Canberra correspondent Bernard Keane writes:|
Jul 16, 2008 12:00AM |EMAIL|PRINT
This is as much a handout bonanza for our biggest polluters as it is an emissions trading scheme.
The Government has committed that every cent raised by the scheme will be returned to businesses or the community. In practice, counting the various assistance funds being set up and the giveaway of permits, the Government is likely to spend far more money than it will get.
The scheme is designed to minimise the whingeing from our biggest polluters – motorists and electricity generators. Petrol and diesel will be offset by excise reductions – adjusted “periodically”, whatever that means – so that no one notices the difference. So much for trying to change consumer behaviour there.
But in an attempt to keep its environmental credentials semi-intact, the Government has promised to review the offset after three years (after one year for the diesel offset). Wong – giving her usual flat and uninspiring performance — was repeatedly pressed at the launch on whether the review would start from the assumption that the offset would be removed.
Despite saying that motorists had five years to prepare for higher fuel prices, Wong refused to take the bait. But expect this “review” in 2013 to make life difficult for the Government – Greg Hunt is already talking about it being a cynical move to delay the petrol issue beyond the 2010 election – and almost certainly be dropped or heavily amended in the White Paper to indicate the offset will be permanent. It’s too cute by half, and Gallery journalists had already locked onto it at the launch.
There’ll also be assistance for low-income earners via the welfare and tax system, and even middle-income earners have been promised some help.
But it’s in relation to industry that the Government has really squibbed it. Nearly one-third of permits will also be handed out to trade-exposed industries, in an effort to minimise the loss of jobs overseas. The largest numbers of permits will go to the biggest emitters, although the mechanism of only providing permits for what your industry on average requires for what you produce will provide some small incentive to efficiency.
The electricity industry, our biggest polluter and a leading resister of attempts to mitigate climate change for years, must also be licking its lips at the prospect of getting both free permits and direct “assistance” from the Government.
The Government’s commitment to Action Funds and regional assistance also has the whiff of pork about it. The ABC’s Michael Brissenden was bang on the money when he asked Wong about the relationship between the timing of all this assistance and the 2010 election. Wong dodged and demurred.
In short, there’s not a single group that has been ignored by the Government in its efforts to minimise opposition to the scheme. The cost is not merely to the efficiency of the scheme, which will only operate at two-thirds strength at best, but to the budget, with big impacts looming from 2010 as the Government implements its bribes… sorry, assistance packages in conjunction with the scheme.
The Government may figure this is the price for maximising the chances of getting a scheme up and running. But the Greens will have other ideas.
They won’t like the wholesale handout of permits, and rightly so. Good luck in the Senate, Minister Wong.