ABC The Drum - Climate policy: Gillard puts it all on black. Updated Fri 28 Jan 2011, 3:34pm AEDT News of a freakish reversal of direction in Australian climate policy is not, in itself, particularly stunning any more; this policy area is prone to more rethinks than Lady Gaga's day wardrobe.
But what Julia Gillard did at yesterday's National Press Club address is nonetheless pretty staggering. Her cool public slaughter of about $1.3 billion in clean energy incentives could be described in several different ways. Rudd-era greenies might call it "rat-f***ing. " Ms Gillard herself would call it "Seeing what needs to be done, and doing it. " I'd call it: "Putting It All On Black". The Rudd government (and by logical extension, its deputy prime minister Julia Gillard) was firmly of the view that to bring Australia's carbon emissions down, you needed both a price on carbon (through the consonant-plagued emissions trading scheme it attempted to wheedle through the parliament) and a series of initiatives to encourage cleaner forms of energy.
"Right. Flood levy – the best packaging from Labor for a long while – The Stump. The Prime Minister has switched the Government’s campaign for a flood recovery levy from a fiscal to an economic focus, arguing it is critical to ensuring the recovery effort doesn’t drive inflation and skill shortages as rebuilding infrastructure competes with a booming economy.
Speaking at the National Press Club, Ms Gillard revealed the expected cost of rebuilding after the floods will be $5.6b, including just under $4b in Queensland. The cost will be met by a combination of spending cuts and a new levy on incomes above $50,000 pa, with the latter meeting around a third, and spending cuts the remainder. The spending cuts include a slate of carbon abatement programs that the Prime Minister said would no longer be necessary because of her commitment to a carbon price by 2012. Details, including a relaxation of temporary visa requirements for labour required by the flood, follow, taken from the Government’s press release: Two-thirds of that funding will be delivered through spending cuts. The levy dividing the nation. From levee banks to levy banks, recovery from the recent Queensland — and NSW and Victorian — floods will cost the Australian economy billions.
“…The best preliminary estimate of the direct cost to the Federal Budget of this summer’s flood disaster is just over $5.6 billion,” declared PM Julia Gillard yesterday, as she proposed a flood levy to help raise around one third of those costs. The facts of the levy — essentially a once-off tax — are this: It’s important that Gillard gain popular support on this in order to get the levy passed in a tight parliament. So far, things are looking worrying for her.
The majority of talkback callers yesterday afternoon and this morning questioned why they were being hit by the flood levy tax, particularly after they’d already donated. Caller Phil to Triple M Melbourne said Australians have become whingers who are happy to take money from the Federal Government, but do not want to give anything back. A little levy, that hopes to go a long way. Today Julia Gillard at the National Press club announced the Government's flood relief package.
As we all expected after a good week or so of backgrounding to the media, it included a levy. The levy is not ‘huge’. Yes, it will raise $1.8 billion – which I grant you is a big enough figure that you would get a little bit excited were you to find it between the cushions of your sofa – but in the whole budget perspective it’s not the biggest thing going around. In fact it is so small that you have to wonder why the Government is bothering (as Possum nicely points out).
The impact of the levy on householders is also not too severe – 96 cents a week if you earn $60,000; $2.88 a week if you earn $80,000; $8.65 if you earn $120,000. The package also included the government dumping a stack of environmental subsidies and other programs: These cuts are smart politics. The levy is small enough and cuts in at a level high enough also for it not to involve much political pain.
We are grieving.