The Labor Government is having a hard time convincing ordinary Australians of the need to price carbon now.
Business and the union moverment are vocal in their opposition (van Onselen calls them in "lockstep": http://www.theaustralian.com.au/business/opinion/carbon-tax-is-like-a-bad-smell-that-wont-go-away/story-e6frg9if-1226041792769
Rob Burgess in today's Business Spectator considers this is due to three main factors:
- Australians are not spending - the retail sales figures show dismal results for the first quarter 2011;
- Wage rises have been only in a few industry sectors, largely mining and resources, not retail, manufacturing, tourism, education and other struggling sectors; and
- Household debt: the RBA's aggregate data shows a dramatic and continuing decline in [discretionary income] due namely, [to] the debt we took on via housing finance...over the past decade: http://www.businessspectator.com.au/bs.nsf/Article/house-prices-carbon-price-ACTU-Jeff-Lawrence-pd20110420-G3SEK?OpenDocument&emcontent_Burgess
In the mortgage belt, the voters Julia Gillard needs to win over for the next election are increasingly aware that their houses are no longer appreciating as they used to, and in cities such as Perth and Brisbane they may well be depreciating. Equity withdrawal and the wealth effect that flowed from it are all but over.
In this environment, the immediate effect of upping the cost of everyday goods makes for difficult politics.
