Monday, August 5, 2013

Kevin Rudd has now named the election date as September 7. While Rudd accuses Tony Abbott of policy by three word slogans, it seems that since he has reclaimed the Labor leadership he has been furiously adopting similar policies.

Here's 10 tough questions which go to the very credibility of Rudd and the Labor Party's response to climate change, and whether they really consider it to be the "greatest moral challenge of our time."

1) You've made much of how the move to trading that will drop the carbon price will help out with "cost of living" concerns. But a carbon price of $7 per tonne of CO2 – which markets aren't pricing-in to rise much beyond $10 – won't do much to reduce Australia's emissions, will it?

2) Indeed it's likely such a scheme not only won't reduce Australia's emissions, but also won't reduce Europe's emissions much either because the Europeans have a huge two billion overhang of excess permits. Europe's own Climate Commissioner has described their scheme as inadequate.

How does this carbon pricing policy possibly represent an adequate response to the greatest moral challenge of our time?

3) Your government has claimed carbon pricing has made a considerable difference to Australia's emissions in its first year, while having a negligible impact on the cost of living. If that's the case and given the problems with Europe's ETS, why not just keep with the existing carbon price level of $23, or make it a price floor similar to what Labor had originally agreed with the Greens?

4) Is this move to trading a year early just a cynical political ploy to fool voters that you dumped the 'tax', but really the impact on households and industry of a given carbon price level is the same no matter whether it is set via trading or via a tax?

5) Is it not possible the carbon price could rise considerably depending on decisions made by the EU – and indeed your own Treasury estimates for the budget rely upon it rising?

6) Given this, do you really think it is politically clever to concede to Abbott's rhetoric that this is a serious imposition on people's cost of living when they received substantial tax cuts in compensation?

7) It is generally acknowledged that decarbonising the economy requires changing long-lived investments in infrastructure that require more than a decade to deliver an adequate return. Since your government came to power in 2007 you've made multiple significant changes to the carbon pricing regime and the Renewable Energy Target. This includes dumping the entire commitment to a carbon price back in mid-2010.

Now we have a carbon pricing scheme that could go in a wide array of imaginable directions depending upon political deliberations between the 28 member countries of the European Union. How on earth are Australian businesses to plan and invest in such infrastructure when you seem to change your mind depending on what political polling or industry lobbying you were last exposed to?

8) Your government makes much of how you have supported the growth of the renewable energy sector. However with your decision to import almost limitless cheap surplus emission permits from Europe, one of Australia's biggest developers of renewable energy projects – AGL – is suggesting the price of electricity will become too low to support large renewable energy projects such as wind farms.  What are you willing to do to ensure the amount of large-scale renewable energy you've targeted (41,000GWh) is met?

9) Just last week you announced further write-downs in budget revenue that came on the back of other last minute cuts you made to climate change programs to address the shortfall in revenue from dumping the fixed carbon price. Why should we have any faith that you won't cut the funding to the Australian Renewable Energy Agency and the Clean Energy Finance Corporation to fill further holes in the budget that may arise?

10) Given the budgetary problems you find yourself in, you've sprung a series of ad hoc stop-gap tax changes on the public like adjusting FBT treatment for cars, raising the tax on cigarettes and charging banks an insurance fee.

Given the need to get the budget back into surplus and the fact that climate change is the greatest moral challenge of our times, why not make better use of the carbon pricing scheme to raise the necessary revenue? Or is a carbon price some kind of horrific cost of living impost (even though you've always said it's not) that other taxes aren't?

Tomorrow: 10 tough questions for Tony Abbott

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