Palmer's 'hero' headache for Coalition

Two key events last week now leave the government in a very tricky political situation surrounding its position on the Renewable Energy Target:

1)  Its hand-picked economic modeller found that the Renewable Energy Target was likely to lower business and household electricity bills, and the further it is cut back the higher the impact on power bills will be.

2)  Clive Palmer announced the PUP will block any amendments that would lower the target, at least until the government took any amendments to an election for formal endorsement.

All the signals coming from the government suggested they were building up towards making a move to substantially cut the level of the Renewable Energy Target.

Yet these two events last week mean they are on a hiding to nothing politically from such a move. Any legislation they put forward to cut the scheme means they can be painted by their political opponents as environmental villains out to help big energy companies, and not electricity consumers. And at the same time such a move is fruitless because it will be blocked in the Senate. It seems hard to see how they can win from such a move.

Yet there is clearly a substantial group of Coalition MPs who have a strong desire to see the scheme either abolished or rolled back substantially. Today 25 Coalition MPs, or more than a quarter of the party room, have signed a petition calling for aluminium production to be completely exempted from having to pay the costs associated with the RET. A range of other MPs have made assorted public noises suggesting the scheme should be wound back. Most recently one of the Coalition’s rising stars, Kelly O’Dwyer, wrote that the RET was a form of industry entitlement that was driving up electricity prices in her regular column in The Australian Financial Review. She told the ABC that “a very sizable number” in the Coalition share her concerns.

The government was extremely careful in its election campaign to give the general impression to the electorate that it had no plan to roll back the deployment of renewable energy, while at the same time being sufficiently vague that it left them a degree of flexibility to do exactly that.

I, along with other journalists and interested stakeholders, pressed the Coalition ministers repeatedly in the lead up to the election on whether or not they would leave the RET as currently legislated. Rather than directly answering the question, they would say, “we support the 20 per cent Renewable Energy Target”, knowing full well this could be interpreted two ways.

It could mean they supported the policy as it stood at the time, which had become known in shorthand as the 20 per cent Renewable Energy Target (but was in fact more complicated than that), or it could mean a drastic cut back, such as a floating, or 'real', 20 per cent target. For the average man in the street, of course, they’d have no idea that it might mean something different to Labor Government policy, which was also referred to as a 20 per cent Renewable Energy Target.

Looking back it seems they had a plan similar to what transpired with the Gonski education initiatives. When there was an uproar over the government rolling back the Gonski funding commitments, Abbott asserted" ''We are going to keep the promise that we made, not the promise that some people thought we made or the promise that some people might have liked us to make. We are going to keep the promise that we actually made.”

In the end the Coalition could act to effectively slash the need for extra new large-scale renewable plants to a tiny fraction of what the current 41,000 gigawatt-hour legislation dictates, and still claim they were faithful to a policy of 20 per cent renewable energy. Given the average voter doesn’t know a gigawatt-hour from a kilowatt-hour, the Coalition probably figured they could sneak such a change through with minimal electoral fallout.

However, Clive Palmer appears to recognise he can make political hay from such a level of trickiness on the RET, painting himself as some kind of hero with the average punter, ridiculous as it seems.

Given the results of the government’s own economic modelling, he can make the populist claim he’s protecting households from big evil electricity companies that want to be free to gouge consumers without competition from people’s own solar panels. And he can claim he genuinely cares about the environment, too (while still trying to get a huge coal mine up). Plus he can hit the government over the head about dishonesty on their lack of forthrightness prior to the election about what they had planned for the RET.

The government’s commissioned RET Review, headed by a climate sceptic and supported by a minerals industry consultant and strong critic of the RET, may now become a rather large headache for the government.