Last week when the lower house of Federal Parliament passed the carbon tax, Opposition leader Tony Abbott didn’t look like a man who had been dealt a mortal blow.
Indeed, the passing of the tax appeared to give Abbott fresh energy. He launched the theatrical “pledge in blood” promise to repeal the carbon tax and yesterday the Coalition was telling anyone who would listen that the tax will be gone just six months after it takes office.
The Opposition will also eliminate the $10 billion clean energy finance fund which is to be used to help transform the energy sector from having a reliance on coal-fired power stations.
It’s strident stuff and, in the eyes of Abbott, a big vote winner. The Coalition appears to think that it’s got lots of households and much of the business community on its side and that support will mean a big win at the next election.
But as I wrote on the day after the carbon tax bill passed the House of Reps, I am not so sure business welcomes the idea of killing the carbon tax as much as Abbott thinks.
That has been highlighted this week, with a number of businesses indicating they will delay certain energy related investments as a result of the uncertainty.
The chief of Victorian generator Loy Yang summed up the mood quite well yesterday.
“What we have got now is two years of uncertainty.”
Loy Yang’s primary fear is that it could be left holding hundreds of millions of dollars worth of carbon credits it would be required to purchase under the Labor regime if Abbott does follow through on his repeal threat.
That’s an expensive problem to have, but it is not just the big polluters who are at risk here. The Government claims (and it’s a hard claim to substantiate, I would have thought) that the uncertainty could delay $5 billion worth of investment.
The uncertainty will trickle down to SMEs, who may now delay investments in energy reduction initiatives, greener supply chains and greener production methods.
Why bother making these changes when the environment could be so different 18 months after the tax comes in?
The thing to remember here is that the Coalition isn’t against reducing greenhouse gasses – it’s just got another way of getting there.
Surely the more sensible approach for Abbott would have been to say “we’ve lost this vote, the carbon tax is coming in but we’ve got our own ideas and we might seek to make changes if we win power”.
This blanket “pledge in blood” stuff runs the risk of making Abbott seem like a risky proposition, particularly when you add the Coalition’s promise to stop building the NBN should it win office.
Businesses hate uncertainty and at this point Abbott is guaranteeing it.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
