Tuesday, May 5, 2009

We Know What The Opposition Opposes, But What Does It Support?

Last Thursday I told you not to be surprised to see the Federal Government agree to postpone the introduction of its Carbon Pollution Reduction Scheme. Yesterday, that’s exactly what the Government did. In an effort to have the legislation pass through the Senate, the government has made concessions which are significant enough to draw accusations of having performed a backflip. It has also been described as a broken election promise, but of course it was a promise that was impossible to fulfill without the support of either the Greens or the Opposition in the Senate. Confronted with the reality that any prospect of sticking to the original start date had utterly disappeared, the only possible choice was to accommodate the calls for a delay.

There have also been other changes: to decrease the initial price level of carbon and increase the number of free permits to be granted to trade exposed industries, along with the increase to the upper end of the range of possible emissions targets to 25% by 2020, conditional on global agreement. All of these alterations are adjustments of scale, not structure, so the emissions trading scheme is essentially unchanged, while attempting to overcome the objections of its critics. In that sense it’s not so much a backflip, as a long jump. Even so, it has failed to attract the required support from either the Opposition or the Greens.

While there is still room for negotiation, it would seem that the Government is becoming frustrated with the Opposition, calling upon it to outline its position and specify exactly what measures it would support. That’s understandable because the opposition was calling for a delay and an increase to industry support, and now that the Government has offered exactly that the opposition says it still isn’t good enough. But the Government has a point. It is not possible to negotiate with someone who doesn’t have a position, and at this stage it appears that the opposition does not have a clear policy on how the emission trading scheme should be designed. Instead, all it is doing is just opposing everything. Surely it is time to say what they will support.

Of course, everybody wants to come out looking like the winner, so it’s unlikely that one side or the other will simply agree to whatever’s on the table without some more haggling. Both sides are saying that they are still open to discussion, so presumably there will be further compromise by the time agreement is reached. But what if agreement is not reached? What if the opposition simply will not agree to the Government’s legislation? In the absence of support from the Greens, that leaves the prospect of another potential trigger for a double dissolution election.

While such a course of action is not the Government’s first choice, I believe that it is a door they would like to keep ajar. If they are constantly frustrated by having their agenda blocked in the Senate, a double dissolution provides an opportunity to break that impasse. It also has some added benefits. Firstly, the indications are that the economy will continue to become worse before it gets any better, and the timing of that is such that an early election could see the government going to the people before the worst of the recession erodes their popularity. Today's Newspoll figures would seem to indicate that such erosion has already begun. Secondly, there is still the prospect of Peter Costello being called up from the backbench to take over from Malcolm Turnbull before the next election. Going to the polls early would head off any such move before it happens.

In that case, the opposition would have no choice but to actually come up with a clear policy on emissions trading, something which so far they haven’t bothered to do.

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