On Sunday night, Wayne Swan released a page of some gobbledegook numbers that Treasury purportedly put together that asserted that our greenhouse gas proposal had a $3.2 billion hole in it.
The media outlets, gifted with the Treasurer’s page of assertions, which contained no supporting analysis, uncritically reported the Treasurer’s claims. It now appears that the Government never intended to provide any supporting analysis of the Treasurer’s assertions. The Treasurer’s claims have now been repeated in the media, so the Government’s stunt has worked. As we all know that an untruth will, through the course of re-reporting, become a truth.
This media stunt was transparently designed to detract attention from the $50 billion hole that we identified in their CPRS. This is a $50 billion hole that the Government has not been able to explain, even after two months of Treasury officials pouring over our work to find a flaw that is not there. So the Government had to fabricate a problem as a distraction, and to put the heat back on the Opposition. This has also worked.
The last thing the Government wants is for the Coalition to come up with a more economically responsible, greener proposal and one that is more consistent with core Coalition values of smaller Government.
If the Opposition did produce such a policy this would raise serious questions about the Government’s understanding of emission trading and their economic credentials, and it would give the Coalition something to rally around.
At the same time Treasury couldn’t risk conceding that, after years of analysis and millions of dollars of taxpayer funds, they have missed a cheaper way of achieving greenhouse gas cuts. So the Government and Treasury are both motivated to bury any alternative better than theirs.
Let’s be clear, there is no such black hole. It’s a good old fashion beat up.
Aside from the $50 billion of savings in our scheme, we have clearly stated in our report (page 41) there are substantial permit revenues left over in the order of $3 billion per year after the first year of the scheme.
It is for Government to decide who should be the recipients of these funds, and to what extent. We did not make a call on how that ought to be allocated. Also, the Government seems to have ignored, obviously because it suited their position, the extra royalties gained from a more vibrant resources sector under our scheme, which quickly rise to around $1.5 billion per year, which was also clearly stated in the report. The Government also seems to have ignored the higher tax revenues that result from faster growth under our approach (page 42).
For all its criticisms of our analysis the Government has yet to be fully transparent about its own use of permit revenues. All parliamentarians should insist on a complete account of permit use before voting for the CPRS legislation. Australians deserve at least this courtesy.
The challenge is now on the Coalition to demonstrate that they have the capacity to develop economically sound policies and to defend them. In my experience this takes courage as inevitably, economically sound policies will cut across some powerful vested interests. If the Coalition is waiting for big industry, many of whom have been looked after in the CPRS deal and who are unwilling to risk their gains by supporting a Coalition alternative, which has yet to be defined, the Coalition will be waiting for a long time. The Coalition needs to stand up for Australia, and particularly for the thousands upon thousands of small businesses who employ most of us, because the Government is not.