The public's gratitude for cash it believes it already owns is fleeting.
THE money is flowing into bank accounts, billions of dollars of it. According to the federal government, $1.18 billion has already been distributed to 5.8 million Australians as part of the carbon tax compensation scheme.
The government also says payments to cover a proportion of the price rises caused by the carbon tax will go to nine out of 10 households. Close to 6 million households will be either fully compensated or will come out slightly ahead, according to the government's projections.
That's not all. Today, the first lump sum payments that replace the old education tax refund are expected to land in parents' bank accounts. By the end of the month, the government expects to have sent out $1.4 billion for what it calls, using the colloquial parlance so beloved of the marketing people who have its ear, the "schoolkids bonus".
These outlays are, again to borrow from the marketers' lexicon, a big spend. And yet, is any of it changing public attitudes to the government or the Prime Minister? There does not seem to be much evidence of it.
Resentment over carbon pricing among most voters appears to rage on, prompted by looming big electricity price rises. And the real firestorm of protest has not yet begun, although it is not far off. For that, we need wait only until July 1, when the regime takes effect.
As the nation descends into the depths of winter, Julia Gillard's moment of truth is at hand. Her entire political strategy rests on being able to use the reality of the carbon tax to generate a sort of electoral big bang. That is, when the carbon price becomes, at last, a tangible presence rather than a threatening idea, a new political world will be formed.
In that world, the government will at last be able to turn back the hysteria of the anti-carbon-tax crusade led by Tony Abbott, in which every job loss, price rise, badly cooked meal, change in the weather, broken shoelace - you name it - is due to the evil carbon tax. That was the idea, anyway.
Part of the argument in caucus for keeping Gillard and rebuffing Kevin Rudd early this year was based on giving Gillard the chance to turn around the government's fortunes once carbon tax fact was able to be separated from carbon tax fiction.
It's too early to say that it has not worked, of course, but given that the compensation payments have been going out for a month now, the early signs are not good.
There are problems with the notion that the public's attitude towards the government can be recalibrated with money, especially in relation to the issue of climate change.
Yes, sending voters money worked for John Howard at the 2001 and 2004 elections. But the practice got old with some rapidity. By 2007, it was a flop and Howard lost office.
The circumstances were different throughout the first decade of the century, anyway. House prices were going up. Home owners felt richer just by getting up in the morning.
The global financial crisis and its aftermath have changed that. The air is slowly leaking from the housing bubble and prices are declining.
Consumer behaviour has changed, with saving assuming primacy over borrowing. Australians are worried.
This is the fundamental political problem with the carbon tax. Climate change emerged as a live issue before the global financial crisis, when voters felt they had room in their lives and their minds and their pockets to afford to be concerned about it.
Even suggesting this is enough to send some climate change activists apoplectic, but the change in attitudes is plain to see. When people feel economically insecure, anything beyond dollars and cents will matter less.
The government's already low stocks do not help. When an unpopular government, with an unpopular leader, hands out money, there is a cynical reaction. This was true in 2007 under Howard and it is the case now.
The compensation is deemed to be never enough or illusory. Bear in mind, this is a society where people are not laughed out of town when they claim an annual income of $150,000 does not make them wealthy.
The public's gratitude for money it believes it already owned is fleeting at best. The government's decision last week to set up the Twitter hashtag #cashforyou to promote its payouts generated exactly this response.
Typical of the government's difficulties was Climate Change Minister Greg Combet's recent noting that only 8.9 per cent of the average 18.1 per cent electricity price rise in NSW was due to the carbon tax, much less than Tony Abbott has forecast. Which politician is more likely to be punished in that scenario?
In any case, the government has been so beaten down over the carbon tax that it cannot even bear to own up to the policy.
The $1.18 billion mentioned at the top of this article has been paid out under a scheme called "the clean energy advance" and the carbon tax is now a carbon price.
If the government cannot bring itself to explain directly to people why they are getting the money, what hope is there?
Shaun Carney is an associate editor.
Frequently Asked Questions about this Article…
What carbon tax compensation payments has the federal government already paid?
The article says the government has paid $1.18 billion to 5.8 million Australians under a scheme called the "clean energy advance" as part of its carbon tax compensation.
What is the "schoolkids bonus" and who will receive those lump-sum payments?
The "schoolkids bonus" replaces the old education tax refund. The first lump-sum payments were expected to land in parents' bank accounts, and the government expected to send about $1.4 billion by the end of the month for this program.
How many households does the government say will be compensated for price rises caused by the carbon tax?
The government projects payments to cover part of price rises will go to nine out of 10 households, with close to 6 million households expected to be either fully compensated or come out slightly ahead.
When does the carbon price take effect and why might it trigger public protest?
The article notes the carbon pricing regime takes effect on July 1. It suggests resentment over rising electricity prices is building and that public protest could intensify once the carbon price becomes a tangible cost rather than a theoretical policy.
How much of the recent NSW electricity price rise is attributed to the carbon tax?
According to Climate Change Minister Greg Combet quoted in the article, only 8.9% of the average 18.1% electricity price rise in NSW was due to the carbon tax — a figure much lower than some opponents' forecasts.
Have the compensation payments improved public support for the government?
The article says early signs are not good: despite billions flowing into bank accounts, there isn't much evidence that the payouts have meaningfully changed public attitudes, and public gratitude for money perceived as already owed is described as fleeting.
What broader economic trends mentioned in the article should everyday investors watch?
The article highlights post‑GFC shifts: falling house prices, consumers favouring saving over borrowing, and growing economic insecurity. These changes affect consumer behaviour and sentiment—factors everyday investors commonly watch when assessing markets.
Is renaming the policy and promoting payments (for example with #cashforyou) helping the government's messaging?
The article suggests the government has rebranded parts of the policy (referring to the carbon tax as a "carbon price" and payments under names like the "clean energy advance") and even used a #cashforyou hashtag. But it argues those tactics have had limited success because the government struggles to explain directly why people are getting the money, and the public reaction remains cynical.
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