Bernard Keane of Crikey is out with his assessment of how newly installed Prime Minister Kevin Rudd can change the Labor policy platform vis-a-vis the economy and business:
Rudd has already publicly mused about moving to an emissions trading scheme earlier, which would send the carbon price permit plummeting to far below the price per tonne of the Coalition’s risible Direct Action scheme. Suddenly the Coalition would be the party of the more costly carbon pricing scheme, and not in a subtle way only understood by policy wonks, but in the most obvious way, the price per tonne of carbon abatement.
Spot on here with climate change suddenly a rather serious headache for the Coalition. It will be forced to continue either a ludicrous double dissolution policy or be forced into a humiliating back down for its ludicrous Direct Action policy. Keane goes on:
He repeated yesterday, when announcing his challenge, his mantra about being a Prime Minister of a country that makes things. With Kim Carr likely to return to the industry portfolio, expect a lurch into industry assistance, one intended to go much further in sharpening the difference between Labor and the Coalition on Australian jobs, a subject on which Labor still has some credibility with voters and that has some populist potential unexploited by Abbott.
Perhaps true but this is a policy area that offers potentially much more to Kevin Rudd than simple protection. Indeed, he could eschew protection (except car policies already in place) and look instead at changing the macro-economic settings that support a high dollar. MacroBusiness has described any number of initiatives that would bring the dollar down more quickly. So have others such as Peter Jonson and Ross Garnaut. These include tax and capital reforms, a different mix of RBA policies, and/or new deals with unions to contain wage inflation as the dollar falls.
Moreover, Rudd could make the dollar a part of the broader discussion about how to prepare Australia for a post-China boom world, as he clearly signaled last night that he has that in mind, which would leave Abbott and his happy band of austerians completely outflanked. Finally, Keane reckons:
…There’s also the small matter of the mining tax, which was crafted as the result of a deal between former deputy PM Wayne Swan, Gillard and the three transnational foreign mining companies that helped bring Rudd down. There’s no deal any more, and Rudd has a willing partner in the Greens, who’d be happy to see the tax expanded after the election — remember they have the balance of power in the Senate at least until July next year, and if Rudd lifts Labor’s vote significantly, they’ll keep it.
Rudd should revisit the mining tax later but he would be silly to do so now. It will distract from the post-China boom platform that offers him his best chance of re-election, as well as being in the national interest.
Some good points from Bernard Keane but as usual he is blinded by his unwavering faith in the Australian economic miracle.
