Mr Abbott – How much is this going to cost?
Has Tony Abbott just kicked an own goal? Mr Abbott has indicated that should he win the next election, his first act would be to repeat the carbon tax. Indeed, even before he might be Prime Minister, Mr Abbott has said:
- “As soon as an election is called, the Coalition will take immediate and concrete steps to repeal the carbon tax.”
Fair enough. It is a big issue for Mr Abbott and the Coalition has every right to take that issue to the election.
Mr Abbott also indicated that:
- “On the day the election is called, I will write to the Secretary of the Department of Prime Minister and Cabinet to make it clear that, if elected, the first priority of a Coalition Government will be the repeal of the carbon tax.
- “I will also formally request the Clean Energy Finance Corporation to desist from making any further determinations in relation to grants, funds or financing. “
He goes on:
- “On day one, the Finance Minister will notify the Clean Energy Finance Corporation that it should suspend its operations and instruct the Department of Finance to prepare legislation to permanently shut-down the Corporation.”
- “On day one, the Environment Minister will instruct the Department to commence the implementation of the Coalition’s Direct Action Plan on climate change and carbon emissions.”
- “As soon as the carbon tax is repealed, the Environment Minister will introduce legislation to enact the Coalition’s Direct Action Plan on climate change and carbon emissions.”
That promise of Mr Abbott is wonderfully transparent and as is about as direct as one could ever wish to see. For that, Mr Abbott should be applauded.
But there is a flaw in what Mr Abbott is doing. It is the absence of costing for this quite dramatic policy change. It looks to be very expensive not just in terms of revenue lost from repealing the price on carbon, but also from the fact that he will retaining the income tax cuts and pension increases that are being paid for by the carbon price. If that is not the case that these costs to the budget will be retained by the Coalition in government, Mr Abbott needs to make that clear. If it is the case, the impact on the Budget needs to be assessed independently. Add to that the cost of implementing the Coalition’s policy of direct action and it is easy to see how Mr Abbott might be about to punch a massive hole in the budget bottom line.
To have credibility, Mr Abbott must also, on the day the election is called, contact either the Secretary of the Department of Finance and / or the Head of the Parliamentary Budget Office and ask them to cost the policies outlined above and have the results revealed before the election. This way, the voters can decide whether Mr Abbott’s policy proposals to repeal the price on carbon and implement Direct Action are worth it.
Indeed, if Mr Abbott does not cost his policy proposal on carbon and has those costs available for public consideration before the election, the promises above are vacuous.
Note that at the moment, the Budget surplus projections are:
2013-14: $2.044 billion.
2014-15: $5.318 billion.
2015-16: $7.469 billion.
These surpluses are not huge. It is only fair that the electorate fully understand whether the Budget surpluses will be blown out of the water with the proposal of Mr Abbott to change the way the problem of global warming is tackled in Australia.
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