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50 responses to “Even the devil sometimes speaks true? Rudd, Labor and the 2010 election”

  1. sr

    The tax review comes out tomorrow which I presume will offer a range of policy options for the Government, as well as giving them the opportunity to talk about something apart from climate change. In fact, I think the next election will be about tax rather than climate change, as EVERYONE takes an interest in their hip pocket, whereas the climate debate, important as it is, is not easily followed or understood by many people.

  2. Mark

    Yep, and Abbott already has his scare campaign on the Henry Tax Review ready to go. So there’s still an open question about what bits of it they want to present as a positive message, and which bits will get trashcanned as a political imperative.

  3. Doug

    Do you mean 2010 election?

  4. Terry

    Its the NSW government that faces the gallowsvoters in 2011.

  5. Mark

    Oops, yes. I’ll fix it.

    *Though in theory there could be a federal election as late as April 2011.*

  6. paul walter

    So Albrechtsen doesn’t like the “talk but no pain” bit.
    Seem to remember this is the type of mentality that got “Sado-economics” up as a moniker for neolib, back in the Walsh/ Thatcher era.
    Except of course when “pain” is shared about to the unthinkable point where it becomes visited also upon the inflicters.
    Then is a loud victimhood/entitlement type wail of outrage heard to the very cornermost reaches of the empire.

  7. rainbowdog

    I don’t think the government will ‘downplay climate change’, as such but there’s no way they’d be so silly as to go to the election on it as the one big issue. They will present a wide agenda of issues appropriate in a general election. Their initiatives on climate change and other complex and/or emotive issues (refugees!) will be assessed by the voters in the context of what the govt did about the financial crisis mainly. What they did with that highlights the govt’s basic priorities: looking after battlers (even though too many well-off folk got the stimulus handouts), building schools and community facilities, and helping householders do something to put energy efficient things into their homes (the insulation saga etc.)-ie. doing something about climate change. Plus, everyone can see they’re hardworking and the govt will push the question, who can you trust? The Libs look very shakey on the latter.

    August election?

  8. Mark

    Sure, I didn’t mean that climate change would disappear off the radar altogether, but rather that it would not be the central issue in partisan debate that it’s been lately.

    What you’ve outlined, though, is a defence of the government’s record, combined with an attack on the opposition. I think they will also need some new big initiatives, and to do a better job of unifying the themes arising out of their various priorities. That will require something of a more partisan line, I would think, as opposed to the ‘safe pair of hands’ persona Rudd has (though no doubt he’ll try to do both, and it may well be people like Gillard and Tanner who develop the more political themes).

  9. PeterS

    Well, unless Rudd makes it clear that the climate is *the* problem he faces, and starts trying to make everybody realise this, I will be going as green I can.

  10. Nickws

    Yep, and Abbott already has his scare campaign on the Henry Tax Review ready to go

    How would the Monk go against the Henry review?

    I’m searching my mind for a political analogy, nothing is coming up.

    Not that it’s impossible for Mr Integrity (my arse—what are people thinking? Nobody is impressed by Leftwingers looking for the silver lining in the toxic Abbott cloud) to try and pivot against a simplification of the tax system. But it would only serve to demonstrate that the Liberal Right’s too-clever-by-half politics renders them unworthy of ever regaining government.

    It would certainly make KRudd’s lust for safe political capital look like the best and safest bet for this country.

  11. Labor Outsider

    Interesting but not convincing. The next election campaign will involve a combination of:

    1 – defense of its macroeconomic record (a plus given what could have happened to the economy and the spoiling tactics of the opposition).

    2 – a defense of its broader record (we kept our promises)

    3 – attacks on the opposition (climate deniers, economic dunces, still in the thrall of work-choices)

    4 – new policy initiatives in key areas (health, tax, education, environment) that though arguably good policy, will not be radical, and will be designed to appeal to middle-ground voters.

    The comparison with 1984 is not a good one because:

    1 – This government is currently more popular than the Hawke government was then.

