View from The Hill

Labor digs in for fight on carbon - and gets flak from business

Bill Shorten has made a tough political decision on carbon. AAP/Lukas Coch

After Labor today decided to dig in on carbon pricing, it now seems almost certain that Tony Abbott will have to wait until the new Senate arrives next July to get his repeal legislation through.

In opting to vote against the repeal, Bill Shorten and his shadow cabinet have taken the best of the poor political options available to them.

In parliament the opposition will move amendments for the carbon tax to be terminated and replaced by an emissions trading scheme – the position Kevin Rudd took to the election. When that is rejected Labor will vote no on the repeal.

In the Senate Labor and the Greens have the numbers to block Abbott’s plan until mid next year.

Labor has immediately got flak for not rolling over. Business is unhappy - it does not like the prospect of having to make decisions in the next few months on the basis of a government promise that the legislation will be passed eventually. There is money at stake and in politics the unexpected can happen.

Business Council of Australia chief executive Jennifer Westacott said the opposition should “respect the outcome of the election and not get in the way of what is a clear and fundamental Coalition government policy.” The Australian Industry Group said tartly: “We’ve had a lot of political upheaval over climate policy in the past few years, and disappointingly it looks like we’ll see more.”

Collateral political costs were inevitable, whatever Labor did.

Some pragmatists have wanted the party to avoid the fight, and move on, but the political gains would have been mostly illusory and the divisions in Labor likely to have wiped them out anyway.

Given that it was not going to accept the argument that the government had a “mandate” from the election, the opposition would have just looked tricky if it simultaneously said it supported carbon pricing but would allow the removal of that pricing. National secretary George Wright earlier this week warned of the danger of trying to be too cute.

Such contortions would have confused, disillusioned and perhaps angered Labor’s supporters and raised questions of what the party stood for.

They would have been hard to explain and could have sparked a nasty a row in caucus in the early days of Parliament and of Shorten’s leadership. It would have sent out the message that Shorten was expedient - a weathervane - when he needs to define himself in clear terms, and look principled and grounded. He already has some baggage from switching his support on the leadership twice.

Shorten made the best of Labor’s been caught between the rock and hard place. “Labor will never be a rubber stamp for Tony Abbott”, he said. “We accept the science of climate change and Tony Abbott doesn’t. … We won’t be bullied and I won’t be bullied by Tony Abbott, merely because he doesn’t accept the science of climate change.”

But he will have to be clear in stating the position. In trying to explain how Labor backs terminating the tax in favour of an ETS, it’s easy to muddle the listeners, as when he said at one stage “we’ll vote for the repeal”.

The general consensus is that the new Senate, with its gaggle of right leaning crossbenchers, will tick off the repeal after July 1 (although the fiasco of lost ballot papers in Western Australia means we won’t be sure for a while the precise Senate makeup).

The prospect of the new Senate doing what Labor says it won’t do is helpful for Shorten. It means the row over the carbon tax should be over by the latter part of next year (of course the Coalition will still be able to hark back to Labor’s intransigence).

As the Labor now faces up to its first serious tests of opposition – parliament starts on November 12 – the look backs continue, with Kevin Rudd’s confidant and political advisor Bruce Hawker next week releasing a book, The Rudd Rebellion, based on his diaries, in which he describes Rudd and Julia Gillard as the “yin and yang of the Labor party”.

“The public respected him and the party loved her,” Hawker writes. “He could woo the electorate and she could pull the caucus in behind him. … Together they were indomitable, but apart they were vulnerable: he to the faction leaders and she to public opinion.”

In an analysis similar to that given by Wright this week, Hawker argues that the “slow death of the Labor government started with that fateful evening in June 2010” when the coup was mounted, and says that before Rudd’s return Labor was facing having as few as 30 MPs in the 150 member House. When Parliament resumes it will have 55.

Listen to ALP National Secretary George Wright on the Politics with Michelle Grattan podcast, available below, by rss and on iTunes.