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Grattan on Friday: Attacking the RET will open another tough battlefront for Abbott

If the Abbott government goes down the anti-RET path, it will be heavily driven by ideology. AAP/Lukas Coch

Tony Abbott has got a heap of unwanted publicity this week as a result of his response to cantankerous Liberal senator Ian Macdonald, who upbraided him for being late to Tuesday’s Coalition parties’ meeting.

As a putdown of Macdonald, an impatient Abbott said he’d had a Monday night fundraiser in Melbourne that was followed next morning by a visit to the Peter MacCallum Cancer Centre to bring the trip within official entitlements.

Grafting official and party work together is common enough but when the story was leaked it looked bad.

Beyond the cosmetics, however, the incident highlights something quite notable. A very busy prime minister, with a cabinet meeting in Canberra on Monday and parliament resuming after the winter break on Tuesday, was willing to fly to Melbourne for dinner to raise money for his party.

Such dinners in search of dollars are happening all the time. Who is at them, what is said, what if any representations are made, are not documented. This is the secret subculture of politics that we know little about.

Politicians are naturally sensitive about any suggestion that their fund-raising soirees lay them open to influence. And it would be quite wrong to think decision-makers necessarily do what donors would like – indeed, sometimes the opposite is true. But it would also be quite naïve to think business interests (or unions, with Labor governments) don’t hope donations will get them a hearing or better.

The truth is that without transparency about who is getting into politicians’ ears on such private occasions, it is impossible to know if and when influence is wielded.

We do know, however, those who donate (above a threshold) to the parties. So for example when an issue such as the future of the renewable energy target (RET) comes up, we can observe that companies and individual business figures with fossil fuel interests contributed a total of more than A$900,000 to the federal Liberal party over the four years from 2009-10 to 2012-13.

The government on Thursday released a report from its review, headed by business figure Dick Warburton, that recommends two options for the future of the large scale RET.

One is closing down the scheme to new entrants (an option the Prime Minister reportedly asked be included).

The second is winding back the target (of sourcing 20% of electricity from renewables by 2020) from the 26% to which it is headed, by a formula that the review claims would achieve a “real” 20% on current demand projections. The report also recommends either closing immediately the small scale renewable energy scheme, which principally involves roof top solar, or accelerating its phase out.

The review found the RET was putting downward pressure on wholesale electricity prices and over time would have relatively little impact on household bills. But it “leads to a transfer of wealth among participants in the electricity market” (that is, from the fossil fuel sector to the renewable sector).

The RET had delivered a modest level of emissions reductions, the review said, but it was a “high cost” way of doing that because it did not directly target emissions and only focused on electricity generation.

Hacking into RET would be an economic favour for generators who rely on fossil fuel, but disastrous for what has been a growing renewables industry. The RET is popular in the community, where people increasingly have solar panels and the like.

The Coalition at the election committed to the 20% target – if it cut back the scheme it would claim it wasn’t breaking a promise - though it did say it would have a review.

If the government goes down the anti-RET path, it will be heavily driven by ideology (remember Joe Hockey’s strange outburst against the wind farming he saw while driving to Canberra) and the interests of one part of the energy industry.

Abbott has a particularly strong view about coal. Speaking in Texas this year he said: “We don’t believe in ostracising any particular fuel … For many decades at least, coal will continue to fuel human progress as an affordable energy source for wealthy and developing countries alike.”

But politically, it makes little sense for the government to open up a fresh front of argument, especially given ministers are divided (with Environment Minister Greg Hunt being pro-renewables), and when the government may not be able to deliver a new policy anyway. Clive Palmer says PUP would not vote for change before the next election.

It would be better to limit the battles. This first week of the spring session has brought no noticeable achievements on budget items although talks have been underway and some in the government hint at progress that is yet to result in deals. Whether this is just cracking hardy remains to be seen. Given that it’s a matter of trying to negotiate with Palmer, no one could be sure how it will end, but it doesn’t look promising at the moment.

Palmer has his own problems, with speculation about trouble among the PUPs – it was claimed in one report that Jacqui Lambie was unhappy that Glenn Lazarus is PUP leader in the Senate, a position she thought she should have. This was hosed down on Thursday by some much-photographed kissing, but the possibility of disunity remains a challenge for Palmer and an opportunity for the government.

While on the outstanding budget items the outlook stayed bleak – although Treasurer Joe Hockey did reasonably in batting back a concerted Labor parliamentary attack on him – the elevation of the national security issue is playing for the Coalition.

With all eyes on Barack Obama’s next move, Abbott on Thursday told Parliament that if Australia were asked for military assistance in the fight against the Islamic State “there would be the standard approvals process, which would involve cabinet decision making, and consultation with the opposition.

"Should we be asked, we would want to look at any request in the light of achievable objectives, a clear role for Australian forces, a full risk assessment, and an overall humanitarian objective,” he said.

No-one doubts what answer would be given.

Bill Shorten is sticking close to Abbott, saying the Islamic State was a barbarous organisation and “we regard them as a threat”. He bawled out a Labor senator who suggested the government was scaremongering as a distraction from the budget, and told a news conference: “There will not be a debate in this nation in terms of political point scoring from either Liberal or Labor about the importance of tackling this threat.”

Abbott said there were “obviously discussions going on between the United States and its friends and allies about what more can be done” but “Australia has not been officially asked for military assistance”.

The way these things happen in diplomacy is that the request follows the acceptance.

When all that occurs – as is expected – it will mean the Abbott government, which has already seen some improvement in the polls since national security entered the debate, will go into its second year in a rather different position, though just how different is not clear.

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