- Herald Sun
- July 16, 2013
KEVIN Rudd is NOT ditching the carbon tax. He isn’t even cutting it. Your power prices won’t fall by a single cent on his announcement.
All he is doing is engaging in a classic pre-election ploy. At best, you could say, he was promising that “there’d be a lower carbon tax under a government I lead”.
The critical point is that it’s not even the classic situation that voters have to take on trust, that after the election, he doesn’t find out, were he to win, that, unfortunately he then just had to break that promise.
Like so many, including his immediate predecessor, before him.
No, that would just be ‘normal politics’.
But in this case, he simply doesn’t have the power to guarantee what the carbon tax price would be. Because what Rudd’s doing, is promising to leave it to be set by Europe and/or financial speculators.
You don’t have to be a political genius to understand that Europe will set its price, or try to set its price, in what it sees as the best interests of Europe. It won’t give two hoots for Australia or Australian business and consumer electricity users.
Similarly, you don’t have to be a financial genius to appreciate that speculators will want to, and will be trying to, sell any carbon dioxide emission permits they have, for the highest possible price. Again,
they won’t be aiming to look after Aussie consumers.
At the moment that European price might be $6 a tonne of CO2 emitted. That’s barely a quarter of the $24 price under the Gillard-Milne (Greens leader, Christine Milne) carbon tax from the start of this month.
Under Rudd’s promise, that price and so the price of the electricity you buy, remains locked-in until July next year. Indeed, it is the only thing that’s certain under his election promise.
We have to wait until July next year, before his promise to end the fixed (and fixed to rise) price, kicks in. It is just ludicrous to assume that the European price will still be $6 then. It could be. Equally it could be $12. Indeed, it could be $20.
That’s another critical point in all this. The climate change soul-mates in Europe of our prime minister, desperately want their price to be much higher than it currrently is.
They do so, for the same reason that our prime minister in his first incarnation set about committing to all this. They – and Rudd Mark One – wanted to make electricity not just more expensive, but very significantly more expensive.
Something, that just as precisely, Rudd in his second incarnation, now says is just awful.
Critically, says before the election. That he wants to bring relief to business and consumer electricity users.
The whole ‘point’ of this carbon tax/ETS (emissions trading scheme) IS to hurt everyone with higher electricity prices.
So both users, business and consumers, will use less electricity; and that power companies will switch to non-coal – much more costly, and essentially useless – forms of so-called ‘alternative’ energy.
This is the fundamental internal dishonesty of what Rudd is trying to con voters into believing. That they can have cheaper power and still save the planet.
If climate change is still “the greatest moral challenge of our time,” the person who said that – Rudd Mark One – has to want a higher price on CO2 emissions.
Not just higher than Europe’s current $6, but higher than our existing $24. And substantially higher. As Treasury’s own modelling forecast – at least $38, and climbing continually higher.
The flipside of all this, is that if the price did stay at $6, or similarly, low levels, it would render the Rudd-Gillard-Rudd government’s climate change policy even more totally pointless.
Because a global price sustained at those levels would tell us that the world was not getting serious about reducing CO2 emissions.
Not that we really need to be told that anyway. You just have to look at the reality of China’s emissions, where it increases its emissions every year by more than our entire emissions.
In short, if Rudd’s change does deliver lower power prices on any sort of sustained basis, the whole entire edifice of the very expensive climate change policy will be exposed as utterly pointless.
But for the policy to have any point, to be ‘saving the planet’, the low prices will have to be very quickly reversed.
With the price we end up paying under Rudd Mark Two’s new policy, not only unknown and unpredictable, but totally out of our control.
There’s a critically important further point, which builds on this to expose the dangerous path Rudd has now taken by placing control of our carbon policy in the hands of Europe.
As the opposition’s Malcolm Turnbull pointed out on the Fin Review‘s program on the Nine Network on Sunday, the term ‘carbon tax’ is used in two ways.
One, as an explicit tax levied by the state, just like the excise tax, say, on cigarettes. The second, is as a generic term, ‘taxing the use of carbon,’ by in some way putting a price on the emission of CO2.
Either way – and this is me speaking, although there was just the glimmer of a suggestion that Turnbull might be starting to see the light – the exercise is sheer and utter insanity and stupidity.
But at least, with a (real) carbon tax – as the existing Gillard one was, in its pre-ETS form – we are paying the money for these permits to ourselves. As in, to the government.
In this form, the carbon tax is like a second GST. At best, no worse than any other indirect tax, whether the GST or an excise.
But with the ETS, open to global markets, we will be paying some – most? all? – the money to foreigners, to buy their ‘permits.’ Whether to legit (sic) ones in Europe or to the ubiquitous Nigerians.
This money, which even Treasury estimates will – and indeed, should – run into billions of dollars a year, will be money paid to buy . . . absolutely nothing.
It buys nothing but a bit of paper, that says in effect: you are given permission to keep your power station open.
Opposition leader Tony Abbott put it precisely right yesterday: it’s a payment for the “non-delivery of an invisible substance to no one.”
But payment of very real dollars out of the pockets of all Australians.