Among the hubbub of yesterday’s carbon price announcement, the government’s flood levy proposal was passed in the House of Representatives by only one vote. The levy must also be approved by the senate to be implemented, and the crucial vote to achieve this lies with the independent senator Nick Xenophon.
Xenophon is a canny politician with a knack of tapping into the concerns of everyday Australians. His stated price to support the flood levy is for the government to penalise states that don’t take out disaster insurance. The fact that Xenophon has played this card in a game of political brinksmanship with the Gillard government suggests he believes the use of public funds, even for the public good, is of real concern to the community.
Now that a carbon price has been announced, there will be an increased focus on what the community thinks about who should pay, and how much, to deliver a public good through greenhouse action.
A good place to start is taxpayers’ response to the flood levy, which may be an indicator of whether individuals truly are willing to pay more for the collective good. This willingness has implications much broader than flood reconstruction — it goes directly to public acceptance of the carbon price.
Australian governments have actually been watching taxpayers for quite some time to gauge their willingness to take a little monetary pain for a broader public gain.
Evidence so far suggests that Australians generally are prepared to be altruistic when they can see tangible benefits delivered within a relatively short space of time.
Australians were happy enough to pay a levy to buy back guns or assist East Timor (even though the latter did not eventuate) because the “results” were depicted often and compellingly on our television screens. The twinge in our hip-pocket nerve was ameliorated by images of guns being turned into scrap and Diggers playing footy with smiling East Timorese children. In fact, we take pleasure from bearing a small cost that contributes to the mitigation of a much bigger problem.
The challenge facing Julia Gillard is that there’s no similar way to depict how climate action costs that affect individuals will deliver community benefits. There’s no tangible way to show how paying more for carbon-based goods and services today will reduce the effects of climate change in the future.
The Prime Minister needs to find a compelling analogue to help Australians feel directly connected with climate change solutions in order to be prepared to pay for them.
The PM should look to the state governments, which have over the past decade been exploring this concept with their water-restriction regimes.
Despite households consuming only one sixth of the water used by agriculture, the introduction of domestic water restrictions created the impression that individual members of the public were directly responsible for the success of their state’s response to the nation’s seven-year drought.
By drawing a link between climate change, the drought and dwindling water resources, state governments gave their constituents a way to see the tangible benefits of their water parsimony; whether they changed their water consumption behaviour, paid to install water tanks, or let their turf die.
The altruistic “payback” for these actions was the daily progress reports on roadside electronic billboards showing the results of the previous day’s efforts in terms of water used, targets reached and dam levels achieved.
Australians were happy enough to comply with water restrictions because they felt they were doing their bit for the collective good, and in reality the required change in behavior was not overly costly or inconvenient.
Compare the relatively benign stance on sharing this burden with that taken by the very same Australians on the flood levy. The levy is much less of an impost than water restrictions, the community benefit that it will deliver is undoubtedly tangible and compelling, but still barely half the Australian community supports it.
How can this be? Is it because we resent being forced to pay more when so much has already been given voluntarily? Or is it because the levy is seen as another tax grab that will be subsumed into consolidated revenue and never seen again? Several opinion polls suggest it’s a combination of these two complaints.
Let’s shift focus then to the carbon price. Australia’s economy is built upon an electricity supply system that is around 80% coal-fuelled. As a consequence, households and businesses currently enjoy some of the cheapest electricity prices in the world. A carbon price will increase the price of electricity as well as those goods and services that require electricity to be produced.
Will Australians resent being forced to pay more when they’ve already invested time and money in taking voluntary greenhouse actions? Or will they see the carbon price as another tax grab that will be subsumed into consolidated revenue and never seen again? Perhaps, yet again, it will be a combination of the two.
This is the conundrum facing the Prime Minister and her government right now.
If they don’t get the sales pitch right for the carbon price, if they don’t counteract the “I’ve already given at the office” mentality and dispel concerns about fiscal prudence, then the carbon price could sound the death knell for Gillard just as the scrapping of the carbon tax did for her predecessor.
*In the ’80s and ’90s DragOnista was a fiercely partisan political operator, today she’s an apolitical sceptic still hopelessly attracted to the world of politics. Core values are conservative but liberal, she doesn’t support any political party and she doesn’t vote. Pet peeves are journalists with no sense of history, self-fulfilling opinion polls and the abuse of apostrophes. Drag0nista is her writing persona — nothing more or less. She blogs here.
“Let’s shift focus then to the carbon price. Australia’s economy is built upon an electricity supply system that is around 80% coal-fuelled. As a consequence, households and businesses currently enjoy some of the cheapest electricity prices in the world. A carbon price will increase the price of electricity as well as those goods and services that require electricity to be produced”.
