Tuesday 25th of November 2014

saved .....

saved .....

Now that, third time lucky, the Carbon Tax Repeal legislation, suitably amended, has passed the House of Representatives, and god and Clive Palmer and Bob Day and David Leyonhjelm willing, will pass the Senate in the next day or two, I have been reading some of the propaganda from the Liberal and National Parties before the September election about the impact of the carbon tax on the cost of living.

You might remember that before the last election Tony Abbott promised that households would be $550 better off every year when the Carbon Tax was repealed.

As part of this lie to the electorate of $550 in savings for each hosehold, the Liberal Party election gumff promised that because of the repeal of the Carbon Tax:

*   electricity bills would be 10 percent lower under a Coalition government;

*   gas prices 9 percent lower;

*   costs of Australian-made cars up to $400 cheaper;

*   aluminium production up 61 percent;

*   coal production 17 percent higher, and

*   steel and iron ore production 21 percent higher.

In February 2014, 6 months after the Abbott government was elected and [sarcasm alert] only 5 months before the repeal of the carbon tax was set to liberate aluminium production in Australia, Alcoa announced it would close ‘its Point Henry aluminium smelter and two rolling mills, costing a total of 980 jobs.’ I wonder how that stacks up against the promise that aluminium production would be 61 percent higher.

How did the Coalition arrive at their $550 figure? They used a Gillard government document which estimated the initial cost at $515 in the first year of operation, rising to $540 in the second year and $568 this financial year.  According to ABC FactCheck:

The document estimated the carbon price would cause an average household’s bills to rise by $515 a year. The $515 included:

*   $172 for electricity

*   $53 for gas

*   $42 for food

Treasury also listed increases to nearly all consumable products including petrol, pharmaceuticals, furniture, holidays and sporting equipment.

All other things being equal those figures would this financial year under a Carbon Tax be about ten percent higher, ie electricity bills would rise over the period 2012/13 to the current financial year (ie since the introduction of the carbon tax to today) by about $190, gas an almost $60 increase and food would be in the order of $46 more expensive.

So is any normal working class household likely to see reductions in the annual household cost of living of $550? No. Will any of us get electricity bill reductions in the order of $190? No. Gas bill reductions of $60? No. Our food bills cut by $46 a year? No.

Will the price of ‘nearly all consumable products including petrol, pharmaceuticals, furniture, holidays and sporting equipment’ fall commensurate to the identified impact of the carbon Tax? No.

Why not? While the climate sceptics used hip pocket arguments to entice working class people to vote for them their real aim was to destroy any action to address climate change. Let the market rule for these activist conservatives means abolishing the carbon tax, and having a direct action plan which won’t do anything either to reduce greenhouse gas emissions or change polluter behaviour significantly but will give them lots of money to take token action.

This is a government which, like its Labor and Coalition predecessors over the last 3 decades, is engaged in shifting more of the wealth we workers produce from us to capital.

The very logic of the repeal of the Carbon Tax is to see business, not working class consumers, reap the benefits.

For example, the Palmer amendments to force electricity and gas providers to pass on the savings impact only those two areas of capitalist production.

What about food and the price of ‘nearly all consumable products including petrol, pharmaceuticals, furniture, holidays and sporting equipment’? There is nothing in the amendments to force these prices down commensurately to the impact of the carbon tax or to offset Treasury’s claimed impact of the tax.

My guess is the amendments for gas and electricity providers won’t be watertight anyway and that the more clever providers will say the price increases this year with the carbon tax would have been even greater. ‘The increase will be only 8 percent instead of 12 percent.’

The reason for the doubling of electricity prices in the last decade wasn’t the carbon tax. It was infrastructure spending by utility companies and the quasi-monopoly positions they hold as a result of privatisation.

Gas prices are set to explode because the global price is higher than the domestic price and it is more profitable to export gas than to sell it here. Some estimates are that the domestic undersupply will force gas prices up by 18 per cent.

As to food, already Woolworths are saying that they didn’t increase prices because of the carbon tax so there won’t be any price reductions on their goods, including fresh and processed food. Maybe the ACCC should check that out although that is likely to be too difficult to entangle production cost and supply and demand increases from those of the carbon tax.

Not much of that promised $550 is going to go into your pocket. It is going to go by and large into the pocket of business.

One final point. The Coalition claimed before the election that families would save $3000 over six years with the repeal of the Carbon Tax.

That will be small recompense, if it were to happen, to the $3000 each family will lose every year as a result of the 2014 Budget.

The best way to get real compensation for the price reductions that won’t be passed on to working class consumers is to add $550 to every wage claim.

Where’s my household’s $550 carbon tax savings Mr Abbott?