Isra-Mart srl: PM's ghost has come back to haunt

www.isra-mart.com

THE ghost of "Real Julia" has returned to haunt the Prime Minister, who continues to struggle with her credibility.

If we cast our minds back to last year's election campaign, the response to the "Real Julia" announcement was that the public wondered whether they had only seen a "Fake Julia" up to that time.

This is the crux of Julia Gillard's struggle for authority.

This week, the Australian Financial Review claimed, as it now seems wrongly, that when she was deputy prime minister Gillard wrote a formal paper to a cabinet committee, entitled The Bipartisan Solution, in which she argued against a carbon tax and an emissions trading scheme. Yet this potentially explosive revelation only served to muddy the waters regarding Gillard and her attitude to the carbon tax.

The reality is that the Australian people cannot be sure that Gillard honestly believes her own statements and there is the deep suspicion that her sole motivation is to derive short-term political benefit. Take for example the triumphant tone of the original joint press conference announcing the carbon tax with Greens leader Bob Brown sharing equal billing in the Prime Minister's courtyard.

This was not a sombre occasion announcing a complex policy that was anticipated to be a difficult decision. The fact that the carbon tax debate has proven to be so negative is more a testament to Gillard's flawed political judgment and poor communication skills than evidence of policy courage.

There are dire consequences for Labor if the belief becomes entrenched, and it may already be so, that the Prime Minister is not telling the entire truth about the impacts of her carbon tax.

In response to Opposition Leader Tony Abbott's repeated claims about job losses in the coal mining sector, the Prime Minister has resorted to saying that coal mining has a "bright future" and that mining jobs are safe. This claim is laughable because the entire basis of a carbon tax is to make coal more expensive and to make competing technologies more affordable.

As the carbon tax increases over time, the ultimate outcome is that coal is eventually replaced by cleaner technologies. There is no other way for the government to meet its target of an 80 per cent reduction in emissions by 2050.

The Prime Minister understands this, yet continues to make the deliberately misleading claim that coal jobs are safe.

Labor's partner in this crusade, the Greens, have argued at length for an end to mining coal - not only for domestic use, but also for export.

A recent analysis by RMIT economists Sinclair Davidson and Ashton De Silva of Greens' policies towards the coal industry shows that if implemented, 200,000 jobs would be lost and $29 billion would be taken out of the economy.

Gillard has yet to explain the implications of Ross Garnaut's warning in his March 2011 paper that the federal government will need to provide what he termed "targeted structural adjustment assistance for any regions that are vulnerable to large-scale loss of livelihood as a result of the implementation of a carbon price".

If coal industry jobs are secure, according to Gillard, the government needs urgently to clarify which regions are vulnerable to mass job losses.

The truth is that Garnaut must have been referring to employment in carbon-intensive industries and there are few industries more carbon-intensive than coal mining and energy.

Gillard also continues to infer that China is reducing its emissions, in order to support her claim that Australia needs to act so as not to be left behind. Once again, the Prime Minister makes these statements fully aware they are simply untrue.

China is undergoing an accelerated version of the industrial revolution experienced in Western nations over the past 200 years or so. And while its economy has grown enormously in recent years, it remains a nation struggling to support a vast and relatively poor population.

China's GDP was estimated last year at just over $7000 a person, compared to the GDP of the US of $47,000 a person and Australia at more than $41,000 a person.

As Chinese representatives stated at the Copenhagen climate change conference, Western nations have based their economic development on carbon emissions produced over many years, while China's increase in emissions has occurred more rapidly, but over a relatively shorter timeframe.

China can also argue strongly that a significant proportion of its growth in emissions is due to consumer demand in other countries.

Gillard has also used the European Emissions Trading System as an example of other nations taking action on climate change. But this scheme was subject to an enormous ongoing fraud that cost European Union taxpayers an estimated $6 billion, and has also proven ineffective in reducing global emissions.

A 2010 report by researchers at the Carnegie Institution of Washington found that emissions in developed countries have effectively been outsourced to other countries, as manufacturing relocated. One of the researchers, Steven Davis, explains: "Just like the electricity that you use in your home probably causes CO2 emissions at a coal-burning power plant somewhere else, we found that the products imported by the developed countries of western Europe, Japan, and the US cause substantial emissions in other countries, especially China." This undermines another claim of the Labor government that emissions-intensive, trade-exposed industries can be adequately compensated.

The EU scheme has been criticised for being overly generous towards many of its industries and is regarded as having a much lesser impact than Gillard's proposed carbon tax, yet it continues to export its emissions to China.

Arguably the greatest impact in Australia will be on small business manufacturing, which receives no compensation under Labor's policy.

Small business manufacturers face the double whammy of the increasing value of the Australian dollar and a carbon tax. Many are reporting that the carbon tax will be the proverbial straw that breaks the camel's back and will put thousands of Australian jobs at risk.

Yet another issue undermining her credibility is that Gillard has sought the high moral ground in this debate with claims of environmental Armageddon for Kakadu and the Barrier Reef without a carbon tax.

Her policy shows that Australia's emissions will continue to rise under her carbon tax, which is why she refuses to detail the impact of her policy on the climate or on global temperatures.

There are good reasons for reducing global emissions and the world debated those reasons at Copenhagen in late 2009.

Political leaders across the world should be honest with their voting public and tell them that, in the absence of a binding global agreement, individual actions of nations, particularly smaller nations, are meaningless.

Australia should be part of any global agreement that is reached and we should take every reasonable step to protect the environment.