Carbon changes bring Labor into level pegging

As today’s Nielsen poll shows Labor and Coalition 50-50 on the two-party vote, Kevin Rudd is doing what has been expected – he’s narrowing the policy gap between himself and Tony Abbott over carbon pricing.

With Labor’s primary vote leaping to 39 per cent, up 10 points since last month, and Rudd leading Abbott 55 per cent to 41 per cent as preferred prime minister, the prime minister is seeking to remove or minimise irritant issues on which Abbott can campaign against him effectively. Among these, the most obvious are the carbon price and boat people.

While he’s in Papua New Guinea – where he arrived late yesterday – Rudd and Immigration Minister Tony Burke will have talks on the asylum seeker issue. The Australian centre on Manus Island has been criticised by the UNHCR.

By moving to a floating carbon price in mid-next year, 12 months ahead of schedule, the government would be bringing the scheme more quickly into alignment with the low European price.

This is common sense and appropriate, and something the Gillard government should have done. But it is costly, and as it put together the budget it did not want to lose the several billion dollars in revenue.

Rudd’s overwhelming priority, however, is to undermine Abbott’s attack on this issue, by ending the carbon “tax” as soon as possible (as distinct from the carbon “price”).

He also promises to make his change budget-neutral – whether by big genuine savings or some craftiness, we’ll see when full details are put out in the next couple of days. (The government’s tactic is to flag and then confirm the change, to get maximum political impact from the announcement, then deal with the detail.)

What was said to be unnecessary, too difficult or undesirable when Julia Gillard was prime minister and Greg Combet was climate minister has suddenly become doable and desirable. It’s now cast as needed to help the economy’s transition after the mining boom, and to relieve family budget pressures.

In fact, nothing much has changed objectively recently, except that a new leaders sees this as an important pre-election move.

Rudd sold it as everything gained, nothing lost. “The government is moving in this direction because a floating price takes cost of living pressures off Australian families and still protects the environment and acts on climate change,” he said.

The government yesterday gave a list of estimated savings in power costs based on Treasury modelling of a switch from a set price of $25.40 to $5.90 in 2014-15.

A non-working sole parent with two children aged three and eight receiving the parenting payment would have an estimated reduction in their cost of living of about $210 in 2014-15.

A single income couple with two children aged three and eight where the breadwinner earned $75,000 would save $380.

A dual income family with children of three and eight, on a total income of $100,000 (split 75-25per cent), would save $420.

For a maximum-rate single aged pensioner with no other income the benefit would be about $140; for a couple in similar circumstances, about $180.

The savings would be one-off because the price was scheduled to float from mid 2015.

Unless Rudd recalled parliament, it will be a promise rather than set in stone. He can’t bring back parliament if he has an early election – which his key advisers are urging – but anyway it would be risky. The Greens are spitting chips about Labor’s change – Christine Milne labelled the government “cowardly”. And while the Coalition could not logically oppose it, it might do so anyway, making the Senate a potential block.

Once again Abbott seemed to be caught flatfooted by the government’s move, even though it was expected. He complained about the government attempting to manipulate the media and then described it as “another Kevin con job … You will still pay and it will still hurt, it’s as simple as that.”

Well not quite. People will pay less and a lot of them will be overcompensated, because there are no changes in the household package.

The policy shift gives Labor more opportunity to take aim at Abbott’s Direct Action plan.

Treasurer Chris Bowen said: “we’re not going to be lectured by Mr Abbott about cost of living pressures, when he’s proposing a great big new tax to subsidise people who are already polluting, in a scheme which every expert says will actually not reduce emissions, but will increase the pressure of cost of living in Australia.”

The Nielsen 50-50 result follows the 50-50 outcome in last week’s Newspoll. Nielsen’s 39 per cent Labor vote is higher than the ALP vote in the 2010 election.

Labor has seen a 7 point rise in its two party vote since last month, and the Coalition a fall of 7 points. The Coalition’s primary vote is down 3 points to 44 per cent and the Greens are down 2 points to 9 per cent, suggesting Rudd is taking votes from the right and the left of the spectrum.

Rudd’s approval is 51 per cent; his disapproval is 43 per cent. Abbott’s approval is down 3 points to 41 per cent; his disapproval is up 3 points to 56 per cent.

Appearing on Nine’s Financial Review Sunday Malcolm Turnbull, who consistently rates ahead of Abbott as preferred leader, ruled out a Liberal leadership change.

“There are a lot of people out there who would rather I was leading the Liberal Party; it is ridiculous to deny that that’s not happening,” he said.

“If they think I am a person of capability and quality and so forth, they should be comforted by the fact that I am part of that team in a senior leadership position.”

Michelle Grattan does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.

This article was originally published at The Conversation. Read the original article here.