Wednesday, May 4, 2011

The Taxing Times Have Yet to Begin

Today a Newspoll was released in The Oz that shows (we are told) that the public has abandoned Julia Gillard’s carbon pricing plan:

VOTERS are overwhelmingly against Julia Gillard's carbon tax after a sharp fall in support in the past two months among the young, families, women and even Labor supporters.

As Tony Abbott continues to campaign against the tax, the latest Newspoll survey reveals 60 per cent of voters are opposed to the government's plan to put a price on carbon next year and only 30 per cent remain in favour.

Since the election last year, opposition to a carbon price has been rising and jumped after the Prime Minister announced in late February that she planned to introduce a carbon tax from July 1 next year ahead of a full emissions trading scheme in three to five years.

Feel the joy from Shanahan…

There were a couple things that were interesting about the poll. The first of them is you should bypass Denis Shanahan, and go to a guy at The Oz who actually knows something about polling – Mumble. He notes that the poll questions are slightly different – and also that Newspoll has slightly changed its accounting procedures since the last time the questions were asked.

The poll is not completely horrible for the Government (talk about faint joy!). When Mumble compares the views of voters on the causes of climate change since last year:


He found that 78 precent still believe it is occurring (much the same as December last year), and up a bit from February last year, though down from the climate-change wonder years (pre-Copenhagen) July 2008.

But all in all that’s a good base to work from. This is also the case when you look at the figures when asked whether or not people would be prepared to pay more to help slow global warming.


Mumble has compared like for like by removing those who don’t believe in climate change. As you can see support is slightly down, but is still there.

But the big figure – the one that got trumpeted in the front page was this:


Yep – only 30 per cent of voters were in favour of the carbon tax proposal.

But the real point of the poll is not the result – but the question:

Question: Based on what you may know about it, are you personally in favour or against the federal government’s current proposal to put a price on carbon?

Now ask yourself this – what do you know about the Govt’s current proposal to put a price on carbon? Well not much really. We know they will put a price on, but we don’t know how much, we know they’ll compensate the public and companies but we don’t know how much or who or when or for how long.

In fact we know bugger all. So it is little wonder 60 per cent are not in favour of it. Why would you expect voters to be in favour of something that they know will raise the prices of things but don’t know much more?

It all comes down to the Government's strategy. Last year they brought out the Resources Super Profit Tax (still the worst name in the history of bad Government names). They stated everything – gave out Treasury briefings and details and what not and whosits and yada yada. And businesses cried foul and said they hadn’t been consulted and that it would kill them and capital strike and sovereign risk and my Dad says it’s not fair you big meanies.

And the Government responded by saying – oh did we say this was our final offer, no we meant let’s negotiate and umm yeah all those bright shiny figures we produced for you to use in advert campaigns they’re just our first offer.

And so it all turned to poo.

Yesterday the PM was asked what is the closest we can actually get to a policy question on the carbon tax at this stage:

JOURNALIST: PM: I just wanted to go back, you said something about the carbon tax before. Anna Bligh today has said she doesn't back a carbon tax yet, either. When you’ve got people like Anna Bligh, and last week or the week before Paul Howes, good Labor people, saying they're now feeling nervous about this tax, and we need more detail, I mean, isn't it incumbent upon your Government to actually release more details sooner rather than later about the impacts of the carbon tax, the rate, the compensation that will be available? I mean, is that something on the cards?

The decision to do the Carbon Tax this way and not the RSPT way is a political decision (in a beautiful world you could do it the RSPT way and everyone – the Government, the media, the opposition and business would logically and calmly discuss the policy – but that’s a dream world that never was. So the PM needs to defend her political strategy:

PM: Well, the important thing here is to consult and get the details right, and certainly I understand that many Australians will judge their final view about carbon pricing when they can see all of the details. That's very, very understandable.

What is also very understandable is as a Government we wanted to take a highly consultative approach, to canvass views about the best way of getting this right.

Now, I invite you to consider the reaction to the alternative. If we had walked out and said, ‘Here is the full details of carbon pricing. We've created this in a black box. We haven't talked to anybody. Here it is, it’s immutable, it’s written in stone’, then the business community, trade unions, indeed, State governments, would have said ‘How do we get a voice in this process? How do we get heard?’.

Well, we've taken a different approach. We’ve announced the way in which carbon pricing will work as a mechanism, and then we are intensively consulting - allowing business to have a voice, allowing trade unions to have a voice, allowing State governments to have a voice in the design of carbon pricing. That's the right thing to do.

