The Carbon Tax Gets the Green Light from Parliament

Prime Minister Julia Gillard wages her political future on the controversial carbon tax

In what should have been a moment of victory for embattled Prime Minister Julia Gillard, her carbon tax legislation passed in the House on October 12 by the narrowest of margins, 74 to 72.

And yet, despite the all round smooching, the mood was far from jubilant. Eighty anti-carbon tax protesters flooded the public gallery, interrupting proceedings with shouts of “liar” and “democracy is dead.”

With typically understated restraint, opposition leader Tony Abbot pledged to fight the carbon tax with his political life: “We can repeal this tax, we will repeal this tax, we must repeal this tax. This is a pledge in blood. This tax will go.”

This potent mix was boosted by the uncertainty over Ms. Gillard’s continued leadership of Labor and the not-so-hushed rumors that ousted PM Kevin Rudd was planning to make a bid for party leadership.

It was hardly the triumph Gillard needed and many commentators were quick to label the passage of the bill a pyrrhic victory. Indeed, the carbon tax has cost Ms. Gillard and her government crucial support after what was already the narrowest of victories in 2010.

Even after passage of the bill, public opposition to it has risen. Now Australians are opposed by a margin of almost 2:1. Over the last three months, opposition to the tax has jumped six percentage points to 59%.

That last statistic has to carry a particular sting for Ms. Gillard, especially since it was only three months ago that she feistily declared she would be “wearing out my shoe leather” selling the carbon tax package directly to the Australian people. It looks now to be a pair of shoes wasted.

Clearly, even after barnstorming the country with her household compensation package Julia Gillard has been unable to convince voters of the merits of her clean energy initiatives. Though in all probability it will soon be law, popular support for the carbon tax measure is stuck at 30%, which is to say exactly the same level it was at when she introduced the proposal back in February.

Why are so many Australians so opposed to the carbon tax?

The default explanation is of course the economic one. No one particularly liked new taxes and even though Australia has largely managed to avoid the recession plaguing much of the world thanks in large part because of the very coal mining industry that the carbon tax purports to levy, it is still easy to get spooked in such an economic environment.

Some companies have made an issue of the tax, even going so far as to claim it could deter investment. Most recently global mining company Anglo American has said that the carbon tax could imperil the $US10-15 billion the company was planning on investing in its Queensland coal operations, and the 3,200 jobs that would have resulted from this investment.

Tony Abbott has made no secret of his conviction that the carbon tax will devastate industry, but there are many who see its economic impact as far from catastrophic.Tim Jordan, a senior analyst at Deutsche Bank in Sydney, was quoted in the New York Times as saying, “The impact on most businesses is modest. Businesses that are ready for a world where carbon is priced, such as electricity utilities with renewable generators in their portfolio, will do well. Many high-emitting industries will receive free carbon allowances, giving them time to adjust to a carbon price.”

At any rate, the economic impact of the carbon tax is up for debate. But it seems unlikely that a carbon tax debate alone – a mere matter of economics after all – could inspire such rancor and animosity.

There is arguably a personal element to this debate. Much of the opposition to the carbon tax is mixed up with strident opposition to Ms. Gillard personally. Opponents of the carbon tax have attacked both it and Julia Gillard with uncommon nastiness. While the personal attacks by the opposition in Parliament were perhaps to be expected, the comments on sites like YouTube have often been remarkably offensive and derogatory.

The explanation for such a toxic environment isn’t simple. There is, of course, her “breach of faith,” when she faced the Australian nation and promised “there will be no carbon tax under a government I lead.”

There are doubtless many other causes, not least among them the rise in the price of electricity and the upward cost-of-living pressures that have set people on edge. Also Mr. Abbott’s exaggerated and reactionary rhetoric has been allowed to frame the debate, further poisoning the well of political discourse.

But it remains that Ms. Gillard as a political figure plays a central role in this debate. The carbon tax is the issue on which she has staked her political legacy and the public’s reaction has evolved into a referendum on her Government.

Surely her status as the first female PM in Australia’s history has something to do with it, and the fact that she has a fairly unconventional personal life – at least by political standards – living childless with partner and “first bloke” Tim Mathieson.

