Australia Update: Opposition Attempts to Brand Emissions Trading a Tax

January 28, 2010 | Leigh Ewbank,

Australia's new Opposition Leader Tony Abbott has declared war on the Rudd Government. He has kicked-off his leadership by implementing a polarisation strategy, with the emissions-trading policy forming a central part of the political battlefield. The Opposition's new strategy provides some insight into the way in which the cap and trade politics might unfold in the United States.

The new Opposition Leader has identified the proposed emissions-trading scheme as a weak point for the Rudd Government. Labor exposed its vulnerability with efforts to keep the public debate centred on climate change 'skeptics' and 'deniers', the best example of which being Rudd's high-profile speech at the Lowy Institute late last year.

The Rudd Government has created the perception that emissions trading is the only available climate policy option. They have framed opponents of the so-called Carbon Pollution Reduction Scheme as 'climate skeptics' and opposition to the policy as preventing action on climate change. Former Opposition Leader Malcolm Turnbull bought into this logic--or played along with it--throughout the emissions trading debate and diminished the need for the Government to explain the details of the CPRS to the general public. The result is that while the Government's emissions trading policy is well known to the electorate, how it functions remains largely unknown--excluding of course the climate campaigners, policy wonks, and politicos closely following the passage of the legislation.

To capitalise on this opportunity, Tony Abbott and his Shadow Environment Minister Greg Hunt are working hard to brand the emission trading policy 'a great big tax'. They are counting on the Government being unable explain what an emissions trading scheme is and how it works in a simple and coherent way.

The Opposition Leader hopes to benefit from the electorate's ability to understand what a new tax means, and inability to comprehend Labor's emissions trading scheme. Abbott expects to harness anti-tax sentiment he believes exists in the electorate, but as a safeguard he's betting that on the off chance Labor can explain the ETS, they won't be able to do as well as the Coalition's catchy 'ETS = tax' sound bite.

Abbott is also tempting Rudd to defend the financial impact of the ETS by pointing to compensation for low to medium income households. The Coalition will brand this 'a transfer of wealth' to rev up its base.

Whether or not Abbott's strategy will work is yet to be seen, and it's possible that he is overestimating Australia's opposition to taxation. He of all people should remember that it was former Prime Minister John Howard who was re-elected in 1998 with a commitment to implement a goods and services tax--'a great big tax'.

The bottom line is that if Abbott can shift the debate to away from the Labor's preferred terrain of the 'climate skeptic/denier' debate, he'll cause some concern for Labor who may not be adequately prepared for the attack. If everything goes according to Abbott's plan, the Coalition might just be able to land a significant political blow in an election year.

In the US context, one can expect the Republicans to follow their conservative cousins in Australia in branding carbon pricing measures 'taxes.' They will also follow the Australian Opposition Leader in branding compensation for households as a 'transfer of wealth.' While the effectiveness of the 'transfer of wealth' argument is limited in Australian politics, the GOP will use it against their political rivals as yet another example of Democrats pursuing 'big government' policies. This messaging will be deployed to thwart the Democrats' cap-and-trade agenda and damage the party in the lead up to the mid-term elections.


Originally posted at The Real Ewbank