Tuesday, April 27, 2010

The ETS gets put in the pre-election sin bin

This morning news came that the Government was going to put the ETS legislation in a drawer till 2013. To the critics this was political cowardice; to the ALP supporters it was political reality. Tony Abbott and Greg Hunt (a man who could write a PhD Thesis on environmental political cowardice) criticised Rudd for dumping a scheme they had blocked and did everything in their power to kill (I hope you all enjoy the logic of that). Hunt says that the main reason Rudd was doing it was:r245519_1002002

"The Government is concerned about the financial impacts of their enormous impost on electricity and grocery prices and the Government is concerned about its impact on the budget."

Hunt is half right (a bit like some people are half-witty…). The Government is somewhat concerned about its impact on the Budget – because the fact is the ETS would COST the Government – making it the most perverse “Great big tax” in history – as it actually leaves the Government worse off. The financial impacts on electricity and grocery prices would be next to negligible, given the compensation associated with the ETS, but the fear campaign on the issue would have significant as the Liberal Party on this issue would have been very liberal with the truth, if not very Liberal in its economic outlook.

Rudd no doubt looked at the Senate numbers, admitted defeat, knowing that with Abbott in charge of the Liberal Party and climate change nitwit Steve Fielding holding the casting vote, there was absolutely zero chance of getting any ETS legislation passed prior to the election ,and thus putting the Bill up again would just be asking to be hit – something no sensible Government does prior to the election on an issue that hasn’t exactly grabbed the public’s imagination. The media and opposition can gloat about Rudd having to backtrack on “the greatest moral issue of out time”, but I’d love any in the media to tell me how any ETS legislation is to be passed in this Parliament.

Apparently Rudd needed to sell the climate change message so persuasively that he would make converts out of all and create such pressure that Abbott would be forced to pass it. You know, all Rudd needs to be is a mixture of JFK and Martin Luther King with a dash of Al Gore. As Kennedy said: “Mothers all want their sons to grow up to be President, but they don't want them to become politicians in the process.” Similarly with Rudd, people want him to be PM, and not a politician who has to worry about getting re-elected and also has to deal with a Senate made up of 39 Senators who will do anything to stop an ETS being passed.

They left does love a good martyr. They want him to fight the election on the ETS, when any reading of the polls makes it obvious that this is not the way for the ALP to win (at least with an increased majority). People who advocate such things think Rudd has a 54-46 lead in the polls so he “should use some of that popularity” to get an ETS through – ignoring that he is at 54-46 despite not getting an ETS through. Yes if Rudd had been making speeches all last year like Turnbull did in February maybe it would still be an election winner. But elections are won by dealing with reality, not with what might have been.

christine-milne Green’s Senator Christine Milne came out in response and said of the policy switch:

“Why does the Prime Minister prefer to have no price on carbon at all than to negotiate in good faith with the Greens?

This is quite possibly the most political ignorant thing you could say – and indicative that the Greens operate on a different political level to the ALP and the Liberal Party. Good faith with the Greens? To what purpose? To end up with 36 votes in the Senate? Whoopee.

But this brings me to the key point – and what I think is the big political question for 2010.

That question is not who will win the election – the ALP will (and if you don’t believe me ask yourself if there is anywhere near the same feeling in the air as there was in 2007 – changes of Government at the Federal level are almost visceral things – you just know something big is going to happen). Today’s Essential Media poll had the ALP in front for the third successive poll at 54-46. In other words, they’re doing it easy – it’s just a case of how big – and obviously Rudd wants it to be as big as possible.

No that is not the big question. The big question is what how will the Greens behave after the election when they have the balance of power in the Senate.

Let’s do the maths: here’s the current numbers of Senators (with the number won at the last election):

ALP: 32 (18)
LNP: 37 (18)
Greens: 5 (3)
Fielding: 1 (0)
Xenophon: 1 (1)

So let’s just say for argument's sake that the next Senate election replicates the 2007 one (not an absurd prediction – the polls haven’t moved that much, and if anything it is being kind to the LNP). Here’s what the Senate would be (remember there’s 76 Senators – so you need 39 to get a majority):

ALP: 34
LNP: 34
Greens: 6
Xenophon: 2

I’ve given Xenophon another friend, but in reality it could be anyone – even Fielding, it doesn't matter. Why doesn’t it matter? Because by this reckoning, ALP + the Greens = 40 votes. Which means Xenophon can put his feet up and forget any cares about having influence. Sorry mate, but those days are numbered. The only hope for Xenophon is for both the ALP and the Greens to get one seat less than they did in 2007 as then the score would be 33 + 5 which equals 38 and thus the Govt would need X’s vote. But given the polls at the moment this is highly unlikely.

