Has the flood levy damaged the carbon price?

The unknown extent of altruism in the hearts and pockets of Australian voters must be playing heavily on the minds of major political players right now. They will carefully be examining taxpayers’ response to the flood levy to assess 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 that is now at the heart of the government’s climate change response. Australian governments have 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 are generally 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* because the “results” were depicted often and compellingly on our television screens. The twinge in our hip pocket nerve was ameliorated by the images of guns being turned into scrap and Diggers playing footy with smiling East Timorese children. In fact, we took pleasure from bearing a small cost which contributed to the mitigation of a much bigger problem. The challenge facing Julia Gillard is that there is no similar way to depict how climate action costs which affect individuals will deliver community benefits. There is no tangible way to […]

Read More →

Who’s the demon?

At the risk of being called naïve or an apologist, I feel compelled to challenge the demonisation of big business. While it is something that has been troubling me for a while, my concerns have become crystalised by the anti-mining mutterings of my esteemed colleagues on Twitter. In recent days, the more we non-economists hear about the misnamed Resource Super Profit Tax, the more sensible it seems.  But it has taken serious journalists such as Peter Martin and George Megalogenis to take the time to translate this arcane but practical arrangement into plain English. We should not have been subjected to the shrill objections and counter-claims of the mining industry and Government.  Any government worth its salt on the issues management front could have turned this resource and risk sharing arrangement into a good news story by bringing the mining industry into the tent and getting them on side before the RSPT announcement was made. Is this me being naïve?  Or did the Government want the mining industry to be seen to be taking a hit swiftly after it dodged an earlier bullet with the abandonment of the Carbon Pollution Reduction Scheme? Did the Government consciously demonise the mining industry in an attempt to regain a few brownie points from the electorate? Perhaps the answer can be found in the title for the new scheme.  The moniker given to the Resource Super Profit Tax smacks of the same hyperbole applied […]

Read More →