The details will be announced when they're ready. I know - call me old-fashioned, but I think what Government should do is not march to the beat of the political cycle, but march to the beat of the policy cycle and get policy right.

Aside from the irony of a PM who knocked off Rudd in his first term talking about not marching to the beat of the political cycle, her answer is fair enough. She makes a logical case – but will it work?

It appears from what she and Greg Combet said today that the details will be released in a few months.

That is when the real selling begins. This is all the phony war period. Abbott is laying excellent ground work because he doesn’t have to worry about facts or figures (always a good thing for Tony). He can say pretty much whatever he wants, and if Gillard or Combet or Swan try to say that it won’t happen – even if we are talking the most ludicrous claims such as Whyalla being wiped off the map – they are asked to supply proof, and they can’t (you know, aside from basic logic).

But when the details come out, then the Government will have some ammunition. But here’s the thing – they will also be giving ammunition to Abbott. There will be people worse off. People will lose their jobs. If the ALP does not grasp this, then they will be dead the minute they release the tax. It won’t be enough to say that when it comes in that all will be OK. Yes it will surely be nowhere near as bad as Abbott and the miners and steel companies say it will be, but that doesn't mean it will be wonderful for everyone.

The Government needs to be ready to defend its policy. And I mean defend it. Not spin it. No weasel words, no hey look over there at the tax cut and ignore the tax hike. I mean defend it. I mean go on TV night after night if they have to and get ready to be put under the grill. The lobbyists will be supplying the media with lots of “research”, so don’t worry about them not having any policy questions to ask. Gillard and Combet and Swan and Wong and Ferguson will need to be advocates for this as though they were defending themselves against the death penalty (which politically they will be).

They need to know the policy, and what is more they need to be able to convey to the voters a strong level of belief that they know what they are doing and that it is good for the country.

Sounds easy, eh.

Luckily they have an economic ignoramus in opposition – so that is where they should start – get the argument on an economic and environmental footing rather than strictly political. While it is political (and lacking details) you get Abbott saying stuff like this yesterday:

An Australia that can't make buses would no longer be a first world economy and yet that is the kind of prospect that we face if the carbon tax goes ahead.

I guess I skipped the chapter of Adam Smith’s A Wealth of Nations that pointed out the crucial thing for an economy is making buses. 

Today as well in his big pre-budget speech to the Victorian Chamber of Commerce, he was dolling out the economic idiocy (though this time echoing that by AWU leader, Paul Howes):

What Australia needs now is a steady, orthodox government which doesn’t over-promise, which treats respectfully the people its decisions will affect, which builds incrementally on our country’s strengths and which understands that its first duty is to do no harm.

and later:

The government should be able to give the guarantee sought by the Australian Workers’ Union that the carbon tax must not cost a single job

Do no harm? Guarantee no single job lost? Sorry, but economics is not medicine. If we had that attitude in the 1980s we would still have high tariffs and and second rate backwards economy. The measures done by Hawke and Keating were not painless – they sure as hell did hurt people. But they were for the good of the nation (the Liberal Party back then recognized this). Adopting the economic attitude of “first do no harm” is a way of saying – do nothing.

Later in his own speech he contradicts himself when he says:

The forecast return to surplus is not the result of tough-minded cuts to government spending like those implemented by Peter Walsh in the late 1980s or Peter Costello in the late 1990s. It’s not the result of tough-minded economic reforms like those of the Hawke or Howard governments.

Think no one was first hurt by those cuts? Think no job lost was guaranteed?

Sigh. Yeah there is a sideshow, as Tanner has written, but there also needs to be a Government that can cut through the crud through the force of its argument.

The polls at the moment are not good for the Government on the carbon tax. But the fight is still there to be won.


Episode Number 1,743 in the Series of “Shite Questions asked by Journalists at press conferences”.

Julia Gillard gave a press conference today. The topics ranged across the spectrum, and they went to Osama bin Laden’s death. Then this one was let rip:

JOURNALIST: Has there been any suggestion that the operation on the weekend was delayed until after the royal wedding?

Now first of all. What the hell?? The US Govt has been waiting until the right moment to be ready to take out bin Laden (or “capture” if you want), and you seriously think they’d give a damn about the Royals? I think operational aspects like the weather and moonlight might have been a bit more important to the timing of the mission than what the 2nd in line to the monarchy of another country was doing.

Now talk of them delaying their honeymoon due to the bin Laden mission is much more believable – though I seriously, seriously, seriously doubt the US would have given the UK Govt (much less the Royals) any more detail than “major security/ terrorist risk” – unless you think after all the news about the Royals’ phones being bugged etc that the CIA would trust them with the biggest secret they have (well this side of the moon landing being fake). And in any event that is the US telling the Royals to do something, not the US doing something because of the Royals.