    2 – The opposition is in more disarray now than then with arguably a less appealing leader.

    3 – The Hawke government was pushing through a number of quite tough and sometimes unpopular reforms

    4 – Hawke went for an early election that the public did not think was necessary and the election campaign itself was far too long.

    While from a policy perspective I have sympathy for yours and Janet’s argument, I am doubtful that there will be short-term political costs. Indeed Rudd’s outrageous success in the polls suggests that his political strategy has been a success. I expect the government to win the next election with quite a convincing majority.

    The costs of Rudd’s strategy are more likely to show up in the 2013 election and beyond. Most genuine reform does necessitate pissing some people off, and over the longer term there will be a growing disconnect between the improvements and changes that Rudd promises and what people observe, unless deeper reforms are considered. The next term of government will determine whether Rudd goes down as a great leader in the Hawke tradition or a window-dresser like the state premiers Carr, Beattie and Rann…

  12. Mark

    @10, as I commented in a previous thread, Abbott is obviously not averse to outright lies. Just as the CPRS is not a “great big tax on everything” because it’s not a tax, he’ll also have no compunction in saying “The Henry Review means more taxes”. It would be nice if some of the commentators or pundits, or even the journos who report his lies and rubbish as straight news called him on this, but I may be being overly optimistic there. His one tactic is going to be to repeat his nonsense as often and as loudly as possible, in the hope that sufficient voters in marginal seats will believe him. His view is that explanations of what the ETS or the Tax Review really portend will sound complex, compared to the simplicity of his lines.

    @11, you may well be right, LO, and yes, the 84 analogy is not an exact one. But I’d hope that the Ruddster’s advisors might start to see signs in the polls of some degree of weakness and disillusionment. It will hit through sooner or later.

    I’m also not convinced that the opposition is in the same sort of disarray as it was pre-Abbott. There’ll still be plenty of loose cannons, and Joyce is a major negative, I think, but I don’t expect the moderates to give Abbott as much grief – by a long shot – as the right gave Turnbull. Abbott’s frontbench incorporated a lot of the moderates who would have voted for the ETS in the Senate, for instance. He learnt something from Turnbull’s use of frontbench solidarity, and I also think the moderates are a less rambunctious bunch. And the election can be expected to produce some more discipline.

    Turnbull, himself, I suspect, will increasingly start to sound fairly indistinguishable from the Labor party, and that will diminish his chances of being a pivot for any backbench dissent, and for being a useful political weapon Labor can wield.

  13. Mark

    Incidentally, I just heard on the news that although the Henry Review is being delivered to Swan tomorrow, the government doesn’t plan to release it until sometime in the New Year. I suspect that’s to enable them to formulate a response which would rule out any suggestions that might be in there that could be politically damaging.

  14. John D

    I think it is open at the moment. Abbot has to accept that it isn’t the leaders job to be chief attack dog and put more effort into presenting a calm rational face. His anti tax based attack on the ETS is just reminding us how big an infrastructure hole we got into because of Howard’s obsession with minimizing taxes on the rich. In addition, it looks like he wants to lend support to the “no climate action faction” rather than concentrating on presenting a better action plan.
    Rudd has to focus more on getting more runs on the board before the next election and accept that a CPRS that is not going to have any real effect before the election after the next one does not represent runs on the board.

  15. Razor

    Mark – if the government is taking money from someone then it is a tax – or do you believe the Medicare Levy isn’t a tax because it is called a Levy?

    John D – “obsession with minimizing taxes on the rich” – I suggest you research our lovely tax and transfer welfare state to see where thw real tax burden is being carried. A tip – it isn’t the poor or middle class.

  16. Mark

    Razor – an emissions trading scheme caps the amount of carbon that can be emitted, and requires companies who emit carbon to purchase permits, which are tradeable (though in the case of the Rudd CPRS, there’s lots of freebies). It’s not a tax or a levy, which requires the payment of a fixed percentage of income to government for either general or hypothecated purposes.

