The Week That Was - Carbon Sunday Special Edition

A special edition to commemorate the announcement of the details of the governments carbon tax package.

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This week is almost over before it has begun, with “Carbon Sunday”. After months of speculation, indeed years of analysis and recommendations, it seems the answer is $23. Rather than wait we thought you’d like to see some of the commentary so far, after all RMIT’s Alan Pears had warned us to expect much sound and fury over the coming weeks.

In a combined lead The Age’s Michelle Grattan and Adam Morton believe Julia Gillard has embarked on a massive gamble to sell a carbon price scheme that delivers some tax cuts, but will cost more than 3 million households money. Peter Martin, also at The Age, says there isn’t a household in Australia that won't be, at least slightly, better off but when the carbon price is set against the tax cuts, about one-third will be worse off.

Tim Colebatch at The Age describes the biggest economic reform in a generation has a surprise last-minute twist: a Robin Hood tax reform that will make lower and many middle-income earners better off but make higher-income earners pay most of the cost of the carbon tax. Phillip Hudson at The Herald-Sun draws an analogy to the tax on smoking, and while four million households are being told it is all gain, no pain. The pain is further up the income scale where households will be out of pocket.

The Sydney Morning Herald ‘s Ross Gittins asks if the uncertainty is over? Do we now have the devil in the details? And tells us psychology sheds as much light on these questions as does economics. “We almost always expect bad things to be worse than they prove to be and good things to be better than they prove. And psychology teaches us another lesson: once the tax starts we will get used to it very quickly.”

At The Guardian in the UK not even the demise of The News of the World could keep “Carbon Sunday” of the front page: “The Australian government has unveiled one of the world's most ambitious schemes to tackle climate change … after a bruising political battle.”

Michael Stutchbury at The Australian asks, while Australia is getting out in front of the rest of the world, is it a brilliant way to cheaply reduce our greenhouse gases or are we recklessly shooting in the foot our wealth-creating industries. Michelle Grattan reminds us that Tony Abbott has warned the scheme “certainly sets up the next election to be a referendum on the carbon tax”, and that Julia Gilliard faces a herculean task to sell her carbon pricing scheme.

Peter Hartcher at The Sydney Morning Herald believes Australia's government today is at its most fragile in 70 years, so it's extraordinary that it could manage to put together any sort of unpopular reform.

The Sydney Morning Herald ‘s Adele Ferguson describes Julia Gillard as the Mary Poppins of politics. She has given two spoons of sugar to the majority of the electorate to boost her standing in the polls, and dropped the medicine on the top tax bracket and the businesses that won't come back to bite her. Paul Kelly at The Australian thinks she has become a carbon pricer, a tax reformer and a renewable energy champion rolled into one. That this package is a triumph for Labor-Green shared values and that is its tactical strength and its core defect.

Jennifer Hewitt at The Australian describes Canberra's grand carbon tax reform package will only raise the growing alarm in the business community that the Gillard government just doesn't understand. “The $23 a tonne tax is high enough to increase costs on business but not sufficiently high to … drive substantial change in energy use, provide investment certainty or reduce global warming.”

Clancy Yeates at The Age believes the big steel makers have been thrown a $300 million lifeline from taxpayers to help offset the pain caused by pricing carbon and the soaring Australian dollar. While John Durie at The Australian thinks it’s because the steel industry cried loudest it received the biggest handouts as the Gillard government attempted to minimise the fallout from its move to impose a carbon tax.

Meanwile The Age’s Tom Arup reports the owners of two highly emitting coal-fired power plants say they are prepared to talk to the government about being paid to close their generators
under the carbon price deal.

The Age’s Phillip Coorey believes there is a sentiment that the minor party has negotiated and settled for a than carbon price weaker in substance the one it defeated in December 2009, and all for what? One dumped prime minister, a hung parliament, a government on its knees and the real prospect of Tony Abbott becoming the next prime minister.

While Australia is now on the trajectory the world needs to take to avoid the catastrophic consequences of four degrees warming this century, ANU Climate Change Institute executive director Will Steffen said “we have to look at the end game, which is to decarbonise economies … by mid-century.”The Age’s Adam Morton wants us to get to the real test of the carbon price package: will it cut Australia's carbon dioxide emissions and beyond that, will it set up the economy for potentially even deeper cuts down the track?

And finally, Alan Kohler editor Business Spectator on the ABC described Australia's latest, and probably its last, climate change scheme as “the child of a marriage between unstoppable bureaucratic momentum and political desperation.” “It's pretty ironic that four years after a bureaucratic task force first recommended emissions trading, and 11 years after Kyoto, it gets up during a flimsy hung parliament.”