Regardless of how well Labor, the independents and the Greens argue the case for the carbon price package in coming days and weeks, Tony Abbott has already secured a major victory. The fall in consumer and business sentiment in recent months across a range of indicators is attributable to several things, including worsening conditions overseas, but many economists are attributing it to concerns about the carbon price scheme.
Concerns, of course, that have been ruthlessly fanned by Abbott, exploiting uncertainty and lack of detail to warn the sky would fall in, driving up household costs and endangering jobs.
The fact that it’s now clear few jobs will be endangered and those households that aren’t compensated face only trivial price rises, while inconveniencing Abbott as his makes his way around the country, is secondary to the fact that voters appear to have taken on his counsel of despair.
Don’t think this is accidental. In fact it’s a brilliant ploy from an astute tactician. Recall it was Abbott, on becoming leader, that appointed Barnaby Joyce as Finance spokeman. Joyce’s only strategy in that role was to generate hysteria about the government’s innocuous levels of debt, to the point of suggesting Australia would default.
Senior Liberals were appalled at Abbott’s decision to appoint Joyce even before he opened his mouth and spoke of “economic Armageddon”.
Scroll forward to the election campaign, and Abbott took to comparing Australia unfavourably to Tanzania, Zambia, Ghana, Namibia and Botswana as an investment destination, because of the government’s plans for a watered-down mining tax. It has since been revealed Zambia was ripped off over US$100 million in mining taxes by Glencore while it was being spruiked as an example to Australia by Abbott.
And despite our apparently poor status as a destination for foreign capital, the level of investment pouring into our mostly foreign-controlled mining sector is so great as to worry the Reserve Bank.
Despite having apparently learnt the lesson of not underestimating Abbott in 2010, the government left itself wide open to his scare campaign by announcing a detail-free policy in February and then taking until July to finalise it. Invited to have a free hit, the opposition leader took it with glee, setting about convincing people they’d lose their jobs and face massive price rises.
This is a tactic taken straight from the Republican playbook. Despite the US economic recovery dying on the operating table, the Republicans have opposed any measures to try to boost job creation, have politicised the debt ceiling issue and pushed for massive spending cuts while refusing to countenance any form of tax rise, even opposing the ending of temporary tax cuts for the super-rich.
The plan, there, is obvious — keep the US economy stagnant in the hope of undermining Barack Obama’s chances of re-election next year. Millions of un- or underemployed Americans are in effect hostage to the US Republican election strategy.
For Abbott, the stakes are altogether lower, but the strategy is similar: talk down the economy as much as possible to secure a political advantage. An economy in rude health after July next year won’t be a good look for carbon price opponents, especially not if unemployment goes lower. It becomes a lot harder to argue that Julia Gillard has ushered in the four horsemen of the Apocalypse if the economy is booming and running out of workers, except to the extent that the Liberals will probably try to blame any interest rate rises on the carbon price as well, however contrary to reason that would be.
But a flatter economy, courtesy of poor retail sales growth and maybe people putting off renovations or property purchases because they’ve been convinced a carbon price will have a material impact on them, can be blamed on the carbon price. Better yet, it might reduce tax revenue, making it tougher for Labor to achieve its 2012-13 surplus.
So far, as consumer sentiment indicators go, the tactic has worked brilliantly for Abbott. The bloke is writing the playbook on negative campaigning. If only he’d use those skills to prosecute the case for good policy. Or, in the case of the Liberals currently, any policy at all.
Crikey is committed to hosting lively discussions. Help us keep the conversation useful, interesting and welcoming. We aim to publish comments quickly in the interest of promoting robust conversation, but we’re a small team and we deploy filters to protect against legal risk. Occasionally your comment may be held up while we review, but we’re working as fast as we can to keep the conversation rolling.
The Crikey comment section is members-only content. Please subscribe to leave a comment.
The Crikey comment section is members-only content. Please login to leave a comment.