If there is a Double Dissolution things can get a bit squirrely, but even then what is more likely is just that the odds of there being two independents would increase. Let’s say 3 get elected at the cost of one ALP senator – that would still be ALP 33 + 6 Greens which = 39. So that would just mean 3 irrelevant independents who can sit on the red benches with their legs up.

What I’m saying is that the Government’s vote would need to really collapse for the Greens not to have the balance of power. And this is a big thing.

As we have seen in Tasmania, balance of power brings a much different focus on a party. Obviously the scenario at the Federal level will be completely different (the ALP won’t need the Greens to govern), but when it comes to the Senate we’re in new and dangerous territory for both the ALP and the Greens.

Up till now the Greens have been able to stay politically pure. They have railed against the ALP’s ETS and said the Government should do a deal with them – though not explaining how doing a deal with them would get any legislation passed the Senate. The rude fact is the Government did a deal with the Liberal Party last year and not the Greens because doing a deal with the Greens would have ensured defeat – the Liberal Party would never have touched any legislation that had the Greens’ fingerprints on it. 

It’s easy for the media to say Rudd has dumped the “great moral issue of our time”, but never ever forget he did what many in the media thought was next impossible – getting an agreement with the LNP. It is not Rudd’s fault that Abbott out played both Hockey and Turnbull.

But that is the past. After the election Rudd will have to deal with the Greens. How will they act? Will they wish to stay politically pure? If so they will continue to be an environmental lobby group rather than a mature political party. The dumb play would be to say the ETS means that much to them that they would vote against the Government's budget unless an ETS to their liking is included.

I doubt they would go this route – because if they did, Rudd would have zero qualms in playing the game as it has been thus far – getting nowhere and blaming the Liberal Party for not passing legislation, or even worse – negotiating with the Liberal Party on key legislation to end up with pathetic pap that is hardly worth the point passing.

The Greens need to not only grow up politically by realising that while they do have some power, they can’t be too over-the-top, and they can’t block things just because they’re not perfect. They also need to acknowledge the political reality that the media views them as economic lightweights. They can come up with all the wonderful schemes they can think of, and yeah a uni professor or economic think tank might say they’ll create masses of jobs, but unless they can get a business group thinking they’re plausible they will be treated with scorn by the main media.

Just look at how dumb the media (and yes I’m talking The Australian and Matthew Franklin) has been about the Henry Tax Review. There has been word about a resource tax on mining companies. So what do we get? Try

Mining tax `will kill industry'

With quotes from the Mineral Council of Australia: "There are $108bn worth of projects being studied or awaiting a final investment decision. A 40 per cent resource rent tax would influence those investment decisions”

Now here’s my big tip – the only thing that will kill the mining industry will be when they run out of things in the ground to dig up and sell. But nonetheless the Government will need to counter this message. One of the ways they countered such hyperbole with their IR legislation was to work with business groups (such as the Australian Industry Group) to be able to sell themselves as economically responsible.

Now I would be the first to say the Government could be better salespeople. They did not sell the ETS very well, the didn’t even sell their economic stimulus well – it only became a winner once it was shown we weren’t going to go into recession. They (and I do mean Rudd) have been shaky when it comes to arguing the hard policy. This will become an even bigger issue come the Henry Tax Review.

lucyCharlieFootballSo yes while Rudd needs to stand up and argue the hard point, but this needs to be noted by the Greens as well. They can’t just say Rudd needs to work harder. The Greens will not be helping their cause if they are coming up with policies that the Government is continually having to push up hill against the business community and the media to sell. Rudd and the ALP may have an image problem at the moment that squib the hard issues, but the Greens have to acknowledge that they too have an image problem – that they are weak on economics. 

The problem for both the ALP and the Greens however is, as Tim Dunlop likes to say, Lucy always pulls the football away. CharlieBrownLucyFootball

No matter how hard the ALP tries to be conservative on issues like asylum seekers, the media will always find ways to criticise them for either being initially too soft or then too hard and thus guilty of betraying their own supporters (or breaking election promises).  The Greens will get this treatment as well should they be seen to bend too far on environmental matters to align with business and the ALP (they will be reported to have sold out their core supporters).

