Labor unlikely to 'repent' on carbon tax, leaving Coalition at mercy of Palmer

http://www.theguardian.com/world/2013/oct/16/labor-carbon-tax-coalition-palmer

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Tony Abbott is demanding Labor “repent” for its support for a carbon tax (backing an efficient market to reduce greenhouse emissions is apparently, in the new prime minister’s estimation, a sin).

But the detail of the government’s repeal legislation reveals clearly that if Labor does not renounce its own policy, the Coalition will be entirely at the mercy of Clive Palmer — or, as some lobbyists have already dubbed him “carbon Clive”.

Labor is, so far at least, refusing to countenance the dismantling of its emissions trading scheme, while ducking Abbott’s attempt to blame the ALP for higher power bills by saying it would be happy to negotiate over ways to bring forward the end of the fixed price “tax” or reduce its rate. Combined with the Greens’ absolute opposition to a repeal, that means the tax would stay until the new Senate sits next July.

(The double dissolution threat is surely just political posturing, giving the media an easy headline to help in the Coalition’s bid to raise the pressure on Labor. With the constitutional provisions for a double dissolution unlikely to be in place before next April or May, it would be a brave government that took the nation back to the polls before trying to pass its legislation through the new Senate due to start sitting in just a few weeks’ time.)

Labor may buckle under the Coalition’s pressure. More likely, the new Senate (where it is likely that four of the eight crucial crossbench votes will be controlled by Palmer, who backs the repeal of the carbon price) could quickly pass the repeal. The government’s repeal legislation has been drafted with this outcome in mind.

But if, for whatever reason, the new Senate does not comply quickly, the Abbott government faces huge and potentially expensive complications.

Business groups and leading lawyers have confirmed to Guardian Australia that companies would continue to be liable for the tax, and if the outcome of the Senate vote appeared uncertain, would continue to pass it on to customers.

The longer that situation dragged on, the bigger the complications for the government. It would face at least $4bn in payments for compensation and free permits and would possibly have to refund companies for permits they were forced to buy. And the companies would have to figure out whether they continued to pass the tax through to consumers.

It may not come to this. The Coalition may well get its repeal through before, or shortly after 1 July. But if Labor sticks to its guns, Palmer — with his three- or four-senator voting bloc — assumes enormous power. That would be the same Palmer who is disputing his own $6.2m carbon tax liability and says companies should be refunded for all the tax they have already paid.

And, for the record, the mining magnate said on Wednesday any suggestion this situation constituted a conflict of interest was “bullshit”.

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