth and its flow-on effect on tax recipts and that's the least of our troubles. (Unlike Greece, USA, many, many other places.)

If you're going to compare us with the fiasco that is Greece et al, imo that's hardly a basis for asserting complete financial health for Australia.
At least compared to the time when the Coalition ran such a healthy surplus.

Do you seriously think that after the electorate nukes Labor at the next election that what's left will be screaming for more ?

The cold, hard reality is that Labor's failure to sell the carbon tax to the public makes it a millstone around their necks.

When in office, Tony Abbott will bury the carbon tax and Labor along with it should they then choose to throw themselves down the hole after it.

I agrre with you, Abbott won't repeal it, more likely as drsmith said reduce the price,

Um, what? Above drsmith clearly suggests he believes Abbott will definitely bury the carbon tax.

 

[Tannin]

That's an extravagantly optimistic statement. If you're going to compare us with the fiasco that is Greece et al, imo that's hardly a basis for asserting complete financial health for Australia. At least compared to the time when the Coalition ran such a healthy surplus.

^ National debt to GDP ratios.

You explain which one is Australia, and which ones are the USA, Japan, Ireland, the UK, and Germany.

 

[drsmith]

+Um, what? Above drsmith clearly suggests he believes Abbott will definitely bury the carbon tax.

In fairness, i dd muse recently that one option for removal might be to reduce the rate to zero while leaving the underlying structure in place. This to me would be the iedeal and an easy solution fot TA if legislation was not required. The latter is a long shot though as it's hard to imagine the current government making it that easy.

Even if it was, there's then the question of the extent to which the Coalition would make Labor eat its own crap.

 

[sptrawler]

As IFocus said not many, if any taxes get repealed.
I recall Bob Hawke stating that the first thing he was going to remove, was the fuel tax that Fraser put on.
As far as I know it is still there.
That's the thing with new taxes, the hardest thing is getting them in. So throwing them out is a bit like cutting off your nose to spite your face. I would think Abbott will tone them down, but leave them in.

 

[Smurf1976]

Smurf - like others, I'm very grateful to you for your incredibly informative posts.

For that reason, I'm trying to understand in detail what you think the long-term mistakes (or white elephants) are occurring as a result of this carbon tax.

40 years ago it was viable to use oil for power generation and new oil-fired plants were popping up everywhere much like gas-fired ones are today. Likwise, most factory boilers ran on oil (likewise hospitals, hotels etc) and in many areas just about all new homes were built with oil-fired heaters installed as standard. Oil supplied about 50% of world energy and rising.

Then the inevitable happened. Political tensions in the Middle East combined with a rapidly growing gap between Western world oil production and consumption, lead to a supply crunch and associated price shock first in late 1973, and again in early 1979. Economic crises followed, and for the next 30 years the term "energy" was almost universally taken to mean "oil physical supply and price risk" in the context of government policy and the like.

Oil had gone from being in massive over supply, to the point that new construction of coal and even hydro power was increasingly uncompetitive, to increasingly valued as a transport fuel and petrochemical feedstock. As supplies tightened, it ceased to be an economic fuel for boilers and the like. Australia, along with most other industrialised countries, formally committed via the IEA to minimising the use of oil in electricity generation as a result of this situation.

We are now approaching a similar situation with natural gas. Sure, we have plenty of it here in Australia but then we also have a boom in LNG plants under construction such that domestic supply is only available at international market prices.

The big mistake, as I see it, is that we are failing to learn from history. We have rapidly growing demand for gas globally with a lot of future growth "baked in the cake" by decisions already made, and over half of total reserves in the hands of Russia and the Middle East countries. Meanwhile there's a move to build new ships with gas engines (already happening in Australia), likewise trucks are headed the same way too. And yet despite all of this, we are planning our electricity generation on the basis that gas remains cheap. That's an awfully big gamble in my opinion especially given that we've already got local industry (notably Rio Tinto) saying they are having trouble securing long term gas supplies for Australian operations.

To some extent this situation would exist without the carbon tax, but the tax is clearly intended to increase reliance on gas. That is perhaps the only thing anyone can say with certainty - introducing a carbon tax will, in due course, mean we use more gas than would otherwise have been the case.

What would I do? I think Australia needs some sort of a plan for energy in view of all of this (including the CO2 issue).