It is a tough business, and I don’t envy the Greens their post-election position. They will get what they have always wished. It will be interesting to see if they come to regret it.


Yesterday in his his Liberal Party talking points article in The Oz, Glen Milne said the Liberal Party would start attacking Rudd’s character – gloves off as it were. They are doing this because they know they will get slaughtered in a policy debate because Abbott’s image is of a policy light weight (this is helped by his own policy efforts on climate change, paid parental leave and unemployment benefits for those under 30). Well the Libs haven’t wasted any time. Greg Hunt today called Rudd “a creep” for not apologising to the parents of one of the workers killed while installing insulation. I wonder if Hunt thinks the guy’s boss who had him working unsupervised is a creep as well. Expect more of this. The Liberal Party hates Rudd, and without the calming influence of Howard (yes calming) expect the Libs to go feral this election campaign.


I have to say Rudd has not done himself any favours by reneging on the election commitment to introduce an Election Debates Commission. It’s a dumb decision, if only because Rudd’s policy should be to give Abbott as much rope as possible to hang himself with. It also is just a good idea – one of those things that once in place would be something we wouldn’t believe we ever did without. The Press Gallery probably isn’t helping itself in its negotiations with the Government by having Philip Hudson (national affairs editor of the Herald Sun) as it President – Hudson of late has been putting out so many anti-Rudd articles that you’d swear he was angling for a job with The Australian. And while it won’t cost any votes, you do sometimes just want to tell Rudd to grow a pair and do it because he promised he would do it.


Aubrey said...

Nice post, Grog

I'm not looking forward to the Greens having the balance of power as I don't believe they could make the transition you envisage (to genuine players). Bob Brown has spent his whole political career scrambling to occupy the high moral ground and I can't see him climbing down. Perhaps Milne could do it but with the memory of the Dem's demise so fresh, I doubt she could carry the Party.

Being pragmatic ("doing deals") will genuinely limit their appeal to their base. I believe that the temptation to stand alone in order to maintain the line that the Big Parties are to blame will be too strong.

Grog said...

It will be tough Aubrey. To be honest, I don't know if they will be able to do it.

The Greens also have to face up to the reality that Brown ain't getting any younger. And as the Democrats found - leadership tensions can destroy small parties.

I don't think the Greens can become the Aust verison of the LDP in Great Britain, but I do think they can become at least as important as the Dems were in the 90s.(You can decide for yourself if the Dems handled their power responsibly!)

But will it last?

Sam Tansey said...

The greens either completely misread/didn't understand/didn't care about the politics surrounding the ets. It doesn't take a political genius to see that the biggest hurdle to setting up an effective ETS was always getting ANY ETS off the ground. The politics surround tweaks to targets, free permits, compensation, etc will be far less acute once an ets is in operation. I've always voted Green but I've been massively disappointed by the dick headed way they have used their influence in the last 2 years. It's like they havn't yet realised that they wield any legislative power; simply content to be a party of idealists shouting from the gallery.

L said...

“Why does the Prime Minister prefer to have no price on carbon at all than to negotiate in good faith with the Greens?

This is quite possibly the most political ignorant thing you could say – and indicative that the Greens operate on a different political level to the ALP and the Liberal Party.

I don't know Grog, if you take a sentence at random from any recent public statement from one of the two major parties, separate it from context and ignore the way it is intended to be perceived by its target audience, I reckon it'd sound at least as naive as this. And probably a lot stupider.

It's not as if the Greens are going to start wearing signs saying ACTUALLY FORGET ABOUT NEGOTIATING WITH US BECAUSE OUR SENATE VOTES ARE AS USEFUL AS 5 PIMPLES FORMING A LIKENESS OF JESUS ON STEVE FIELDING'S ARSE. No, they're using any opportunity they have to draw attention to their preferred policy outcome of a carbon tax and point out to their supporters what their priorities will be when one day they do end up with the balance of power.

C'mon, oppositions always do this kind of thing even when everyone knows there's absolutely no chance the government will negotiate with them, and nobody calls them naive. Hell, if they're Liberals Glenn Milne will get drunk and call them "tactically brilliant" or something. You don't think there's a little bit of a double standard here?

Anonymous said...

