Published by ABC’s The Drum.
In a speech to the National Press Club yesterday, Climate Minister Greg Combet announced that the government would devote half of the carbon tax revenue for compensating households.
By promising that the carbon price will be a financial boon for Australian households, Labor is attempting to counter Tony Abbott’s populist crusade against carbon pricing.
For weeks, Abbott and his Coalition allies backed by the polluting industries have mounted a fear-mongering campaign. The story the government wants to tell now is that while the Opposition leader is content to make exaggerated claims about economic ruin, Labor will make sure that you’re economically better off with a carbon price. Labor is determined to win the support of ‘hip-pocket voters’ to take the edge off Abbott’s mob.
The Gillard government is setting up another interesting dynamic. By announcing that householders will be ‘overcompensated’ for the impacts of carbon pricing, they have set a limit for calls for a low price and industry exemptions. The logic goes something like this: The higher the price on carbon, the more ‘overcompensation’ one will receive; conversely, the lower the price or narrower the coverage, the smaller the compensation.
Politics aside, the question now remains – what should they do with the remainder of the revenue? To cement its credibility on climate change the Gillard government must commit to investing the remaining share of the carbon price revenue to lay the foundations of a zero emissions economy. The government has a responsibility to protect low-income householders from carbon price impacts, but it also has a responsibility to invest in decarbonising Australia.