  17. Lefty E

    Are water rates a “tax” Razor? It used to be free too, but now you have to actually pay for what you use. Boo hoo.

    I believe its called a ‘cost’. It was previously a submerged cost.

  18. Eat The Rich

    Maybe all this would mean something if they actually managed to complete their homework before handing it in: http://www.abc.net.au/unleashed/stories/s2777329.htm

    This is a piece from a bloke (Barnaby Joyce) that wants to run the nations finances.
    Rudd may well need to be called to account, but I can’t see this mob being able to do it.

  19. Peterc

    Swan has the Henry review and is sitting on it – no release yet. Top secret apparently while they sort out their political strategy around what to let out when and what recommendations to implement.

    Personally, I think income tax has grown to become a huge burden on everyone who has to pay it. A whole non-productive services industry has grown up around completing and lodging tax returns.

    I will be interested to see if any congestion tax gets up. It has worked a treat in London. The captains of the motor vehicle and oil industries would of course oppose it – no doubt some unions would too.

    I don’t think the game plan on both sides for the next election will change a lot from where it is now. Neither will do anything significant about climate change, other than emit more hot air on the subject.

  20. Chris

    LeftyE @ 17 – I think you could argue that a component of water rates is in fact a property tax. At least in some states there is a fixed supply charge which is based purely on the value of property and not at all related to the amount of water you use (if any!).

  21. hannah's dad

    Lefty E at 17
    Water rates was previously a…’submerged cost’.

    I like that.

  22. silkworm

    The root cause is our failure to make polluting fossil fuel energy more expensive than clean energy. We must put a price, a rising price, on carbon emissions.

    There are two competing ways to achieve that price:

    One is Tax & 100% Dividend – tax carbon emissions, but give all of the money back to the public on a per capita basis…

    The alternative to carbon tax and 100% dividend is Tax & Trade, foisted on the public under the pseudonym ‘Cap & Trade’. A ‘cap’ increases the price of energy, as a tax does. It is wrong and disingenuous to try to hide the fact that Cap is a tax.

    – James Hansen


  23. Mark

    A ‘cap’ increases the price of energy, as a tax does. It is wrong and disingenuous to try to hide the fact that Cap is a tax.

    That makes no sense, silkworm. Hansen is just playing with words. Lots of things increase prices. They’re not therefore taxes because taxes also *can* increase prices. It’s not just a disingenuous and self-serving argument designed to support his own position, it’s one whose logically fallacious nature should be immediately obvious.

  24. Thomas Paine

    It is fairly difficult to not fall into the meme being propagated by the murdoch media here and the USA that these left wing governments are do nothing and all spin. It is difficult to understand why so many are influenced by this nonsense.

    The Rudd government is probably one of the most successful first term governments, very few stuff ups showing iron discipline, only one minister gone, and that on the back of Chinese race baiting by the media. Rudd when under heavy fire from Turnbull at the beginning of Ute-gate showed unequivocally that he is very tough and works well under pressure.

    And people now just gloss over Rudd Labor saving the economy from recession as though it was a minor thing. We forget that Rudd did what few do with pump priming – hit early and hit hard. Rudd hit the economy with stimulus right on the curve with the right amount of money and right mix. This is a failing do nothing government? huh?

    Hell it has only been two years and one of them was taken up with the GFC. And this do nothing meme – has anybody gone back and actually listed all the things the govt has done?

    The whole con by the media is that Rudd has only dealt with one major issue, the GFC so where are the other big things he has done like declaring war on someone, buying NZ or something? Yep a do nothing vulnerable govt.

    The only thing that Rudd is really vulnerable on is the stratospheric personal and TPP numbers he has been getting. They might fall down to a Labor record 53/47 at an election as though that is some sort of failure!!

    To be frank after 11 years in the wilderness Labor has taken over government and run it like it has never been out of power with very few hitches. That is remarkable and testament to the talent they have.

