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Federal

Feb 25, 2011

Broken promises and price rises

Welcome back to the politics of climate change, Australian style, which wrecks leaderships, sunders parties and induces bizarre alliances as a matter of course.

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So, welcome back to the politics of climate change, Australian style, which wrecks leaderships, sunders parties and, like a kind of green haze, induces fury, ill-judgement and bizarre alliances as a matter of course.

Quite what the Government announced yesterday is hard to describe. It’s an agreement, though only with the Greens – Tony Windsor and Rob Oakeshott only “agreed” to its release – and then with only the vaguest of principles, with such minor issues as the level of the fixed price and household and industry compensation left TBA. Also To Be Advised was Labor Caucus, which was not asked to consider the proposal.

This provided new vigour for the Opposition’s long-running campaign on electricity price impacts. One has to say, however, that, it would have more credibility on the issue of electricity prices if it had been able to maintain a consistent line on the matter over the last two years. Having long campaigned on the electricity price impacts of carbon pricing, back in August 2009, the Opposition unveiled modelling by Frontier Economics, commissioned by Andrew Robb and Nick Xenophon, demonstrating that the Government’s CPRS would force electricity prices up by $260-280 a year.

After tearing itself apart over the issue and installing Tony Abbott as leader, the Frontier findings were abandoned and the Opposition adopted a new tack, claiming Labor’s CPRS would lead to a total increase in costs for households of $1100. A NSW electricity pricing regulator ruling was also used to claim the CPRS would increase electricity prices by 62% alone, although later in Parliament Greg Hunt cited another figure, “19% over two years”.

But at some point, perhaps as an example of rhetoric inflation, Hunt started claiming that the $1100 figure was for electricity prices alone, not all household costs, as a consequence of a $30 a tonne carbon price. That line of attack took him up until the start of this week. Unable to stand Hunt’s constant repetition of the $1100 figure, and the innumerate journalists who reported it, John Quiggin methodically shredded Hunt’s claims, showing that his $1100 line was out by a factor of 5.

Perhaps it was a coincidence that after this takedown, Hunt and his colleagues abandoned the $1100 line. This week, their electricity price claim was lowered back to $300 from $1100. Why? The Australian Industry Group had produced a report with modelling claiming a carbon price of $26 would increase electricity prices by $300 a year.

How Hunt got from a carbon price of $30 a tonne causing electricity price rises of $1100 to a carbon price of $26 a tonne causing electricity price rises of $300 a year is anyone’s guess.

What the Opposition never mentioned is that under the CPRS, low and middle income earners were all fully compensated for the price rises. In fact, many were overcompensated, just to make sure. The Opposition knows this perfectly well. Why? Well, cast your mind back to November 2009, when Ian Macfarlane and Penny Wong were negotiating an agreed position on the CPRS (passage of which, you’ll recall, Tony Abbott had been strongly in favour).

One of the issues was, naturally, electricity price rises. Eventually the Government and the Turnbull-led Opposition agreed to reduce electricity price rises by massively increasing handouts to the electricity generation sector. This meant they slashed compensation to households for electricity price rises – in effect transferring compensation from households to the foreign multinationals and incompetent state governments that run our electricity generation sector.

All that’s now superfluous detail, of course, in the race to claim that householders will somehow be out of pocket from electricity prices, by $260, or $300, or $1100, or whatever other number will spring to mind. No one remembers in the perpetual present of the media cycle.

The Opposition’s other line of attack has far more credibility – the gulf between what Julia Gillard and Wayne Swan said about carbon taxes before the election and what they say now. The contumely directed toward Labor is richly deserved, given the extraordinary cynicism and political stupidity that informed its election commitment. Perhaps Karl and Mark can cough up for some focus groups on how to square that particular circle?

The Right will hammer this endlessly — Alan Jones left even more froth on the microphone than usual this morning — although if Tony Abbott wants to talk about “people’s revolts” he might watch some Al Jazeera and examine some pictures of murdered Arab protesters first in order to understand why that might be a tad inappropriate at the moment.

Whether the “broken promise” line has any legs will be the first question of interest as we plunge back into the green haze. Are voters more likely to see the Government’s move as a breach of faith or a reversal of an extraordinarily dumb decision? And have we all got the emotional energy to reach the same heights of hysteria as in 2009?

Although there’s one minor problem with it all. It’s funny, but I don’t recall any such fury when the promise by both Labor and the Liberal Party to introduce an ETS after the 2007 election was deliberately broken, first by the Liberals in 2009 and then by Labor in 2010.

There’s very little consistency in either the Government or the Opposition when it comes to climate action.

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