Carbon, The “Political Slaughterhouse”
By Rob OakeshottJuly 17, 2013
Despite what the media tell you, Australia is not engaged in a tax debate on carbon emissions trading. We never were. Comprehensive tax reform is a separate, urgent debate, one that both major parties continue to sidestep. Instead, we have this crazy manufactured tax debate on carbon, where leading scientists and economists get neatly sidestepped, along with national challenges that really demand our urgent attention.
So where did carbon pricing drift off the reservation? Back in 2001, it was the Liberal/National Coalition government Treasurer Peter Costello trying – and failing – to get an emissions trading scheme (ETS) through Cabinet. Six years later, both then Prime Minister John Howard and the Labor leader Kevin Rudd took an emissions trading scheme to the 2007 election. In 2009, Prime Minister Rudd and the then-leader of the Liberal/National parties, Malcolm Turnbull, very nearly agreed on a Carbon Pollution Reduction Scheme (ETS) model in 2009.
So all was nice and bipartisan – until the tight Parliament of 2010. At the time, neither the science nor the economics of an ETS were in question by political leadership. Yet an ETS stumbled at the final hurdle three times, thanks to tactical political plays.
I was one of the independent members of the House of Representatives whose support would help form the government after the 2010 election. Following the hung parliament outcome, there were a fair few negotiations. In my first phone-call with potential Prime Minister Tony Abbott after the result, I was told in so many words that if I supported an ETS (or the NBN) then I should “go with the other mob”.
(Interestingly, all other Liberal/National Party policies were up for a pragmatic conversation.)
So, the DNA of an Abbott-led government was made clear on day one of negotiations: no ETS would be delivered by a Liberal/National government.
Abbott knew I had campaigned at two local elections on the topic, repeatedly arguing that science and economics pointed to an ETS as the best model for Australia. It was a difficult start to negotiations with Tony Abbott.
So in throwing my support behind Labor to deliver an ETS, I was aware that the scheme would not be a bipartisan product. Indeed it was a brutal exercise, ramming an emissions trading scheme framework through the House of Representatives and Senate, and cleaning up the edges once the framework was in; our best scientists and economists were left to win the debate in the public square.
It was my view that logic would ultimately beat politics, once the framework was in.
Not so fast. We got the ETS through, but in doing so, the whole political conversation got stuck on two unexpected words – “carbon tax”.
And this is where, with hindsight, we failed. In particular, I worry that we failed what I consider the environmental challenge of our time for Australia – biodiversity loss. Today we see cuts to the funding for biodiversity programs to pay for the Labor government’s proposed changes to this thing called a “carbon tax”.
Biodiversity loss is Australia’s greatest environmental challenge by a country mile. But any initiatives to address biodiversity challenges see politicians running that same country mile – because they will not look past the crazy carbon showdown.
A National Biobanking Scheme would greatly encourage private sector investment in biodiversity, but yet again, eyes glaze over in the current carbon climate.
Biomass should be unlocked, in an agnostic way, to allow it to contribute more than 10 per cent of our energy security mix into the future – just as it has been in other countries. But, no, we’re stuck in a carbon fight.
The forestry industry should be engaged on the diverse economic role a tree can play in staying in the ground as well as being extracted – but instead carbon tax wars confuse the issue.
Australia should step forward, and on a large scale. The country should develop, protect and enhance a National Biodiversity Corridor network, where linked corridors of national significance are really seriously, and somewhat urgently, progressed. Again, the carbon fight instead has everyone treading lightly on any big environmental play.
The frustration is, we’re stuck in a political contest over something that should be but one in a suite of measures we should be taking in the multi-trillion dollar ecosystem service and landscape management space.
An ETS is not the centre of the universe. It was always a secondary, not primary tool to enhance and achieve better protections for biodiversity in Australia, and to deal with the challenges and opportunities emerging together in the nexus between landscape, energy and food.
We are stuck in a fight over this secondary tool, and it is putting a full stop on any progress on other measures.
Ecosystem services is a real industry in the trillions of dollars. Globally, we will have to feed twice as many people, on half the arable land, with half the environmental damage, and half the water use. This is an economic opportunity for Australia, as well as a global question for this century.
Yet do we have a Minister for Ecosystem Services, or Landscape Management? No, we don’t. Indeed, public policy in Australia has a very poor understanding of this meeting point between the environment and economy – and I do think this is why carbon pricing is proving so politically toxic.
Hindsight is a wonderful thing, but if I were dropped back into 2010 and had this opportunity again, I would make biodiversity loss the top of the pyramid of what we were trying to address, instead of prioritising the science of what Abbott now famously writes off as an “invisible” gas.
Community engagement on the science of koalas, for instance, is easier than greenhouse gases.
If we had put biodiversity first, securing the broader suite of tools required to address these challenges would have been easier, and the much-needed bipartisanship more certain.
And, ironically, we probably would have been able to negotiate an ETS on the way – probably as a sensible agreed measure, rather than this political slaughterhouse. In the end, it’s not science that is in dispute. And it’s not the economics that is in dispute. It’s all just politics.
THE “invisible termination” of an “invisible tax” is written and authorised by Kevin Rudd and Tony Abbott, vying for the country’s leadership ahead of an uncertain election date in a new political landscape. It’s all about campaigning; not governing.
Because remember, Australia’s so-called carbon price was never a tax. The Clean Energy legislation, which passed the House of Representatives and the Senate in late 2011, included 18 Bills. Apart from reductions in fuel tax subsidies for non-heavy transport and cars, there was only one other tax measure, and it was a good one – the tripling of the tax-free threshold from $6,000 to $18,200. The tax break from 1 July 2012 was the largest increase in the tax free threshold ever – and arguably the single biggest leap towards a smarter and fairer tax system that we have seen in decades.
Otherwise there is no mention of a tax anywhere in any of the other 17 Bills that are now law.
The absurdity of the current debate is that Tony Abbott is today talking about a “floating tax” in an effort to label the entire market – not just the three-year fixed-price period – a tax. The logical extension of that argument is that we don’t have a share market, but a share market tax.
This relentless rhetoric overwhelms reality. Politics needs a fix, which is why now Kevin Rudd is banking on removing the “non-floating tax”, the fixed-price period, as his solution.
In the land of Reality, do we really have taxes called floating or non-floating taxes? Of course we don’t. The bullshit knows no bounds, and Australians are being played for fools.