Backing tax on workers no way to stop Abbott

Tony Abbott, backed by radio shock jocks, climate deniers and the big polluters lobby, has called for a “people’s revolt” against a carbon tax.

About 1500 even turned out to an anti-tax rally in Canberra heavily promoted on Sydney talk back radio, although it was still dwarfed by the 8000 at an earlier climate action rally in Melbourne against the deniers. No one takes Abbott seriously when he parades his phony “direct action” plan on climate change. This is a man who once called climate change “absolute crap”—and still won’t accept the science. He wants to derail the chance of any serious action.

But his warnings about the impact of a carbon tax do strike a chord—hypocritical as they are from the party that gave us the GST and WorkChoices. Nor are they simply scaremongering. A carbon price will drive up power bills, and government-provided compensation will not make up for this.

The government claims low and middle income earners will actually get more compensation than they need.

Climate Change Minister Greg Combet has cited the GST compensation package as a model. The then Howard government granted an increase to pension payments and tax cuts for everyone else. But despite government modelling that said people would not be worse off, compensation was nowhere near enough. The Sydney Sun-Herald interviewed an aged pension couple who kept a detailed diary of their spending between July and December 2000, the six months after the GST was introduced. They paid $720 in GST, but their 4 per cent pension increase was just $375. There were widespread protests by pensioners who were suddenly struggling to make ends meet.

Despite talk of a booming economy most working people are not swimming in money. A survey in November showed half of all home loan customers of working age were in mortgage stress—spending more than 30 per cent of their income on repayments. The cost of living rose 4.6 per cent in the year to September according to JP Morgan, well above most pay rises.

In the face of the right-wing mobilisation, the response of The Greens and much of the climate movement has been to rally behind Labor, backing a carbon price essentially without any criticisms. At the rally for a price on pollution in Melbourne, GetUp’s national director told the crowd the movement should aim to, “create the political space for the work the multiparty climate change committee are doing right now”.

This is a huge mistake. The climate movement will not be able to win the mass support needed for serious action by telling workers to take a cut in their living standards. According to an Essential Media poll in March, just 35 per cent supported a carbon price, although 47 per cent wanted urgent action on climate change.

We need to raise demands like taxing big business and the major polluters to fund renewable energy (see here). A carbon price is not a tax on business—it will not be paid by the polluters, because the costs will be passed on to consumers.

Carbon price won’t work
It is already clear that the government’s carbon price won’t deliver renewable energy. Modelling shows that at most it will see an expansion of gas power—still a fossil fuel (see here). The multiparty committee is going to deliver a rebadged CPRS. The initial fixed carbon price (or carbon tax) will become a carbon trading scheme, like the CPRS, after just three to five years.

Labor has already indicated that the massive compensation for big business under the CPRS will be the starting point for negotiations around its new proposal. Greg Combet told Lateline the government’s over riding concern is to have, “engagement from members of the community and important stakeholders and especially the business community”.

The Greens have tied themselves to this process, by helping establish the multi-party committee and backing a carbon price. Given the political investment they have put into the committee, they have made themselves hostage to whatever flawed policy it produces. But serious action on climate was never going to come through parliamentary manoeuvres in the absence of a mass movement.

Falling in uncritically behind a carbon price helps Labor to present it as the only step needed on climate change.

But even advocates of a carbon price like the Climate Institute admit it won’t be enough on its own. If the movement does not clearly explain why it won’t solve the problem, there will be no political space to push for demands that will actually work—like government spending on renewable energy. The government will have sold the argument that it has already acted.

We need to begin laying the political groundwork for a fight for solutions that can work. Opposing a carbon price is necessary to doing that.


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