    So how is Abbott and the Liberal Party going to get at Labor? Pick any issue at all and Labor in the public’s eyes owns it according to a few years and more of polling. Boat People is the only issue the Libs have that they get a little bit of movement on – but that is dangerous ground that can backfire on them.

    Abbott coming out and attacking Labor in an election campaign will have zero effect. No amount of attacks for three years has affected Rudd or Labor. Attacking doesn’t work.

    And for interests sake you will note that Rudd has been positive right from the beginning until now. And will remain so.

    Abbott still cant get rid of the Workchoices Albatross either or the extent of his and others CC scepticism.

    Undoubtedly the right wing media will pushing the edges of truth to try and help Abbott. But it wont be enough.

    I am astonished that people think that Rudd has under achieved. They should go back and look at the last 100 years of governments to see what has been achieved in two years (one of them having to be consumed by GFC and CC).

  25. Labor Outsider

    The CPRS is effectively a tax – economists always model it as such – what makes it different from a normal tax is that it is variable because it depends on the demand and supply of permits in a traded market – nevertheless, it acts as a tax on processes that release fossil fuels within Australia that is proportional to the amount of CO2 released by that process.

  26. Mark

    Maybe that’s how economists model it, LO, but what Abbott is trying to imply by calling it a tax is something else again. Particularly with the claim that it’s “on everything”. There might be some form of casuistic mental reservation he’s practicing enabling him to believe he’s telling the truth, but the meaning he wants to convey is a lie. In this, he’s even more brazen than his hero John Howard imho.

  27. Paul Burns

    True, Abbott is more brazen than ratty but he hasn’t been doing it long enough for people to wake up to him yet.

  28. BilB

    Abbott is playing a game of exciting extremes. He is doing his best to push sensitive buttons in as many sections of the population as he can to gain attention. To do this he is using whatever twisted (often conflicting) logic works. As the next election approaches this noise will intensify with every one of his “waxwork” figures pushing hard on those buttons. It will be ugly. Rudd has a reasonable chance of pushing his useless CPRS with Turbull determined to cross the floor, pulling an unkown number with him (he only barely lost the vote).

    The only way that Rudd can command a safe victory at the next election is to have some solid and convincing energy infrastructure under way. CPRS is now a muddied idea and CCS is contoversial as even the most basic of thinkers can see the fault in sweeping the dirt under the rug. There are a lot of things that can go wrong in the next year and a half. If oil prices start to rise on top of the next electricity price increase while at the same time there are significant solar energy infrastructure initiatives in a number of other countries, and Australia has still not acted preferring to wait for CCS to become real, then Global Warming for Rudd will become a political cooling in the face of a screaching, vaguely plausible, attack from Abbott and his hyenas.

    People are not going to look back at the Global Economic Crisis (that is the downside of effectively dodging the recession bullet as it was with the millenium bug), they will be looking forward to surviving the future. And if there is nothing solidly convincing for the people to hang their hopes on, then the likes of Abbott will gain significant ground. The Greens will also strengthen, but not enough to command the day. The combination of both could weaken Labour enough to make them ineffective. This would be the worst outcome at a time when the world needs continuously strong leadership.

    Frankly, Rudd does not come accross as being strong. He was an appealing contrast to the horror of the ball busting Howard and horrifically incompetent Bush personas, but 2 years on he really needs to have grown to carry some of the command that Obama carries, as it is Obama against whom he will now be measured. In this changing political illumination Abbott just might carry some appeal, particularly if he starts to actually make some sense. There is a risk that because Abbott fluctuates so wildly (something that we all are capable of occaisionally) the public might block that history out putting it down to “thinking out loud” and only focus on what Abbott says at the time of the election. If that comes accross as being strong and decisive, then Rudd will have a real fight on his hands. Rudd from here on has to sart to get things right, to getting solid completions. The “we are studying the problem” will no longer work for him.

