Now to see if the fuss fades away or keeps burning

Now to see if the fuss fades away or keeps burning

THE debate over carbon pricing now shifts gear. Two questions are likely to dominate the coming weeks.

Will Australians shrug their shoulders and wonder what all the fuss was about, as the government maintains? And will repealing the carbon price behemoth, with all its associated programs, be a manageable endeavour, as the opposition insists?

Today’s Herald/Nielsen poll is instructive. More than half of voters believe they will be worse off under the carbon price – a figure that has not changed in a year. In fact, about a third of households will be worse off, usually by just a few dollars a week, according to Treasury.

The government says the ”lived experience” of the carbon price will calm nerves, and cites the GST as a precedent. But the antipathy may persist, says the Nielsen pollster John Stirton.

In fact, the Howard government needed about 18 months to get past the political damage of the GST. That is too long for this government.

It is a political truism that Abbott will blame every job loss and every factory closure on the carbon tax. If the public antipathy persists, he will of course ride that wave, declaring his plan to repeal the carbon price.

The government’s response to that is: he can’t, and he won’t. Once voters and businesses get used to the carbon price, and it becomes enmeshed in the economy, there will be neither the impetus nor the opportunity to prise it out again.

True or false? Elisa de Wit, a climate and carbon expert with the law firm Norton Rose, says forward electricity prices provide an insight. Energy traders put the odds of the carbon price still being around by 2015 at only 50-50.

Many businesses are delaying big investment decisions until they see the outcome of the next election, Ms de Wit says.

It would probably take Mr Abbott three years to repeal the carbon price, ”by which time parts of the business community might be saying, leave it in place”, she says.

That is not to mention the tricky question of undoing all the household compensation measures.

Interestingly, of the three big business lobby groups, only the Australian Chamber of Commerce and Industry is openly calling for repeal. The Australian Industry Group and the Business Council of Australia had misgivings about the carbon price but aren’t actually asking for it to be unwound.

They too are waiting to see how things play out, not least what Mr Abbott will bowl up as his alternative, when he puts some meat on the bones of his skeletal ”direct action” policy.

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