The big gamble

The multi-party climate committee’s decision to place a starting price of $23 per tonne on carbon dioxide is nothing short of gutsy. While the Greens and independent MPs may be held marginally responsible at the next election, the Australian Labor Party (ALP) will be the one feeling the wrath of the Australian voter.

Treasury has projected that, due to the carbon tax, cost of living will increase by 0.7 per cent and electricity bills by 10 per cent, with 60 per cent of households being fully/over compensated for the initial cost increase and 30 per cent partially compensated. Interestingly, assistance payments start this week even though the impact of the carbon tax is not expected to be felt for a few months.

The Labor Party seems to be as worried about how the carbon tax will affect its popularity, as the Coalition was when introducing Work Choices. Labor is expected to spend $36 million over the next two years to promote the assistance package which is squarely aimed at reducing the carbon tax’s negative impact on their popularity. The first of the ads promoting the assistance packages, but failing to mention its carbon tax, have already started broadcasting on national television. We can expect the phrase ‘carbon tax’ to not be mentioned or acknowledged by the ALP going forward.

The carbon tax will be the key negative issue for the ALP going into the next Federal Election and you can expect the Coalition to campaign strongly on this Labor policy back flip and the financial impact of the tax.

Will the carbon tax ultimately decide the ALP’s fate at the next Federal Election?