Hi Grog

What would we do without you, wonderful piece again.

I would love it if you were a journalist for Mr Murdoch.

Love this sentence

(Expect more of this. The Liberal Party hates Rudd, and without the calming influence of Howard (yes calming) expect the Libs to go feral this election campaign).

They the Liberal Party do really hate Kevin Rudd, it is evident in every interview.

How interesting this election is going to be, Tony Abbott has said today that he would be happy for this election to be fought on Climate Change, err really.

Cheers Lyn

Grog said...

L - yes you're right, the Greens shouldn't say that, but neither should they act like they have the solution - "just bargain with us and all will be perfect". It's bull, and everyone knows it.

To my mind the main problem is the Greens know their best chance of winning votes is by winning them off the ALP, thus it is not in their interests to help the ALP.

So in that respect they are operating like a mature political party.

(and you're right there are also a lot of other dumb statements said by other parties - put that one down to hyperbole on my part)

Sam I agree the hardest thing with the ETS is getting it in place - I wrote a blog on it a while back. But I do also acknowledge that the current ETS had deep flaws.

My hope is that post-eleciton the ALP will wokr with the Greens to come up with a better one - but (and it's a big BUT) the Greens have got to join the real political world and realise there are deep fears in the electorate about an ETS, and the media will do very little to calm them, thus any ETS they come up with will have to involve some 'bad' things, put in purely to make it palatable.

I hope they can do that - I do think they can.

Of course the big question as well will be whether Rudd thinks it is worth his political fortunes to negotiate with the Greens.

It may also depend who is Lib leader post-election.

Tim said...

The problem with the thrust of this post, Grog, is that you completely and wilfully ignore the fact that the Greens have shown time and again a willingness to negotiate in a way that will pass legislation that is nowhere near the 'purity' you ridicule.

The choice not to do so on the CPRS is because it is utterly unacceptable policy on many levels.

Your jibe at Christine Milne (disclaimer - yes, I am her adviser) is done in the bliss of complete ignorance. You weren't in the room in meetings with Senators outside Labor and the Greens who told us they would support our carbon levy proposal.

Laura Tingle, possibly the Canberra press gallery's most respected journalist, has made the point several times recently, that the government has done everything it can to keep the Greens irrelevant on climate change by refusing to talk to them. It's politically convenient for the ALP to brand the Greens as unable to do deals. Easier for them to attack on that basis than to do deals themselves.

That's what's the problem here, not the question of whether the Greens are mature enough or politically savvy enough to deal with balance of power.

Agnes Mack said...

Nick McKim gives the impression that he is a new breed of Green conscious of the need to distinguish between the ideal and the possible.

If this impression is accurate we can only hope that McKim will contaminate the prized purity of Bob Brown's Canberra Greens and we'll see some sane environmental policy get through a Senate where they hold the balance of power.

If Bob Brown insists only a perfect ETS will gain Greens support, things are looking grim for the Government and the environment. However much the pollsters tell us that voters want action on climate change, it is probable that in the privacy of the ballot box many will be muttering "as long as it doesn't hurt me too much".

There is no reason to expect next term's Opposition to be any less bloody-minded than this one even if Abbott gets the boot. Labor would realise that if they give the Greens the ETS they want, the Government will certainly be chucked out in 2013.

On the other hand, if the Greens "grow up", to use your expression, we might get a reasonable ETS which can be improved over time as the population realises it doesn't condemn them to a life of penury.

Really enjoyed your post, Grog, as always.

Anonymous said...

I don't have any confidence that the Greens will step up to the plate in the new senate any more than they have in this one (though in this one their votes are irrelevant so I suppose it didn't matter so much. I reckon they'll just carry on whinging (sp?) and whining and sacrificing the good on the altar of their idealised notion of the perfect.God I wish they'd grow up!

Psstoff Old Hack

Tim said...

Agnes Mack, please look at the facts. The Greens did not insist on a perfect ETS. The Greens proposed a very strong one in detailed legislation, but made it very clear we would compromise on it to pass a scheme that was a step in the right direction. We wanted to talk about each one of our 22 amendments to the CPRS. The government refused to do so because it preferred to play politics.

You folks who keep saying the Greens make the perfect the enemy of the good clearly have made no attempt whatsoever to look at our record in the Senate. Please take the time to do so and you may find yourselves somewhat wiser.

Sam Tansey said...