  29. Thumbnail

    I think the Obama ‘brand’ has damaged left wing governments everywhere. His approval ratings are plummeting, because he is surrounding himself with the lunatic left rather than the rational slightly left of centre left. He is struggling to fix a very damaged economy. Yes, that is Bush’s fault for not fixing up Carter’s and Clinton’s stuff ups, but never mind that. The Americans elected a Trojan Horse and now that the enemy is seen to be emerging, they are freaking out.

  30. Paul Norton

    LO #11, which tough and unpopular reforms do you have in mind from Hawke’s first term? As I recall the 1980s, the assets test on the age pension and deregulation of the banking sector are the two which stand out from the first term, and probably more of the seriously tough and unpopular policies (e.g. resiling from the intent of the original Accord through wage/tax trade-offs which preserved take-home pay at the expense of the public sector revenue base, tax reforms, austerity mesures in response to the “banana republic” crisis) occurred during the second term.

    Two other things about the 1984 election which (as yet) don’t apply to the current government:

    * Bob Hawke being seriously distracted and unsettled as a result of his daughter’s personal difficulties at the time;

    * the surprise emergence of the Nuclear Disarmament Party (of course the Greens are bigger and more enduring than the NDP but no longer have the element of surprise).

  31. Senexx

    Firstly, I see nothing to disagree with in the Original Post.

    Secondly, I see the looming federal election like this, the whole CPRS thing backfires, Labor loses a few seats, and Rudd barely retains power ala 84.

    Or I see the public basically ignoring Abbot & Co because of the pre-existing Abbott brand and Rudd gains a few seats.

  32. reb of Hobart

    I heard Abbott on TV the other day blabbing on about how he represents “the Aussie battlers.”

    Sure only a fool would believe such nonsense.

    There’s only one person who thinks that Tony Abbott has a chance of winning the next election and that’s Tony Abbott.

  33. drscroogemcduck

    Razor – an emissions trading scheme caps the amount of carbon that can be emitted, and requires companies who emit carbon to purchase permits, which are tradeable (though in the case of the Rudd CPRS, there’s lots of freebies). It’s not a tax or a levy, which requires the payment of a fixed percentage of income to government for either general or hypothecated purposes.

    the proposed CPRS doesn’t limit the amount of carbon that can be emitted. you can purchase permits from the government at 1.1 times the average auction price. would you agree a carbon tax is a tax? if so then ETS is a tax. if not then at least your are consistent. i think it is a bit rich to call abbott a liar when a strong argument can be made that the ETS proposed is a tax.

  34. Mark

    A carbon tax is a tax because it levies a fixed rate on emissions.

    I’ll reiterate what I said @26 – Abbott is trying to create a highly misleading impression with his talk of “a great big new tax on everything”. In my book that’s a lie.

  35. Don Wigan

    The semantics of whether it is a tax could perhaps be avoided if Rudd is forced to deal with the Greens and perhaps adopt a carbon tax. The Hansen example cited by Silkworm may even offer a neutralising factor against a demagogic campaign aimed at carbon tax.

    eg If the carbon tax collected is returned equally to individuals at 6-monthly, maybe even quarterly intervals, the pork-barrelling effect might offset any attempts at a scare. Although there might be lots of valuable public usages for this revenue. especially to subsidise greening activities and to compensate losses from high-carbon users, the direct return to individuals would go down well with voters.

  36. Fran Barlow

    If the carbon tax collected is returned equally to individuals at 6-monthly, maybe even quarterly intervals, the pork-barrelling effect might offset any attempts at a scare.

    Carbon taxes are the wrong tool for the whole system (thopugh they may be useful at the margins). You need a cap to ensure that there is enough uncertainty about the future price of CO2 emissions to force change.

  37. Fran Barlow

    Oddly, scrooge, I agree with Razor.

    An ETS is not a tax — any more than its sensible to describe a stock purchase price as a tax or the issue of the currency as “a great big new tax”. If you got to an auction and bid for goods, are the payments you make when winning a bid “taxes”?

    The reason it is being called a tax is because it allows Abbott to be sen as running a populist campaign against big government rather than a campaign in favour of free atmospheric dumping of industrial effluent.

