'Toxic tax' v 'limit on pollution'

Reports Labor would roll-over on repeal appear incorrect. It is more a battle over branding with Labor trying to switch discussion away from "tax" and towards a "legal limit on pollution".

Words can be powerful things.

Juliet may have believed a rose by any other name would smell as sweet, but she was wrong.

A rose, or just about anything else labelled as a tax smells bad. Really, really bad.

That, at least, is what Labor appears to have decided.

Two days ago in an interview with ABC 24, under questioning about whether or not Labor would support repeal of the Clean Energy Act, shadow environment minister Mark Butler made an interesting comment:

“We are as one [with the Abbott government] on the termination of the carbon tax. Indeed, we agree on the date of the termination, the first of July next year.”

Two days ago, Fairfax newspapers carried a story suggesting Labor was shifting its position towards supporting the Coalition’s bills to repeal of the Clean Energy Act. 

Further public comments by Mark Butler since that article suggest not. This is more about Labor trying to throw off the branding of an emissions trading scheme as a ‘tax’.

Tony Abbott has done a spectacularly good job in branding what is really an emissions trading scheme as a tax. He begun this exercise in negative rebranding from the day he took over as leader of the Liberal party, when everyone else was calling it a carbon trading scheme.

The decision to go with a fixed carbon price for the first three years of the scheme then made the rebranding effort complete – now everyone called it a carbon tax.

Labor was left in a pickle because it couldn’t really continue to refer to the policy as a carbon trading scheme because, for the first three years, it wasn’t. So the then-government was lumped with the rather unappealing term ‘carbon price’, in opposition to Abbott’s carbon tax.  

Of course, in practice this is all a complete joke.

Rather than bringing in a great big tax, the Clean Energy Act has in fact delivered a great big tax cut to the vast majority of the electorate.

When the carbon price drops to under $10 with the shift to trading, household tax cuts and pension increases for the majority of people will be comfortably more than double the extra costs they’ll bear from pass-through of the carbon price in the goods they buy. 

Indeed, it’s worth noting that improvements in household energy efficiency over the past three years mean the government overestimated the likely cost of living impact the carbon price would make, even ignoring the drop associated with the move to trading. For example, in the Energex-supplied grid area we know electricity consumption per household has dropped by about 1000 kilowatt-hours on average. Those households have saved themselves about $250 per annum on their bill. The carbon price, at $24 per tonne, adds about $150. 

But the vast majority of the electorate just isn't sufficiently engaged in the topic to appreciate the reality. This majority probably doesn't even realise that the small increase in its first paychecks for the 2012-13 financial year was due to an income tax cut, financed by extra government revenue from making businesses pay a price to pollute. And the upfront cash cheque they received in May 2011 was advertised without any reference to carbon pricing. Indeed, the cheque was probably forgotten about a week after they spent it at the local Harvey Norman.

What households could remember was that Gillard imposed a new tax, and taxes are bad, mmkay...

So now Labor is trying to reframe the language around this area. We want to abolish the carbon tax too, they tell the media.

But what Labor isn’t prepared to drop is a “legal limit on pollution”. And who could object to a legal limit on pollution? Pollution is unambiguously bad too, mkay.

In a series of media interviews involving Butler, this alternative branding strategy became clearer. 

In an interview with ABC News Breakfast:

MICHAEL ROWLAND: … it would be safe to assume the Labor Party would vote against the bill cancelling the emissions trading scheme?

BUTLER: Well, the difficulty is that Tony Abbott has pulled together a whole range of things, so there is not a single bill that simply deals with the carbon tax per se. The bill has in it, for example, a provision to abolish the legal limit on carbon pollution, the cap on carbon pollution that would reduce over time … we won’t support a position that removes the legal limit on carbon pollution.

In an interview with Radio National he downplayed the validity of the report in The Age and The SMH:

“Well can I say, first of all, just caution against placing too much emphasis on a piece in the Fairfax newspaper involving an unnamed source.”

And in an interview with radio station 2SER he provided perhaps the clearest reassurance that Labor won’t be repealing the emissions trading scheme:

“ ... the position of the Labor Party hasn’t changed from the position Bill Shorten, Tanya Plibersek, I, and many others have been articulating … and that is that we took to the election a position that we also intended to terminate the carbon tax, but that our position was that it must be replaced by a robust system to take action on climate change, particularly a legal limit on carbon pollution and also a mechanism, an emissions trading scheme that would have that cap on carbon pollution in place.”

How can Abbott and Greg Hunt object to the idea of making legally enforceable their own emission reduction targets, which they promised the electorate they’d achieve.

It should be fun watching this battle over words unfold.