But Tim,
When it came to the crunch the Greens voted down a scheme that would have passed the senate and would have reduced emissions. A scheme that would have set us on the path towards a carbon neutral economy. Now that scheme has been delayed by 2 years and its future is still very uncertain. In a cap and trade system, all that matters from an emissions perspective is the target. Free permits count for little when the price is set by market mechanism anyway. The only thing free permits affect is who shoulders the load. Now you can argue all you want about who should carry the burden, that the coal industry should be the first to pay etc, but mother nature doesn't know the difference and doesn't care, so long as the emissions come down.

Tim said...

No, Sam, the Greens voted against a scheme which, according to the Rudd-leaning Grattan Institute would have actively held back emissions reductions. Do read their report.

The scheme had NOTHING to do with heading towards carbon neutrality, Sam. What an extraordinary thing to say. The govt has repeatedly said they have no intention to go to carbon neutrality - they don't think that is necessary or possible.

You say: "In a cap and trade system, all that matters from an emissions perspective is the target." This is a fundamental misunderstanding of the policy because it forgets the access to offsets.

Under this scheme, there was unlimited access to offsets from overseas such that the Treasury modelling assumed that effectively ALL emissions reductions would be achieved using imported permits from the date of implementation out to 2034.

In an ideal world where all countries had carbon caps and all countries had strong accounting and verification processes for the production of permits, that would be fine. But you know as well as I do that we do not live in such a world.

Where companies look overseas for cheap emissions permits, they owuld have happily bought whatever they could get access to at the cheapest price. And you know as well as I do that plenty of them would have been dodgy permits that account for absolutely no emissions reductions whatsoever - either they would be fraudulent as so many coming out of PNG and south east Asia are, or they would be questionable as to whether they amount to any _additional_ emissions reductions on BAU at all.

Bear in mind that the government KNEW this. The Greens moved amendments to make sure that any overseas permits were gold standard accredited so we could be confident that the emissions reductions they represented were real. The government steadfastly refused to accept even that amendment.

This scheme was designed to allow business as usual to continue in Australia for 20 years, with no guarantee that it would represent any emissions reductions at home or globally.

HillbillySkeleton@gmail.com said...

Can you imagine the confected outrage from the Coalition and the media if one of the members of the Rudd Government called Tony Abbott a 'Creep'?

Agnes Mack said...


Let's get down to the nitty gritty.

Anyone who genuinely wants action on climate change has no option but to vote Labor in this year's election. The Greens can't deliver and Tony Abbott's lot won't.

Unfortunately the number of voters wanting action is steadily declining, now around 48% I think. If this election were to be fought on climate change, with Tony Abbott and Barnaby Joyce stumping the country with their dishonest "Great big new tax on everything" mantra, the support is likely to plummet even further, making it even more difficult for any Government to act.

The Greens need to do a bit of tactical thinking if they are serious about reducing carbon emissions. They need to tone down their attacks on Labor because Labor is their best hope of getting genuine action on climate change. The Rudd/Wong ETS is far from perfect, and the ammended version is less perfect than the original - which, I remind you, the Greens voted down although it would have passed with their votes added to those of Senators Boyce and Troeth.

No legislation is immutable so once we had legislation in place there was every prospect that it would become gradually more effective. But now , thanks to Bob Brown's pig-headed purity, we have no base on which to build.

Tim said...

Wow, Agnes, you didn't read a word I said, did you?

That comment was pure ignorance and bias, not informed debate.

John said...

It seems like Kevin Rudd did the right thing about the Debates commission. It seemed like a bad lot, I mean, one person from Labor, one Liberal, and a member of the press gallery. Which means the press will control it, and they certainly haven't been doing the government any favors with their endless quoting of the liberal's party line. If I was Rudd, I would do everything possible to shaft them.

Anonymous said...

I used to second preference the Greens. This time I'll put the libs in front of them. They are a wasted vote

ascaunt said...

If the word around our office is anything to go by, the Greens might be the ones to receive a big backlash at the election. In an office of 28 people - not a real poll of course - but 17 are of the opinion that the Greens are as much to blame for not having passed the climate legislation. In my book that's a large number here so it will be interesting to see how it plays out. Also interesting were the comments condemning Bob Brown and Christine Milne for their perceived attacks on the Government over the insulation issue, which were regarded as hitting below the belt.
Interesting times coming up.