Wednesday, 2 November 2011

I'd be Lying if I said the Price on Carbon wasn't Taxing me too.

The climate of debate within our country at the moment has degenerated into a slanging match of who can fling the most vitriol towards our first female PM.
We have shock jocks wanting to " Put her in the same chaff bag as Julia Gillard and throw them both out to sea." Spectators in the Gallery calling her "a lying scrag", and who can forget the opposition leader appearing in a protest in front of the "Ditch the Witch" and "Bob Browns Bitch" placards. Yes, this is the kind of 'debate' we are having in regards to one of the most important legislations to face out country.

And all of this vitriol is apparently based on an alleged lie perpetrated by Gillard on the eve of the election. A lie which, if it were ever to be examined truthfully by our meeja, would be exposed not as a lie, but actually as a PM  pursuing, at its core, precisely what was promised on the eve of the election. Our media is simply (and imo deliberately) refusing to acknowledge the reality of this statement, and preferring to perpetuate the ongoing hatred and vehemence this 'alleged' lie has exposed.

To begin with, why don't we examine the statement made by the PM, instead of the cherry picked snippet we are fed daily by the meeja and the opposition. From the oo itself (so they really have no excuse for their subterfuge)
"I don't rule out the possibility of legislating a Carbon Pollution Reduction Scheme, a market-based mechanism," she said of the next parliament. "I rule out a carbon tax."
Now, that is pretty clear. She is saying, clearly, that her Government will pursue a Carbon Pricing mechanism, but not a Carbon Tax. There is a reason that the two options are raised in contrast to each other here, I would speculate, in that perhaps she was worried that someone, perhaps through ignorance, or perhaps through ideological grounds, may decide to conflate the two, and try and claim that she had broken an election promise on that basis. Because, simply put, they are very similar proposals in a broad, overarching view of public policy, although largely different in their core implementation. Hence the two can be easily confused, particularly, as it appears in retrospect, if you do not want to look at them too closely; which the media are steadfastly refusing to do. There is a very good, simple and concise explanation over at the The Conversation "Explainer: The difference between a carbon tax and an ETS" that explains this difference in a manner that our broadsheet media appears unable to do.
An ETS works by setting a cap on emissions and requiring emitters to hold a permit for each tonne of CO2 that they emit. The level of the cap determines the number of permits available.

There is no cap on emissions in a tax-based system. People are free to emit as much or as little as they like, but if they do emit, they must pay the tax.

Well, Gillard was very specific, but, in our brave new, unhinged world, conflating issues is the least of the PMs worries. Here, the media as a whole have simply cherry pick the portion of the promise they want to, and (deliberately??) ignored the caveats implicitly stated within that promise. From there, they can run with the whole "No Carbon Tax" meme. So, a few days after the announcement by the Government on its proposed Carbon Reduction Scheme, we had the media noticing that the 'fixed' price on the Carbon Credits 'acts essentially like a tax'. Gillard, for reasons unbeknown, agreed with them, and, no matter how correct the statement is, it was politically damaging. The truth is, if it is fixed or not, an ETS is similar to a tax, as even Malcolm Turnbull accedes to.
You can argue it's a tax, whether it's cap-and-trade or a fixed-price. 
The trouble is, the media are happy to run with the perception, and actively re-inforce it at every turn. In the same article, the author runs with this line
Ms Gillard never properly attempted the distinction.
Well, that is entirely untrue. The PM laboured, extensively, and vainly, on attempting to draw the distinction, but was shut down every time by a press who had their story, and were prepared to ignore all evidence to the contrary to pursue it. GrogsGamut had a post up at the time which details the arguments Gillard (futilely) used to prosecute her case
PM: …. I have agreed that we would start with a fixed price and then move to the full emissions trading scheme.

HOST: And you have agreed that the fixed price is the same as the carbon tax?

PM: Laurie, I didn't want to get caught up in what I knew would be one of those semantic word games about whether or not I would say the word ‘tax’. You know how these games are played, Laurie. A politician decides they are not going to say a word, and then media, people like yourself, Laurie, spend weeks trying to make them say it. I wasn’t going to do any of that
Along with

ALEXANDRA KIRK: So your problem is that you've had two opposing positions on carbon tax. The fundamental problem is that you broke an election promise. You said before the election there will be no carbon tax under a government I lead, and now you've shifted your position. So you don't have a mandate for a carbon tax.

