16
Jul
2015

Shorten in Further Serious Difficulties

With the leakage of a “discussion paper” on climate change policy, apparently drafted by Labor’s Shadow Environment Minister Butler, Shorten’s credibility is further reduced. Presumably prepared as a possible response to Abbott’s forthcoming announcement on Australia’s post 2020 emissions reduction target, the paper canvasses Labor support for the (re)-establishment of an emissions trading scheme and also proposes a special reduced rate of fossil fuel emissions for electricity generation and for vehicles, both of which would add to their prices. Accompanying these changes would be a policy supporting a higher target for the supply of energy from renewables.

Abbott’s initial response is to suggest that Labor is “reintroducing … a triple whammy carbon tax on households, on power stations and on cars”. Shorten and Butler say that no carbon tax is envisaged: it’s “only” an ETS that would put a cap on emissions similar to that in parts of the US, Europe, China and other countries. But as Terry McCrann points out below, a trading scheme that forcibly adds to the cost of using fossil fuels would be a tax (albeit a fluctuating one), as would any additions to the production costs of electricity and the cost of cars. McCrann likens the proposal to an increase in the GST.

The Financial Review reports that business is not enthusiastic about Labor’s possible scheme (AFR- Labor’s C Change Policy). Andrew Bolt’s article in the Herald Sun (Bolt on Labor’s C Change Policy) has highlighted some “plain facts” which confirm the uncertainties in the dangerous warming thesis and suggest that only some of the increase of 0.7% in published temperatures is due to human activity (Bolt should have said “once account is taken of inaccurate measurements, possibly only a small part” of the increase). Nor should it be overlooked that whatever “little” Australia does, with a contribution of only just over 1% of world emissions it cannot have any significant influence on the effect on global temperatures.

Thus on top of Shorten’s problems at the Royal Commission, he now faces the difficulty of  being unable to explain why the proposals are not taxes. I imagine that Abbott would be able to provide examples. Abbott should also publish a short paper on the much higher cost of using renewables – wind farms cost about three times more than coal and the cost of subsidies for solar panels is about the same as the total cost of coal (see reference to Moran’s estimate in my Commentary of 28 June).

Shorten also faces the question of who leaked the paper. Newspaper reports suggest that it was “tightly held”. Some commentators suggest that it was a message expressing internal dissatisfaction with Shorten’s performance, possible designed to end Mr Shorten’s leadership, or “kill Bill”. Does Shorten have a Turnbull?

Interestingly, a report today in Workplace Express indicates that since 2003 the membership of AWU has dropped by 38% (AWU members Down 38% Since 2003-04). But despite the AWU’s heavy involvement in Australia’s car industry, it appears that no deal was done by Shorten before he left for Parliament to help reduce that industry’s costs and save jobs there.

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