She has also made blunt declarations about not believing in God, has had a satirical TV comedy made about her life and, crikey, she didn’t curtsey for the Queen. Doubtless these details of her personal style, politically a highly unconventional one, have contributed to the animosity many feel toward her at least unconsciously.

But what is more likely at work here is the lingering frustration voters feel over the whole nature of her ascension. Her unpopularity may have something to do with the shadowy manner in which she deposed her predecessor Kevin Rudd, who only months before his ousting had been the most popular PM in Australia history. That political assassination cut Mr. Rudd out of office after less than a single term.

Thus from the beginning of her tenure as Prime Minister, she wasn’t effectively elected by the Australian people. Nor did she come to power through a death or some other natural accident, but through a backroom plot worthy of Machiavelli.

And though Ms.Gillard was careful to hold the party power brokers who made her ascension possible at arms length, it leaves an unsavory aftertaste. According to a poll taken after the shock announcement, “59% of respondents simply didn’t believe that she was reacting to the situation rather than initiating the challenge.”

She has had to grapple, then, with the fact that she was not raised to the prime minister’s office by the public. And then when she did call for an election, only three weeks after deposing Mr. Rudd, it was so that she could personally “seek a mandate from the Australian people to move Australia forward.”

The result has hardly proved the mandate she had hoped for. Labor only barely scraped to a second term and Gillard had to form a minority government, the first since 1940. Again, her victory was more the result of backroom deal making than a clear expression of the voters’ will.

A measure of just how unpopular the formation of this government was can been seen in the current level of support for Tony Windsor and Rob Oakeshott, the Independent MPs who gave Ms. Gillard their support. Both have recently suffered a “calamitous” drop in support.

If elections were to be held now, the two MPs would lose their seats, with 70% of their constituents deadset against Labor’s clean energy bills and a majority standing in opposition to their support for Gillard’s formation of a Labor government.

So if Julia Gillard’s person and proposals are controversial in their own right, her problems are compounded by a sense of never having properly been elected. It’s easy therefore to see how many Australians can feel deceived by Ms. Gillard, and not just over the carbon tax.

During the campaign Tony Abbott asked, “How can we trust Julia Gillard when Kevin Rudd couldn’t?” It was not enough of a slogan to win him the election at the time, but many Australians may be asking themselves that question now, especially in light of her violated carbon tax promise.

Every politician lies and every politician makes promises they can’t keep, or so the saying goes. It comes with the territory. To draw a parallel with American politics – made relevant by what many perceive as the increasing Americanization of Australian politics – voters do not particularly care about a lie they see as separate from them and the country’s business. But voters take electoral lies much more to heart.

For instance, after Bill Clinton lied about his Oval Office indiscretions with a comely White House intern, very few people outside of Congressional Republicans cared very much. Mr. Clinton’s job approval rating actually rose throughout the course of the Lewinsky scandal and subsequent impeachment.

Compare this to the 1992 Presidential election, when the very same Mr. Clinton nailed then-President George Herbert Walker Bush to the wall over his breached promise not to raise taxes. “Read my lips: no new taxes” the elder Bush had famously declared. Those voters who never forgave him voted for Ross Perot instead, in the process easing the way for a Clinton presidency.

All of this is to suggest that while people may not always care about a politician lying, the context in which the lie is made is supremely important. Mr. Clinton lied about his personal life and, unsavory as it was, voters were willing to forgive him. The first President Bush lied in order to gain power, and his lie had a negative effect on people’s wallets. Voters could feel it and responded in kind.

Ms. Gillard’s current situation may be roughly analogous to that of Mr. Bush. People are incensed by Gillard’s carbon tax lie because it was made not so much to gain as to retain power. And it will furthermore have a negative impact on the finances of a number of individual voters, above all the wealthier and often more conservative ones. Add this to a history of under the table dealings, and you have anger with Ms. Gillard the person and the politician, not just with the details of the carbon tax.

Looking at her current poll numbers, Ms. Gillard’s carbon tax victory may indeed prove a pyrrhic one. But she has successfully tempted fate by pushing through legislation on the very same issue that left her predecessor vulnerable to attack. Who knows, maybe the political gods savor the irony in all this and will put her in another backroom where she will have ample opportunity to negotiate her career to safety.

Photo via Takver on Flickr.