  38. Political Animal

    The purchase of permits is more like paying for garbage collection. The CPRS is probably dead given the failure at Copenhagen.

  39. keIthy

    Abbott has negative momentum already! Prepare for metrosexual tears on the main street of wherever you are next year!

  40. Labor Outsider

    Look, the ETS acts like a tax on carbon intensive goods and services. The counter to Abbott is not to dispute that it has many of the same effects as a tax, but to point out the benefits – that is a way of making firms and households pay for the social costs of the pollution their actions generate. In addition, the income effects of the additional price will be offset by compensation. IMHO the government is making a mistake in not talking openly about the economic impacts, or explaining in simple terms how it will work. Their current tactics give the impression that they either have something to hide or that ministers don’t understand the CPRS themselves. If a minister can’t explain in lay terms in five minutes how a policy will operate, what it is supposed to achieve, and why it achieves it better than other instruments, then either the policy has to change or the messenger has to change.

  41. Labor Outsider

    Paul, also in the first term Hawke resiled from a number of campaign promises because he claimed (rightly) that the Fraser government had hidden the extent of the budget problems. Hawke formed the expenditure review committee in the first term and started down the road of fiscal consolidation. That choice meant that there were few goodies to throw around during the election campaign. The dollar was also floated during the first term and there were also tariff reductions in 1984, accompanied by Button’s first vision for the future of the car industry, which involved a plan for a significant phasing down of car tariffs over time. So, while it is true that many of the major reforms took place in terms 2 and 3, many also took place or were formulated in term 1…

  42. wbb

    a way of making firms and households pay for the social costs of the pollution their actions generate

    Yes. People understand that wasting water is anti-social and they support restrictions pretty much – so this should be achievable with carbon pollution too.

  43. PeterTB

    any more than its sensible to describe a stock purchase price as a tax or the issue of the currency as “a great big new tax

    Fran, the Government would be issuing permits into circulation at pretty much no cost of production, and pocketing substantial revenue having provided no useful benefit to the purchasers. In contrast, when you puchase shares or stock, you have something of real value for your money!

  44. BilB

    [email protected]

    The CPRS is a tax in the sense that a “drain on resources” is “taxing”. To the people who primarily carry this load “tax” is what they will be thinking. Who carries this load? Well, anyone who doesn’t get compenstion of course. That is a little hard to follow as there are so many compensations, but it settles down to being most businesses, and the rich. These groups are going to see the cost of CPRS compliance as a tax. Business will adjust prices and pass the cost out to the general economy. The rich will pay the direct higher prices (water, electricity, food) and take the second slug from general price increases. The general public only see the general price increases as well as the electricity price hit but get compensation, supposedly.

    The sad thing about this sad piece of legislation is that it is unimaginably inefficient and makes as much sense as the Honda ad which shows a falling domino like series of events to eventually tip a platform to make a car roll forward a few feet. An engineer would see a process as indirect as the CPRS is as requiring a massive amount of energy applied to achieve a very small impact at the target, with most of the original impact being lost to compounded inefficiencies at the various stages of the process. Here you bring out the line that “this is about changing people’s behaviour”. Certainly the doubling of electricity prices (75% increase near enough) will change something, but I argue not what you imagine. Certainly there will be an encouraging move to solar waterheating, but a new air conditioner will be added for a nett zero change to energy consumption. Then the wall plug in electric vehicle will arrive. Definitely something will have to give way to allow for the higher prices not compensated for, but it will not be in energy consumption.

    As for the notion that people will move to use public transport in place of private vehicles, to that I say that our cities are no longer designed for such a change. People’s travel distances, travel routes, and travel time allowance’s will not allow for this.

    But most importantly, people should not need to change their energy consumption behavior in Australia. This country has boundless amounts of renewable clean energy, it simply needs to be collected and shared out. And a levy on the principle commodity is the only fair, direct, efficient, and natural method to
    provide the investment to achieve this goal with absolute cerrtainty. And it is certainty of change that science is telling us that we need.

