Palmer's 'power' may lead to strange bedfellows

There are good reasons to think either Labor or the Greens will act to take the wind out of Palmer's sails on the carbon tax by voting for the repeal themselves.

Following the swing to the Palmer United Party and the Greens at last weekend's WA by-election, much has been made of the increased power now in the hands of Clive Palmer.

But how much power does Palmer really have?

The first thing to note is that his WA candidate Dio Wang's win does take some power away from the unpredictable, but principled decision-making of the DLP's John Madigan and SA independent Nick Xenophon.

That duo really would have wielded some power if the PUP senator (or a third Liberal) had not been elected. It was Madigan and Xenophon, remember, that helped Labor and the Greens knock back the repeal of the legislation that created the Clean Energy Finance Corporation.

As explained previously, Xenophon might have been able to turn the government away from its commitment to the too-expensive Direct Action carbon abatement policy, to a more cost-effective trading scheme such as the one Xenophon and Malcolm Turnbull asked Frontier Economics to design in 2009.

That power is now denied Xenophon, though it may not be dead as an option altogether. It is not a carbon 'tax', after all (neither was the Gillard plan -- something Labor monumentally failed to explain).

The balance of power for abolishing the Gillard government's ETS, the mining tax, changes to industrial relations law, the legislating of paid parental leave and so on now rests in the hands of Palmer, and ideologically like-minded minor party figures David Leyonhjelm (Liberal Democrats), Ricky Muir (Motoring Party, with who Palmer has signed a memorandum of understanding) and Bob Day (Family First).

So it will be Palmer that secures the repeal of the carbon 'tax' and mining taxes, right?

Well, yes and no. After lengthy consultations with Liberal party figures, Greens and Labor operatives, I have to say there appear to be natural limits to Palmer's power in the senate already.

Let's start with the carbon tax -- since 2009 supposedly the most important issue facing our economy (though in reality, a great distraction from much more pressing, and difficult issues).

Palmer now has the voting bloc in the senate to extract large concessions from the Abbott government in return for supporting the repeal ... or does he? That is an idea his political foes fed the media in the lead-up to the April 5 election, but senate alliances sometimes produce strange bedfellows. Senate leader Eric Abetz and deputy leader George Brandis will, in reality, be seeking out and negotiating support for the repeal from not only PUP, but also the Greens and Labor.

While that sounds preposterous at first, upon closer examination there are good reasons to think either Labor or the Greens will act to take the wind out of Palmer's sails on the carbon tax, and possibly the mining tax, by voting for the repeal themselves.

The preconditions for such a move are, firstly, that Palmer is attaching outlandish conditions for his support of the repeal and, secondly, that either the Greens or Labor are able to articulate to voters that 'straight repeal' is less damaging to Australia than 'repeal with Palmer's conditions attached'.  

Think back to 2009. At that time, the Greens voted twice against the Rudd/Turnbull sponsored CPRS package, on the grounds that it would not bring about enough carbon abatement. That is, they voted with Liberals, Nationals, Family First and independent senators.

That move alone postposed the creation of a carbon pricing scheme until 2011, and made it such a hard-won reform that it will now inevitably be unwound. Not very green, really. Nevertheless, the party articulated its reasons clearly and was not heavily punished by Greens voters.

Then, again, in 2012 the Greens found reasons to object to Labor's proposed Malaysia Solution to sea-borne boat arrivals. 

Malaysia was not a signatory to the UN refugee convention, they said, though that was an irrational objection even then given that much more dangerous places such as the Congo, Afghanistan and Somalia were signatories. (See: The boats bill must be allowed to pass, June 28, 2012)

The result? The Greens blocked an offshore processing regime that would have been far superior to the barbaric, secret and shameful chapter of Australian history being played out on Manus Island and Nauru. Again, Greens voters did not see it this way and the party was not substantially punished in the polls.

Greens psephologiest Stephen Luntz tells me: "The CPRS was a white-knuckle ride for us. We expected a hit in the polls, but there was less backlash than we thought."

Sources on the Liberal side think even Labor could pull off this back-flip without major electoral damage -- indeed, after the ALP's desultory result in WA, one could argue there's not much left to damage.

Opposition leader Bill Shorten would have to front cameras, in the way Bob Brown did during the CPRS debate, to say something like: "We don't agree with this repeal, but we're not handing Australia to robber-baron Clive Palmer!"

Palmer's power will be less than his opponents made it out to be during the campaign. Moreover, those that know him well say 'attention' rather than 'power' is probably a higher priority.

One senior Liberal party source told me Palmer has a built-in equivalent of the 'worm' that tracks a candidate's impact during a TV election debate: "Palmer's 'worm' senses attention from the media -- if it turns down he will say just about anything to get it to turn up again."

Anything? Well just about. His "97 per cent of carbon is from nature" claim last week was about as close to gibberish as one can get on the topic of anthropogenic climate change. Likewise, his claim  that he could get WA more of its GST revenue back.

But they got him a lot of attention. 

And in the WA poll, not to mention in the November Victorian state election, that attention could be enough to keep the Palmer bandwagon rolling -- regardless of how little power he actually has in Canberra.