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:

"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.

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.

So 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.

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.

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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.

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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.