And secondly, what did this journalist think Gillard would answer? Did s/he (not sure which) think Gillard was going to say “yes”?

Who asked it? No idea, I just hope it wasn’t the same person who asked this question of Tony Abbott yesterday:

QUESTION: Mr Abbott, a more personal question. The town where Osama was shot is named after a Major James Abbott. Any relation?

Well there’s that journalist’s Walkley entry right there….



Anonymous said...

Feeling like a disillusioned Lefty? Politics not doing much for you? Media and the world at large against you? Do you feel there's no hope?

Well good news. Grog has a blog post to make you feel better about the carbon price (still not calling it a tax, they should NEVER have... oh, there I go), the selling of the policy, the strategy involved, and the benefits of the policy as a reform. It'll be tough, he says, but that's the lot of a reformist government. Good post.

Magic in fact. This warm fuzzy feeling will last until this morning's barrage from the columnists. Then my world will come crashing in. It'll all start to look too damn hard, and I'll feel we're going to hell in News Ltd backed, Conservative hand basket once more.

Anonymous said...

I do wish the pundits would stop talking about "selling" a policy.

The legislation is written, debated in the lower house, amended and passed, sent to the senate, debated or sent to committee, debated again, passed, sent to the lower house and then given the Royal assent.

None of the rent seekers get a vote.

Anonymous said...

I prefer the essential report when it comes to polling on this matter. They ask about support for a carbon price without any further details, and then follow it with a question about the support for a carbon price with middle and low income earner compensation. Total support for a carbon price invariably rises, which demonstrates that labor is doing a bad job at explaining the scheme, and the Abbott is able to fearmonger by saying things like "great big new tax on everything," and Port Pirie will be "wiped off the map."

Victoria said...

I always wonder why the assembled journalists maintain a respectful silence when Abbott comes out with his non sequiturs and casually hyperbolic statements reflecting the grandiosity of his own opinion about what he can get away with saying in public. I'd be laughing in his face if I was there. Then I'd step back and, with cameras rolling, wait to see how he'd react. He doesn't do reactions well when pointedly criticised, as Mark Riley found out earlier this year.

BoothbyBob said...

Grog, ever thought about doing a live podcast once a week? How about Sunday at 10 am - I'll need something good to watch in that time slot!

olde boots said...

They really should name journalists that ask those sort of questions. At least try and make them accountable for their inanity.

Anonymous said...

On the make buses comment by Mr Rabbit. Do readers think manufacture? Then don`t, think assemble. Australia no longer manufactures, nuts, bolts, screws, split-pins, spring-clips etc. We probably import the other machined components too, (gear-box, transmission, engines, brake-discs or drums, compressors, air-conditioners, etc) We probably import the seats, plastic-parts, sheet-metal panels, windows, bumpers, pre-made hatches and doors. Don`t kid yourself, much of what is promoted as Australia made, is just assembled, like ikea.

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Arrow said...

Taxes are never “popular” but popularity is not their point. No one enjoys paying income tax but people generally put up with it.

The carbon tax likewise doesn’t need to be popular, it just needs to be tolerable. Gillard will hope that she can get it up and then people get used to it and the sky doesn’t fall.

My question is this - is Abbott actually digging his own grave by hyping up the disaster scenarios so heavily? Because it makes it more likely that the real impact will turn out to be less than he claimed, which in turn makes it more likely people will decide the tax “wasn’t so bad after all”.

He'll be looking good if he manages to scare the independents away from passing the carbon price legislation. But if it gets up, he's looking crook.

Especially if Labor (by some miracle) manages to get across the obvious point that Abbott prophesies disaster about everything - the flood tax, the mining tax and the carbon tax - and is wrong every time.

Anonymous said...

On the make buses comment by Mr Rabbit. Do readers think manufacture? Then don`t, think assemble. Australia no longer manufactures, nuts, bolts, screws, split-pins, spring-clips etc. We most probably import the other machined components too, (gear-box, transmission, engines, brake-discs or drums, compressors, air-conditioners, etc) We probably import the seats, plastic-parts, sheet-metal panels, windows, bumpers, pre-made hatches and doors. Don`t kid yourself, much of what is promoted as Australia made, is just assembled, like ikea.

Anonymous said...

In 2010 Mr Rabbit got so close just by keeping his head down. The Carbon Tax will definitely hurt those on the lower rungs of the economic ladder. Reporting from the lower rungs, I would suggest Joolya will be knifed, Independents, Labor and Greens will be killed in the next election.