1. What are we going to use for transport fuel 30 years from now? It's not likely to be crude oil, at least not at an affordable cost, and there's not much hope for battery powered trucks or planes. So what's our plan? I'd expect that we'll be using quite a bit of gas for this. Other countries are locking up oil supplies under long term contract, thus taking this oil off traded markets, and we're just hoping for the best.

2. What about fuel for process heat? That's a big one that is widely overlooked. Most likely, we'll still be using gas.

3. What about electricity? Are we sure it's a good idea to shift to gas for this as well? That's an awful lot of eggs in the one basket.

4. Is exporting most of our gas resources, and a large chunk of the coal, really in the national interest? That's a question that can't really be answered without first having an answer to the others.

Leave it to the market? Perhaps we should, but that's not really an option in practice for the simple reason best explained by saying that this thread is essentially about government involvement in the energy industry via taxation. Energy is a strategic industry, and it's rare to find a government that keeps away from it for long.

Nuclear power? I hope not, for a very simple reason. It would be the height of lunacy both economically and environmentally to be shipping coal half way around the world (using lots of oil in the process), whilst using nuclear energy to power the coal mines and the country they are in.

It would make far more sense to just use the coal where it is mined, and use nuclear energy in place of coal in those places relying on imports. That makes far more sense in every way from the environment to energy security. It's actually why France and Japan (and others) have historically been so keen on nuclear - they don't have local coal etc reserves of any note, and if you're going to rely on imports then using uranium does make a lot of sense simply in terms of supply security.

I'm not hard line anti-nuclear, but it undeniably does entail various risks and I see no valid reason why we would need to use it in Australia at the present time. As long as we are mining coal, and this coal costs less than building and operating a nuclear plant, there is no economic or environmental gain in going nuclear in Australia. Nuclear only cuts CO2 if we actually stop mining the coal - simply shipping more of it overseas doesn't help in the slightest.

It would make sense to put nuclear in China (for example) as a means of closing an Australian coal mine if the objective is to reduce CO2 but it doesn't make sense to put the nuclear plant in Qld or NSW and continue shipping out the coal (and using lots of oil in the process).

If you look at countries with nucelar power then they basically fit into these categories:

1. The plants are old and there has been little or no ongoing construction program once nuclear power was found to be uneconomic (eg USA).

2. There is insufficient local supply of coal, gas or hydro, thus necessitating that something be imported (eg France, UK) and nuclear is chosen for reasons of fuel diversification and hence supply security.

3. Done for reasons of national pride etc.

4. Electricity is a sideline, or a smokescreen, to the real objective of a nuclear industry aimed at producing weapons grade materials.

Obviously there are exceptions, but there aren't too many nuclear plants which are actually viable in direct competition with locally produced coal, hydro or in some cases gas. It could also be said that it's rare to find a nuclear plant which is not in some way subsidised or at least underwritten by taxpayers.

 

[sptrawler]

Well smurph, after reading that, it becomes obvious it is a revenue raising tax as opposed to a carbon abatement plan.

Thanks againfor another great post.

 

[sails]

Has any other tax been so strongly opposed AND by so many voters before? GST would be close, but not as much. In any case, Howard took the divisive GST to an election. Gillard did not. Big difference.

With Gillard admitting on the eve of the election she planned to price carbon if she won, that says she never meant a word she said about her no carbon tax pledge. Carbon tax/carbon price is the same burden on consumers.

Abbott will likely get a massive mandate to repeal it and he needs to follow through on such a mandate.

 

[Miss Hale]

Has any other tax been so strongly opposed AND by so many voters before? GST would be close, but not as much. In any case, Howard took the divisive GST to an election. Gillard did not. Big difference.

With Gillard admitting on the eve of the election she planned to price carbon if she won, that says she never meant a word she said about her no carbon tax pledge. Carbon tax/carbon price is the same burden on consumers.

Abbott will likely get a massive mandate to repeal it and he needs to follow through on such a mandate.

Plus the GST was part of tax reform and other taxes were abolished (or supposed to have been) as part of the deal. Also, it was a tax, nothing more nothing less, it wasn't masquerading as anything else. The carbon tax is also a tool to raise revenue but it is being sold to us as something to save the planet which it isn't. When their is a sizeable chunk of othe population that don't believe that planet is doomed anyway they are not going to accept the validity of this tax under any circumstances. That IMO is also why it is so unpopular and so opposed by so many.

