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Issue #1564      12 September 2012


Smoke and mirrors

The cynicism of the Abbott-led opposition is plain for all to see. But it has a point. Several of federal Labor’s grand-sounding “reforms” have the unmistakeable signs of a “smoke and mirrors” routine. The dental scheme, the National Disability Insurance Scheme, the response to the Gonski Review of school funding and several other much-vaunted schemes appear to commit huge volumes of taxpayer dollars to changes to take place sometime in the future when the Gillard government may be little more than a memory. Implementation of the plans often relies on cooperation from unwilling state partners and there is no apparent way to protect the “reforms” with an “Abbott-proof fence”, i.e. to prevent a future Coalition government simply rescinding them.

Australian voters have had long experience of the process. A new government is elected, the country’s books of account are supposedly examined and the situation declared worse than admitted by the disgraced, outgoing administration. A “razor gang” is hurriedly assembled. Queensland Premier Campbell Newman employed former federal treasurer Peter Costello to put on this performance recently. Public sector job losses are expected to top 14,000 and many services to the community are to be cut.

The public is discovering that the Mineral Resource Rent Tax (MRRT) is not going to spread the benefits of the on-again, off-again mining boom across the community. It now knows that the super-profitable transnationals involved are being well-compensated for the effects of the curious, bureaucratic “impost”. When BHP Billiton recently announced it was shelving its new mine at Olympic Dam, it noted that the MRRT or “mining tax” wasn’t a factor in the decision because it doesn’t even apply to copper and uranium.

Last week, it was revealed that operators of Australia’s dirtiest power stations will continue to receive carbon tax compensation payments from the federal government totalling $5.5 billion despite the failure of talks aimed at mothballing the worst offending power-generating facilities. The companies were demanding a higher price for closing them than was on offer.

Alinta Energy in South Australia announced that it was losing interest in a solar thermal replacement for its ageing Playford power station near Port Augusta. Some of these companies will receive more in carbon tax compensation than they are obliged to pay under the scheme. Profits are healthy thanks, also, to the lower price for coal on international markets. The centrepiece of the government’s Clean Energy Future package has disappeared.

In other developments, the floor price for carbon emissions of $15 a tonne was removed late last month to enable a future carbon emissions trading scheme in Australia to be linked to the one operating in the European Union. The price per tonne in Europe is currently about A$10. Most experts agree that a price around that mark will do absolutely nothing to change the carbon-emitting habits of transnational corporations.

The federal government claims the latest backflip will enable Australian companies to buy “carbon credits” in Europe, i.e. they will be able to buy permits to keep polluting as usual from sellers in Europe. Australian businesses will be able to do this from 2015. The scheme will operate in both directions in 2018, if everything goes according to plan. That’s a big “if”.

Ultimately, backers of these grand trading schemes want the concept to go global. In that case polluters in developed industrial countries will be able to by credits from poorer countries who could well be selling off any possibility for future development.

In Australia, households are being compensated for price increases that can be traced to the introduction of the carbon tax. The major increase will be in power bills. So we now have a situation where the public is being subsidised to keep using electricity at the same level and buy it via a retailer from suppliers that have shown little inclination to shift to clean, green, energy sources.

The lack of effective measures to combat climate change is a scandal. The situation will not be improved by the election of an Abbott government. The methods might change but the whole reckless, pro-corporate agenda will be maintained or even accelerated. The task ahead of left and progressive forces in the country is to build an effective political alternative and fast!

Next article – Greens leader Christine Milne’s first visit to WA

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