The Gillard Government’s Carbon Tax legislation passed the Lower House yesterday, by the slenderest of majorities. Next month it will pass the Senate, in which the Australian Greens hold the balance of power. The eighteen bills of which this legislation is comprised will thus become law by Christmas, and the first taxes are set to be levied from the middle of next year.
Now I’m going to explain to you why none of this really matters.
The first reason is that this is a major structural reform in the Australian economy for which the Gillard government has no popular mandate. During campaigning for the 2010 election, Julia Gillard ruled out a Carbon Tax imposed by Labor.
The Coalition were, of course, opposed to any such tax, leaving the Greens as the only party supporting it. This means, in other words, that 88% of Australians at the 2010 election voted for parties opposing the tax. Following the election, facing a hung parliament, Gillard in her desperation for power, did a deal with the Greens and three independent MHRs: Andrew Wilkie (see previous thread), Tony Windsor (third from left, above) and Rob Oakeshott (right, above). Gillard—and by extension, the parliamentary party she led—clearly believed the end (power in the short term) justified the means (breaking faith with the Australian people in the long term).
Polling both before and since the 2010 election show the Australian public have been consistently opposed to the tax, by a margin of between two and three to one. This is despite Gillard spending massive amounts of taxpayers’ money on a media propaganda campaign to convince them otherwise:
As a people, for historical and cultural reasons, we Australians have an inherent mistrust of authority, a mistrust which is amplified by an order of magnitude when we are being patronized in this manner. Since the announcement of the Carbon Tax, Labor’s primary vote has fallen nationally to 29%. This is not a figure that fluctuates much in ephemeral opinion polls—it is a long-term structural shift in the Australian political landscape, as I detailed back here. At 29%, Labor can never again hope to form government in its own right; they have been wedged by the Greens, and rejected by the political centre of the electorate whom they have betrayed. As I have written earlier, this is a profoundly negative development in Australian democracy.
Reader benfrommo raised the point in the previous thread that, at the behest of the Greens, measures have been written into the legislation to render it profoundly difficult, if not actually impossible, to repeal. In granting carbon trading permits to designated emitters, Gillard is creating “value” ex nihilo (a dubious practice in any case, much like printing money), and elevating such permits to the legal status of chattels, which any future government will, on the face of it, have to buy back. I’ve responded to Ben as best I could, though I am sure the coalition’s legal team will devise mechanisms far more substantial than simply linking to a collapsed overseas market price.
Andrew Bolt has summarized all the above points thus:
- We didn’t vote for this tax
- We don’t want this tax
- We can’t get rid of this tax
It doesn’t get much more undemocratic than that.
The second reason this tax is doomed to fail is that Tony Abbott has served notice to the electorate and the business community that he will repeal the legislation, and dismantle its vast associated bureaucracy, as a matter of first priority as soon as he forms government. The only question remaining is when that will be. Over the past weeks I have detailed here at LibertyGibbert, scenario after scenario under which the Gillard government could fall next week, next month or next year. At the very best—and all the stars of Labor’s fortune would have to be aligned for this—Gillard will last until the 2013 election, at which point Labor face annihilation at the polls.
Reader Kitler asks, won’t Abbott be nobbled? Well, no. The Liberal party’s financial power base lies with the big business end of town. Unlike in the United States, where high finance seeks to make billions from carbon trading, here they are uniformly opposed to the tax. The element of Australian big business that stood to gain from carbon trading is represented by former Opposition Leader Malcolm Turnbull, Federal Member for Wentworth (the electorate covering Sydney’s wealthiest eastern suburbs). Prior to entering parliament, Turnbull from 1990 to 1997 was Managing Director and later partner of Goldman Sachs Australia. He is the wealthiest parliamentarian in Australia’s history; some estimates of his wealth put it at a value exceeding that of every other current MHR combined!
Following the 2008 global financial crisis, that element of big business lost pretty much all political influence and credibility in Australia (indeed, Turnbull’s presence has helped transform the term merchant banker in this country into a piece of Aussie/Cockney rhyming slang). Big business’s views in this country are better expressed by the Australian Trade and Industry Alliance, who are running a media campaign of their own:
To explain what happens next, I have to give you a bit of Australian civics, so bear with me here. The Australian system of government is a modified form of Britain’s Westminster system. The modifications reflect the historical reality that our nation is in fact a federation of six former British colonies, all of whom wished to retain some measure of autonomy under a united Federal government. Our Founding Fathers in the 1890s therefore made a close study of the United States’ congressional model, before devising an Upper House—named, here as there, the Senate—in which the states received equal representation, regardless of population. The Senate is therefore known as “the states’ house”, as opposed to the Lower House (the people’s house) which, like the British House of Commons and the U.S. House of Representatives, is comprised of members representing electorates of roughly equal population, thus expressing—ostensibly, anyway—the will of the people.
To pass a bill into law involves a series of checks and balances—essentially, a trade-off between states’ rights and the popular will. The Senate, having received a bill from the House, can write amendments or reject it outright, and send it back to the House. To obviate excessive Senate obstructionism, Section 57 of the Australian Constitution stipulates that if the Senate rejects the same bill twice within a three-month period, the Prime Minister may seek from the Governor-General a double dissolution of both Houses and a general election of both the House of Representatives and the Senate.
Why does this matter? Unlike the United States, where the terms of office of both Senators and Congressmen are fixed, our Constitution specifies only a maximum term: for the Lower House, it is approximately three years (the exact length depends on the availability of a legally suitable election date) whereas for the Senate, Section 13 of the Constitution decrees that half the Senate are elected for a term of six years, and the other half for three. However, in the case of Lower House elections which occur outside of the 12-month period laid down for Senate elections, the synchronization of Lower and Upper House elections becomes disrupted.
Now, at the 2010 election, in the Senate, 40 of the 76 seats were up for election (a “half-Senate” election). The Australian Greens, previously with only three seats, won one seat in each of the six states, giving them a total of nine; however, the new six Greens senators did not take their seats until 1 July this year, at which point they held the balance of power in the Upper House and were thus in a position to impose on Gillard the Carbon Tax—the same tax which Gillard, as Education Minister, had advised PM Kevin Rudd to drop as it was electoral suicide. Are you starting to see how she is being blackmailed?
But if the Gillard government falls before one year prior to the expiration of its natural term (that is, before December 2012)—and I have detailed in the last few months on this blog, the means by which this is likely to happen—then the Greens will find themselves in a terrible predicament. An Abbott coalition government coming to office before this date will not have the numbers to repeal the Carbon Tax. The Greens know their numbers in the Senate are an accident of history and are unlikely to be repeated in the forseeable future.
What are the Greens to do? Do they act as political pragmatists, espousing “the art of the possible”: side with Abbott (whom they loathe), vote down the Carbon Tax they extorted from Gillard and betray and disillusion all those Australians (predominantly young and impressionable) who voted for them, in order to maximize the length of their current hold on the balance of power?
Or do they act on principle, uphold the Carbon Tax, block Abbott’s repealing bills and give him the constitutional trigger he needs for a double dissolution, booting the Greens out of their seats before time, and forcing a general election which polls consistently show will consign Labor to oblivion and the Greens to irrelevance?
It’s a game of chicken: for Abbott, a test of nerve; for the Greens, a test of character. And for Labor? It isn’t a test of them at all. They’ve already been tested; and now, their chickens are coming home to roost.