Pleae explain just how we enjoy the cheapest electricity prices in the world. It can only be done by not paying NOW for the pollution we are (and have been) creating – rather leaving it to our children and grandchildren to pay! (let alone the rest of the inhabitants on this planet). IF we have been paying too little NOW is the time to make up and pay a helluva lot more.
I regard people like you as completely lacking in any community moral sense. Selfish. Selfish. Seslfish.
I believe there are millions out there who are starting to give sigh of relief that the time is coming when we can ALL start to pay to reverse this species-threatening calamity before it is too late.
@D.JOHN HUNWICK – I’m with you! Selfish! Selfish! The people who are whining about the tiny levy are probably some that I see at the supermarket with bottles of soft drink, pre-packaged foods and bottled water? And they’re ‘doing it tough’? The people really doing it tough are in Qld and the other states affected by the recent awful events. Some people lose their sense of humanity and compassion. They don’t bother doing the ‘what if this happened to me’? I have and I’d be left with nothing!
I’m a pensioner with 6 grandchildren whose ages range from 8 to 24 – I’m most concerned about the condition of the planet and the world I will leave them when I go. I have no problem with paying more for electricity (I am now – I pay some each fortnight?) particularly if I know that it will be for the benefit of the planet. I just want all the rubbish, lies and selfishness to stop and for all of us to get on with it. Too hard apparently! People are so selfish. The levy for the people in Qld doesn’t worry me either. I’d happily pay less than a dollar a week. It’s ridiculous; I’d also support the Green’s call for the wealthy companies paying a levy also. There is a lot of evidence released recently that points to a correlation between the horrific weather events and climate change.
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DragOnista – I don’t have much time for people who elect not to vote. Hardly the action of a proud, responsible citizen. You’re a citizen first, then a person with an opinion? If you don’t vote you lose your right to an opinion in my view. How can you assert the right to put your views in the public arena, but choose to stay outside the rest of the country? Do you think it makes you neutral? I disagree! It’s a superfluous ‘cover’ for neutrality, without any evidence of conviction. It’s irresponsible! I’ve heard of another person in the media doing the same – she doesn’t fool me either!
This is my opinion only, but I don’t have much respect for people who don’t respect the privilege we have; particularly women, when history shows that we didn’t get this right ‘easily’? We had to fight for it!
A couple of points Drag0nista.
Firstly, it’s probably worth pointing out that, while Nick X maybe a “canny” politician. His current chief adviser has a background in the insurance industry.
(See Malcolm Farr’s piece in today’s Punch) http://tinyurl.com/6dwovtt
So I remain highly sceptical of X’s stand, that states must pour millions into the insurance industry’s coffers before he’ll OK the flood levy.
Secondly, whether or not Julia can get a carbon price up and running, is a FAR more important issue than the day to day “horse race politics” that consume the media.
Her own political fate, like the the fate of two PM’s that preceded her, really won’t matter in the slightest. If we can’t begin to seriously tackle the issue of global warming.
BTW
While I’m profoundly pessimistic about the eventual outcome myself.
(I think James Lovelock’s “The Revenge Of Gaia” is a fairly likely scenario.)
I’d still like to think, that we could actually try and rise above the day to day banality of “market economics” when dealing with the future of the next few generations.
P.S. A political tragic that doesn’t vote????
Now that truly IS tragic. 🙂
What may pass on a blog somewhere can be pretty sus when you get to a real e-news-thingy.
Did we fact-check that? It’s utter crap you know. (Hint: We’re not on that chart, but retail prices here aren’t all that far south of that other country starting with Aust.)
The most frequent argument I have heard against the flood levy is based on the theme of “waste and mismanagement”. Yet the Labor party has a good story to tell if only they could find someone to tell it.
I have been unable to understand why the Labor government has not gone onto the attack with regard to their record of spending. I get the impression that the Liberal spin of “waste and mismanagement”, “great big new tax” and so forth has become accepted and unchallenged.
There is the Keynesian response to the GFC which seems to have be so effective in achieving its aims, that most Australians seem to have forgotten that there ever was a GFC.
There is the BER or “school halls” business. I believe the independent review/audit gave it a 9 out of 10, or something like that. I vaguely remember Bernard Keane writing something about it.
The other one people constantly regurgitate is the so-called “pink batts” affair. I recall a couple of Pollytics columns by Possum Comitatus which demonstrated the utter absurdity of the common view. Most MSM journalists seem to believe unquestioningly that the home insulation scheme was a disaster, yet Possum demonstrated that that was far from the truth. I have never heard a Labor politician even attempt to defend the record.
I have never had high expectations of the Rudd and Gillard governments over climate change. They have, so far, fullfilled my worst and most cynical expectations. But in some other areas they have had some genuine achievements which thay have failed to sell.
If they want to bring in a new tax, levy, or whatever without immediately triggering a “waste and mismanagement’ response, then I think they need to aggressively defend their record.