Parties scuffle over tax plaudits

NOW the carbon price deal has been clinched, it's everyone for themselves among the multi-party committee members.

By InvestSMART · 5 Jul 2011

By InvestSMART ·
5 Jul 2011

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NOW the carbon price deal has been clinched, it's everyone for themselves among the multi-party committee members.

The government is putting snippets out ahead of Sunday's announcement, because it thinks that's its most effective sales pitch. It isn't staying in lockstep with the Greens now it is at the process's sharp end.

Cut adrift to some extent, the Greens hope to get any available credit, such as for the $2 billion Clean Energy Finance Corporation. After all, they have to justify caving in on a major issue like as the exclusion of petrol for motorists and small business.

But the government doesn't want the Greens to be painted as kings of renewable energy. Hey, we believe in that too, it says. It's not just the Greens that have pressed for such a measure, but the superannuation funds too, and Treasurer Wayne Swan flagged it in a speech a month ago.

But the Greens say renewables wouldn't have been so generously handled but for them. The government didn't fight the Greens over the amount of the fund it proposed the amount but it did, apparently, resist Greens pressure for more subsidies for encouraging families to use renewables in their homes.

While the alliance partners jostle, Tony Abbott has done a little (theoretical) repositioning. Remember his carbon tax plebiscite, killed by now departed senator Steve Fielding? Abbott said then he wouldn't be bound by the result.

Yesterday, introducing his already doomed plebiscite bill in the lower House, he said it was "absolutely inconceivable" that an opposition faced with a yes vote would continue to oppose the tax.

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Frequently Asked Questions about this Article…

What does it mean that the carbon price deal has been "clinched" and why should investors care?

The article says the carbon price deal has been clinched, meaning the multi‑party committee has reached agreement on the policy. For everyday investors that matters because the government will start releasing details ahead of a formal announcement, and those policy details can affect sectors like energy, renewables and transport as investors reassess impacts and opportunities.

How will the $2 billion Clean Energy Finance Corporation (CEFC) feature in the carbon price deal?

The article notes the Greens hope to claim credit for the $2 billion Clean Energy Finance Corporation included in the package. That fund is being promoted as part of the deal, so investors watching renewable energy and clean‑tech financing should take note of the CEFC’s size and any guidance on how it will be deployed.

Will motorists and small businesses be affected by the carbon price or is petrol excluded?

According to the article, a major concession was the exclusion of petrol for motorists and relief for small business. That means petrol was treated as excluded in the negotiations, which could change the relative impact of the policy across sectors.

Did the carbon price deal include extra household subsidies for renewables?

The article reports the government apparently resisted Greens’ pressure for more subsidies aimed at encouraging families to use renewables in their homes. So while renewables support is part of the package, additional household subsidy measures were limited in the negotiations.

What role did superannuation funds play in shaping the carbon price deal?

The article says superannuation funds had also pressed for measures included in the package, and Treasurer Wayne Swan had flagged aspects of the plan previously. That suggests institutional investors like super funds were influential in shaping parts of the agreement.

How does the political jockeying between the government and the Greens affect investment confidence?

The piece describes allies jockeying for credit — the government is releasing snippets to shape the sales pitch while the Greens want credit for renewable measures. For investors this means details could be emphasised or modified for political reasons, so it’s important to wait for the full formal announcement rather than reacting only to partial releases.

What is the relevance of Tony Abbott’s carbon tax plebiscite talk to investors?

The article notes Tony Abbott reintroduced a plebiscite bill (described as doomed) and said an opposition wouldn’t be bound by a yes vote. For investors this signals ongoing political debate around the tax, but the plebiscite rhetoric appears unlikely to change the clinched deal — still, political commentary can drive short‑term market sentiment.

What specific policy details should everyday investors watch in the government’s upcoming announcement?

Based on the article, investors should watch the formal announcement for the exact CEFC funding and how it will be used, confirmation of sector exemptions such as petrol for motorists and small business, any household subsidy measures for renewables, and the final legal and timing details of the carbon price — these items will determine which sectors and companies are likely to be most affected.