JULIA GILLARD: Alex, we went to the 2007 election saying we had to price carbon and the best way of doing that was an emissions trading scheme where the market sets the price for carbon.

ALEXANDRA KIRK: But you went to the last election…

JULIA GILLARD: We went to the 2010 election saying we need to price carbon and the best way of doing that is an emissions trading scheme where the market prices carbon. What will we deliver? An emissions trading scheme where the market prices carbon.
Yes, there will be a period where the price is fixed, effectively like a carbon tax. But we will end up exactly where we promised Australians we would go.
That doesn't look like somebody who 'never properly attempted the distinction'. It looks more like somebody banging their head against the brick wall of somebody else who didn't want to listen. Unfortunately for Labor. It may be too late to change the perception (in fact, I think they gave up on that months ago). Which is a pity, as this isue will dog them forever now.

Another argument that is run a lot in the resultant 'debate' is the "it is a tax by definition". There are cases both for and against this, and, barring a high court decision, we will probably never come to a clear conclusion. I personally lean to the case that it isn't a tax by definition, based largely on the finding in the Journal of Australian Taxation 391  TAX OR PENALTY? - THE LATEST SEQUEL  By Vince Morabito which finds
The passage above clearly indicates that the concepts of taxes and penalties are mutually exclusive. A given exaction may be either a tax or a penalty, but it cannot be both.[9] Consequently, if the Commonwealth Act under challenge deals with only one exaction which is characterised by the court as a penalty, rather than a tax, then the law is not authorised by the taxation power and will be declared invalid by the court, unless the Commonwealth can place reliance on other heads of legislative power.
Of course, others may bring out other disputing case, but this misses the elephant in the room. The PM did not say that the Government would not be implementing a tax, she said they would not be pursuing a 'Carbon Tax', but a 'Carbon Price'.  As seen from Malcolm Turnbulls comments earlier, an ETS can easily be seen as a tax, and may well be defined as a tax in certain respects. It is highly likely that sections of the bills will refer directly to sections of the tax code. Whatever a classification of a 'tax' or not a Carbon Pollution Reduction Scheme holds, it is still the scheme that Gillard took to the election, as opposed to a Carbon Tax scheme. Note the difference here between the generic term of 'tax', and a specific 'Carbon Tax'. A CPRS is still a different concept to a Carbon tax, and, even if the high court deemed it a tax, is still an CPRS, and, therefore, still what was promised prior to the election.

To delve deeper in the moronic nature of the debate, and, assuming that everything I have written here is dismissed for whatever reasons, there still remains one final hurdle to cross, which truly brings in the contradictory nature of the oppositions claims. This fixed price period of the trading scheme is, well, fixed, for three years (initially). Now, while many refer to absolutely anything the Government extracts from a private entity a tax, broadly, regardless of the details, not everyone is as free with the terminology. Here is an example of one such person, who, when presented with a question by joni over at Cafe Whispers, enlightened us on his own interpretation of the intricacies between certain terminologies
JON HARRIS: Over here. The Opposition will impose a levy on business to fund a paid parental leave. When does a levy become a tax?

JOE HOCKEY: When it becomes permanent.
Of course, these rules only apply to certain political parties, which is all well and good, if you agree that rules for one and rules for another exist. But for the rest of us??

But will this rancid argument over a falsely alleged lie go away, and will we ever be able to actually discuss the actual merits or otherwise of the actual legislation? Going on the opposition’s behavior in parliament who, when presented with this opportunity, then proceeded to walk out en masse, only to appear outside and complain that the bills were being rammed through without any time for debate, I would guess not. And, more importantly, until our media can get back to reporting the facts, clearly and concisely, without picking through morsels to suit their agenda, while ignoring the core of what is said, I largely doubt that.

1 comment:

  1. And after Tuesday what will the poor msm have to write. The Bills will pass in the Senate, the legislation will be enacted from May the compensation packages start and in July the Carbon Tax begins. The end