The debate on the emissions trading scheme will enter its endgame next week after a crucial meeting of Coalition MPs on Sunday to sign off on the opposition’s proposed amendments to the Labor legislation.
Malcolm Turnbull, who has staked his leadership on the partyroom allowing him to negotiate with the government on the amendments to be decided on Sunday, declared again yesterday that the Coalition would not be a credible alternative government if it did not offer amendments to the legislation.
“A major political party – any political party that aspires to be in government – has to have a clear and credible policy on action on climate change,” said Mr Turnbull, who was environment minister in the Howard government.
Homing in on hip-pocket concerns, Mr Macfarlane has written to federal Resources Minister Martin Ferguson demanding a full briefing as he drafts the Coalition amendments.
“From what we can see from Treasury modelling, the price of electricity to industry and households will rise by 30to 40 per cent,” he said – an outcome that would be “obviously devastating” for industry and could mean a power bill slug of up to $20 a week for households.
But the government says Mr Macfarlane has got his figures and the details of their compensation scheme wrong.
According to Treasury modelling released last year, the price of electricity will rise by an average of 25 per cent by 2020, with large variations between thestates.
In the first year, when the carbon price is fixed, household electricity prices could rise by about 7 per cent (an average of $1.50 a week), and in the second year when the market starts, by a further 13 per cent (an average of $2.80 a week). But the government has promised to fully compensate all low-income and middle-income households for CPRS-related rises, with the compensation continually adjusted as the carbon price increases.
And it is offering $2.75 billion over the first five years of the scheme to help small and medium businesses find energy-efficiency improvements to make up for higher power prices.
The Coalition is determined to address the compensation issue in the amendments to be presented by Mr Macfarlane and Mr Turnbull to their partyroom on Sunday. If endorsed by the party, negotiations with the government could start almost straight away.
Mr Turnbull’s colleagues are demanding he drive a hard bargain with the government – particularly in support of the small business sector – before they would consider voting for the scheme.
The Ozcar affair and the leadership destabilisation surrounding emissions trading have hit Mr Turnbull’s poll ratings, and new modelling by Essential Research yesterday suggests the voter verdict could be permanent, with 58 per cent saying they thought Mr Turnbull did not have “the temperament, patience and judgment to be a leader of a major party” – including 32per cent of Coalition voters.
Kevin Rudd said the government was “open to good-faith negotiations with all comers when it comes to climate change”.
The Coalition had hoped to appease the small and medium business sector by endorsing a hybrid emissions trading scheme proposed by Frontier Economics, which would have resulted in lower electricity price rises by reducing the scheme’s impact on electricity generators.
But the Frontier model failed to win the backing of major business groups and will not be endorsed by the Coalition. The government claims Treasury modelling has found a $3.2billion “black hole” in the Frontier scheme, but has declined to release its modelling.
Mr Macfarlane says he is also frustrated by the government’s refusal to release a study by the Morgan Stanley investment bank into the compensation offered to coal-fired electricity generators for their loss of asset value under the ETS.
Meanwhile, the Greens released an alternative climate change plan yesterday to cut Australia’s emissions by a minimum of 25 per cent of 1990 levels by 2020.