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Carbon tax and Gillard: I can’t get past the lie!

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“We have made history!” said the Prime Minister, when her Government got the carbon tax legislation across the line. Understandably, the Greens would have been popping champagne or carrot juice, as this has always been its goal. However, the Labor Party should be a tad ashamed that they achieved this one small step for the planet and one big step for dishonest politics!

I’m sorry but I just can’t get past the lie. The PM Julia Gillard and the Treasurer Wayne Swan said before the election that there would be no carbon tax and so now that there is one, we can only conclude that we were told a lie.

The Carbon Crunch

Now I could possibly cope with this injustice if the climate change science was categorically correct, but it’s more a matter of faith whether you believe or not. This was my initial assumption when I wrote the book The Carbon Crunch, which was selling nicely until the former prime minister, Kevin Rudd, decided that his ETS was a vote-killer and ditched it.

Now, please don’t think this is the reason why I’m so down on the PM and her carbon tax — nothing could be further from the truth. The reality is that I have The Carbon Crunch MkII in the pipeline and so I will actually make money out of this lie! 

Then and now

And let me also share with you the conclusion of my book on the subject. This is it in a nutshell: while you can argue about the science, the reality is that most governments of the world and big businesses such as GE to IBM to Toyota and many, many more in big carbon footprint businesses such as airlines, were jumping on board the green train.

In addition there’s the positive snowball effect as more and more businesses, innovators and inventors take up the incentives to think outside the square on the subject — that green train looked unstoppable and its train driver was former US vice president Al Gore.

But I was wrong on the ‘unstoppable’ bit. I didn’t see the big tree across the track marked G-F-C!

However, the attendees at the Climate Change Conference in Copenhagen saw it big time and walked into the conference with an entirely different attitude. Unlike our fearless leader, they couldn’t incorporate a healthy regard for saving the planet in their plans to rescue their debt-laden and shrinking economies.

Like my book, when it came to really caring about green initiatives, the new thinking was then and still is — that was then, this is now.

The tax explained

So our carbon tax is old and pure Greens thinking, which is no surprise because Bob Brown and his team are very comfortable with their ‘back to the future’ thinking. They talk about regard for small business, and this is a new political bent or mantra for the growing political party, but their regard is more theoretical than practical.

The reality is that our new carbon tax, which begins on 1 July 2012 will slug the biggest polluters $23 a tonne of carbon pollution and this will rise by five per cent for the following three years and then the price will swing over to a market-determined price.

The experts are guessing and these guessers are often wrong. Just look at the recent forecasts by the Reserve Bank and Federal Treasury for simple measurables such as economic growth and inflation, and you then know how much faith you can place in these number crunchers.

Anyway the average household, whoever that might be, will see bills go up by $514.80 a year but the average family will receive around $525.20 in assistance each year. So what we have here is a painless carbon tax and while the wealthy will be running to turn off their in-house heaters and air conditioners — not! — the battlers will be able to go about their average life with a new carbon tax not hurting them one little bit. In fact, they will be $10.40 better off, which they could slam into the pokies provided they pass the Gillard Government’s pokies test.

Rising costs

The only believable conclusion is that a lot more Aussies will find that they’re not average households and a hell of a lot of small businesses with big fuel, refrigeration and electricity bills will find their costs of production going sky high. These groups will be changing habits and that’s what ‘going green’ policies should do, but it was supposed to be in a global environment where everyone in the world would be coming up with energy-saving, money-saving and profit-making innovations.

That was then, this is now!

Like it or not but Australia will be way ahead of the green reforming, carbon footprint-reducing curve and while it will be internationally, philosophically and politically a badge of honour that some — especially some Labor and all Greens politicians — will wear, it will put our economy at a short-term to medium-term disadvantage.

And this at a time when the world economy is slowing, iron ore prices have fallen by 30 per cent, unemployment is growing at home and the Reserve Bank is expected to cut interest rates by up to one per cent.

History in the making

As I have already explained, I am not 100 per cent sure about the veracity of the science but I am certain about the economics and this carbon tax is an imposition in the short-term on an economy that has a few obstacles in its way at the moment.

As I said earlier, the PM crowed, “we have made history” with her carbon tax but I think the Labor Party will be ‘history’ at the next election and the carbon tax, the Greens and a lie will be to blame.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Published on: Monday, November 14, 2011

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