View from The Hill

View from The Hill

Day 29: Abbott makes it all about carbon

Tony Abbott has attempted to make this election about the carbon tax. AAP/Alan Porritt

In his last set piece occasion of the campaign, at Canberra’s National Press Club, Tony Abbott returned to the issue that, more than any other, started him on the road to the victory the Coalition expects to clinch on Saturday.

It was the carbon tax that landed Abbott, to the surprise of colleagues and even himself, in the leadership, after Joe Hockey, a supporter of Malcolm Turnbull’s emissions trading scheme, would not do the U-turn his party wanted.

Then Abbott seized the carbon issue to get traction against Kevin Rudd and later Julia Gillard. He was helped by circumstances: the Copenhagen conference’s failure; Rudd’s backtracking from what he had promoted as a great moral challenge; most notably, Gillard’s breach of her “no carbon tax” promise.

Despite criticism of his own “Direct Action”, including at times the little disguised scepticism of Turnbull, the carbon issue has been costly for Labor and politically good to Abbott, especially because he could marry it to “trust”.

“The carbon tax is where Labor’s economic deficit and Labor’s trust deficit coincide,” he said in today’s speech.

“More than anything, this election is a referendum on the carbon tax. A Coalition victory, should it happen, will be a warning from alienated Labor voters to their leaders: never again sell Labor’s soul to another party.”

He added, in what is a throw-forward to an Abbott government, “that’s why it’s unimaginable that a defeated Labor party would persist with a carbon tax. It would just confirm that Labor is incapable of learning from its mistakes.”

If Abbott becomes prime minister, this needs to be true or the early period of his government would become very messy.

The Greens may well lose their sole balance of power in the Senate at the election but the new Senate does not come into until mid-next year.

But Abbott declares scrapping the carbon tax a central and instant priority. “Building a strong economy will start from day one of a Coalition government’s first term as soon as the instructions are issued to start preparing the carbon tax repeal legislation. Elect the Coalition and, within a year, the carbon tax will be gone so power prices will be down in the order of 10% and gas prices will be down in the order of 9%.”

If Abbott in government could not obtain his repeal legislation, it would not just be a political blow. He has promised - and reaffirmed this today in interview with The Conversation – that he would go to a double dissolution on the issue. An early election is the last thing that a Coalition government, or the public, would want.

A defeated ALP might not want it either, so his calculation could well be correct. Or, if the election produces a Senate with right-leaning crossbenchers having the balance of power after June, a Coalition government could eventually negotiate the repeal through, even if Labor held firm against it.

That’s all for the future. Right now Abbott hammers the cost of the carbon price (“the cumulative loss in GDP between now and 2050 is $1 trillion”), and the claimed benefits of being without it. “An economy that’s 3% bigger or $40 billion a year wealthier could much more readily afford the Gonski school changes and the National Disability Insurance Scheme.”

As for Direct Action, he professes confidence a Coalition government could achieve its commitment to a 5% reduction in emissions target by 2020 with the about $3 billion over four years that it is allocating. But if it can’t, it appears it will be the target, not the money, that will have to give.

“We are very confident that we can achieve the domestic emissions reductions within the funding envelope that we’ve provided,” he said, arguing it was in the economic interests of business to try to reduce costly inputs “and often its most costly inputs, apart from labour, are fuel and power.

"So please, never underestimate the ordinary economic imperative to emit less … I also think it’s easy to underestimate the emissions reduction potential in the agricultural sector.

"But the bottom line is that we will spend as much as we have budgeted, no more and no less. We will get as much environmental improvement, as much emissions reduction as we can for the spending that we’ve budgeted. We are very confident that we will achieve the 5% target that we’ve set ourselves. We’re very confident that we can achieve that, but in the end we’ve told you the money we’ll spend and we won’t spend any more.”

So there you have it. Fighting the carbon price has so far been mostly upside for Abbott but if he becomes PM things get more complicated because the onus is on him.

First, he would have to get rid of the carbon tax, without losing too much political skin.

Second, its abolition would have to produce the benefits he has claimed or he would be held to account for creating false expectations.

And third, his direct action plan would need to deliver what he asserts it can – which may involve some heroic assumptions – or he’d be seen as letting Australia down at home and abroad.

At one level today’s National Press Club speech was all about a cautious candidate with an election lead determined to avoid final week mistakes. Viewed from a longer term perspective, Abbott has set himself some tough hurdles for the future.

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