 

[Eager]

Plus the GST was part of tax reform and other taxes were abolished (or supposed to have been) as part of the deal. Also, it was a tax, nothing more nothing less, it wasn't masquerading as anything else. The carbon tax is also a tool to raise revenue but it is being sold to us as something to save the planet which it isn't. When their is a sizeable chunk of othe population that don't believe that planet is doomed anyway they are not going to accept the validity of this tax under any circumstances. That IMO is also why it is so unpopular and so opposed by so many.

The carbon tax is simply a wealth redistribution scheme, nothing more, nothing less.

It is unpopular across all of our society, but moreso amongst those with (comparitive) wealth. Hence the vitriol against it here.

Just an observation, without making a case for or against it.

 

[So_Cynical]

Abbott will likely get a massive mandate to repeal it and he needs to follow through on such a mandate.

Is winning an election really a mandate?

Rudd went to the 2007 election promising to implement an Emissions trading scheme, he won easily so thus Labor has a Mandate...in fact in 2007 the noalition went into the election also promising an ETS.

http://en.wikipedia.org/wiki/Carbon_Pollution_Reduction_Scheme

 

[sptrawler]

Is winning an election really a mandate?
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Obviously not, Labor has brought in major new taxes and increased your marginal tax rates, without winning an election with the changes as a platform.
It does beg the question, why not run it like the unions, where the organisers decide what is best for the membership.
Actualy that sounds familiar.

 

[Julia]

The carbon tax is simply a wealth redistribution scheme, nothing more, nothing less.

It is unpopular across all of our society, but moreso amongst those with (comparitive) wealth. Hence the vitriol against it here.

On what basis do you conclude that the carbon tax is more unpopular with those who are more affluent?
Have you done a survey of Australia's most financially disadvantaged people?
They're the ones who are going to be struggling most.
Not the people who were able to afford, e.g., to put the solar panels on the roof, thus reducing their own electricity costs, but adding to the costs of electricity for the low income group who could not so afford.

As always, it's the folk at the bottom of the pile who always come out worst.

 

[drsmith]

The carbon tax is simply a wealth redistribution scheme, nothing more, nothing less.

:iamwithst :flush:

 

[Tannin]

In fact, there are only three classes of people who are worse off after the recent tax reforms:

1: The small number of high-income individuals on incomes like $100,000+ Not many Australians fit into this category, and those that do are by far the most able to reduce their carbon footprint if they wish. The fact that so many of them would rather whinge and complain than actually do something about it does not reflect well on them. Measures as simple and practical as orienting that fancy new house to face north and have properly-sized eaves can save thousands upon thousands of dollars over the life of a house.

2: The modest but suignificant number of people who (a) do not pay tax and (b) are on a fixed income with no pension or benefit payable. Some self-funded retirees fit into this class. (But most do not - a great many self-funded retirees also have some taxable income, either from part-time or, more often, from income producing assets held outside their super fund, typically because they are not spending all of the mandatory 4% pension mode super fund draw-down and invest the balance. All of these people benefit enormously from the gigantic lift in the tax-free threshold, and for the first time ever, about 2 million Australians won't even have to fill out a tax return.

3: Many millions of imaginary people. These are by far the most numerous class.

 

[drsmith]

Many millions of imaginary people. These are by far the most numerous class.

Labor will discover just how real those millions of so-called imaginary Australians are on polling day.

 

[qldfrog]

Not the people who were able to afford, e.g., to put the solar panels on the roof, thus reducing their own electricity costs, but adding to the costs of electricity for the low income group who could not so afford..

Hi Julia,
while agreeing that the lower "socio classes" will suffer more , for the first year at least, the CT is a redistribution tax so they will benefit (I do not factor the fact they will be the first ones to loose their job as a results, that is not part of Labour's extended vision ahead );

But I also find funny listening about this new argument: the wealthy gets the solar systems, it will cost the other ...

a few years ago, electricity networks were crying poor as the rise of plasma screens and especially air cond would require so many new power plants to be built (and a few billions to do that)
With solar panels, NSW already and we will probably learn soon Qld as well, will not need so many extra infrastructure: lower peaks due to aircond during the day, and when feed in , no infrastructure and losses on 100's kms as the solar house feeds its immediate neighborhood;
This is saving the networks billions but costing the reseller power companies as there is less consumption..
So propaganda......

As for the argument only the wealthy could afford it:
6 months ago. anyone could have had a solar system for $0 or hardly any deposit as installers were ready to advance the cost against your credits and some repayment matching the savings..

once again a typical aussie ACA style argument: the dummers are renamed the battlers
Would be nice to get some input from smurf1976 to confirm as this is his domain
Cheers