    Fortunately Abbott has yet to focus on the massive inefficiency of the CPRS. This should say something about his analytical skills. But if he does work it out he will have no trouble demolishing the CPRS in the public’s mind. Think about how it will sound, $22 billion per year syphoned off through electricity alone by 2013, and not a single tonne of CO2 release prevented. That should not be hard to be made to look like the nonsense that it is, especially for someone as unconstrained by factual detail as Abbott is.

  45. Patrickb

    “for not fixing up Carter’s and Clinton’s stuff ups”
    And Regan, don’t forget Regan Thumbnail, and there was the other Bush … oh I get it, they’re not Democrats, you must be a troll then. Alas another 20 seconds wasted. Still at least I don’t have the contents of a sheep’s lower colon where my brain should be.

  46. Mike

    The CPRS isn’t a tax, because it *finally* prices a real input that business have been drawing on for centuries, for free, as an externality.

    Pricing carbon merely ends the free ride. Business has known about AGW for 20 years, and the probability of an ETS for 10 years.

    No one should be surprised, except by the government’s excessive and wasteful desire to direct resources to the old economy.

  47. Nickws

    Patrickb @ 45—Quiet, we need them (teh Right) to be influenced as much as possible by magical realism in their thinking (pace the commenter’s belief that the US government forced Wall Street to leverage huge amounts of debt against bundled derivitaves. Or that Jimmy and Bill just plain handed out buckets of money to the niggers, whatever.)

    The more lost in lala land they are the smaller the chance their political leaders have of ever getting back into power.
    I call it the Abbott ratio.

  48. Fran Barlow

    PeterTB said:

    Fran, the Government would be issuing permits into circulation at pretty much no cost of production, and pocketing substantial revenue having provided no useful benefit to the purchasers.

    This, coming from someone holding himself out as being some sort of economic pragmatist, is astonishingly illiterate.

    In the end, all costs imposed settle on end users. All levies on the population come out of the maximum capacity to levy. In this case, all the revenue and then some is being handed back. Now ultimately, I maintain that the transaction costs of the exercise as currently configured are excessive, and that the current reward structure does not approach anything that could be described as pareto optimal but for the record government here is not “pocketing” anything. It’s building an expensive ring fence that is full of holes just big enough to catch the wrong targets.

    Really, your claim is the flipside of those silly claims that corporations rather than individuals should pay taxes or charges, when in the end, corporations and individuals are all in the same broad system of exchange.

  49. BilB


    The CPRS as configured ultimately boils down to a tax on most businesses and the rich. The business share comes through in increased prices on every thing. This is hardly a clear signal to the public other than to consume less. Further some types of businesses such as teaching institutions will be sorely hit by the 75% increase in electricity pricing artificially forced on energy distributors.

    The CPRS was crappy legislation that deserved to be voted down. I give Rudd an E- for this effort, considering the time allowed for the assignment.

  50. Fran Barlow

    I agree BilB that the CPRS was a very poor piece of legislation and as you know, I was at least as keen for it to be voted down as you are. Calling it a tax is both wrong as a matter of specification and simply buying into Abbott’s propaganda line. Abbott is not going to wink at your idea because that would be a great big new tax, and he wants no cost at all on polluting.

    Further some types of businesses such as teaching institutions will be sorely hit by the 75% increase in electricity pricing artificially forced on energy distributors.

    This is simply silly. How much of that 75% has anything to do with the CPRS? Very little. No part of it is “artificial” either, including the CPRS component, should it see the light of day. What is “artificial” is the uncosted externality (a.k.a a subsidy or more precisely still a transfer payment) — being able to pollute for free if you use a fossil fuel source.

    When one examines where this tranfer payment goes, it is mostly to the heavy end users of fossil energy and from all those who derive the highest relative benefit from a clean environment and climate stability.

    Self-evidently, educational institutions and others can be compensated for higher costs either by relatively illiquid transfer payments.