The day after Prime Minister Julia Gillard announced the details of her government’s carbon tax, two opinion polls appeared that outlined the extent of the political task confronting Labor.
The Essential Poll and Newspoll that came out on the day after said the same thing: the Liberal-National coalition has a huge two-party preferred lead over Labor and, if this was to be maintained at the next election, Tony Abbott would become prime minister in a land-slide victory. These polls were hardly surprising, given that this has been the pattern evident in polling ever since the last election. Their usefulness as a guide to what might happen in 2013 (when the next election is due) is limited, however.
These polls were taken two week-ends ago, and since then, two important things have happened.
First, the Greens became the sole holders of the balance of power in the Senate and then, secondly, Ms Gillard finally released the details of the carbon tax. One of Julia Gillard’s greatest political achievements since the 2010 election (although it is rarely acknowledged) has been to consolidate the survival of her minority government. The key MPs who keep her in the prime ministership – Adam Bandt (Greens), Andrew Wilkie, Rob Oakeshott and Tony Windsor – are even more strongly aligned to Gillard and her reform package than they were at the beginning of the new parliamentary term.
To this must be added the comparative advantage of having a much less hostile Senate to work with. From here in, the carbon tax debate will be influenced by this important change in the political environment. In the meantime, the Gillard government’s big task will be to sell its carbon tax proposal and hope that the electorate is still engaged with the debate. While the details of the tax are still quite complicated, two things were immediately apparent that ought to assist Gillard in selling her proposal: first, unlike John Howard’s GST, this carbon tax is not going to affect anyone directly (the shops won’t close for eight hours as all the prices are changed, and there will be no Business Activity Statement); and secondly, linked with the proposal is a major economic reform that ought to be of great financial assistance to those at the bottom end of the economy.
The rather limited application of the tax undermines Tony Abbott’s hyperbole about a ‘great big tax’ on everything. Not for the first time in his career, Mr Abbott may have to re-think his approach to opposing Gillard, especially now that tax reform has been added to the debate. Economic commentators will be interested in the proposal to substantially alter the tax arrangements for those earning low incomes as part of the carbon tax package.
The rise of the tax-free threshold to $18,000 per annum represents a substantive attempt to address an economic problem in this country’s labour market that previous governments have failed to address. This reform should act as a major incentive for people on welfare to seek a return to the workforce thereby ensuring that an adequate supply of workers will keep wage growth in check with obvious implications for the crucial matter of the inflation rate. Dare one suggest that the Gillard carbon tax looks like a clever bit of policy whose main objective is about economics rather than the environment.
The battle for the 2013 election starts from now, and Labor strategists will be mindful that the Howard government faced a similarly bleak situation in the opinion polls in the immediate aftermath of the introduction of the GST and the loathed BAS. In that case, the Howard government resurrected its fortunes by turning to policy debates like border security and immigration in which the Coalition had a clear lead over Labor. In this instance, Labor’s proposed tax reform lets the party go back to its social democratic values for which there is some voter support. Gillard is a long way behind in the polls at the moment, but this may be a false dawn for the coalition.
A serious fight-back by the government should be expected, and this is a battle that has almost two years to run. Despite what this week’s polls are saying, the government should not be written off just yet.