Australia's Carbon Tax and the Role of Government

Wednesday, June 27, 2012
Amidst a sea of debate surrounding the Australian government's proposed Carbon Tax, it seems that a central key issue is being overlooked. The issue is not one that has ever been a focal point of public discourse in Australia since at least the post-war period, and arguably as far back as the early days of Federation. Namely, what ought to be the defined role of government in Australia, and to what extent should its reach be limited?

The Gillard Labor government is the first minority government in Australia since the second World War. It holds power in the lower house only with the backing of two independent MP's. At time of writing, this government is now looking to introduce a major new tax with far-reaching implications.

The significance of this move and the root of subsequent controversy, public rallies and demonstrations can be surmised in four historically anomalous points:

1) The proposed Carbon Tax is an initiative of a small country with relatively minimal contributions to global carbon emissions, which is not being followed by any major developed nation or any of Australia's neighbours in the Pacific region.

2) The tax does not have popular public support behind it.

3) The governing party promised during the previous election, prior to forming a minority government, that it would not introduce this tax.

4) The proposed tax has a very clear prescriptive or 'paternalistic' nature, designed to disincentivise certain economic activities that run contrary to ideological aims.

The last major tax imposed on Australia, the Goods and Services Tax (GST), was preceded by a similar assurance that it would "never ever" be introduced. However, when the Prime Minister of the day made an about-face on that position, he did subsequently take it to the following election as part of his platform and was narrowly re-elected, providing a mandate of sorts. The significant difference this time around is that Australia has a minority coalition government attempting to introduce major legislation in its first term of office, which it was elected under the assurance that it would not do.

The public demonstrations that have followed included a massive truck convoy that descended upon the nation's capital, Canberra, calling for a new election. Legal experts soon responded that such a move would not be possible under the country's constitution. It would seem that there is in fact little recourse that the Australian public can take, politically, under such circumstances.

In Australia, the people hold absolute power over their government for one day approximately once every four years, and extremely little during the interim. Could the Carbon Tax draw the public's attention to this matter, and finally call into question the size and scope of government in Australia?

Unlike in the United States and certain other democracies, where the Constitution clearly delineates the rights of the people from the encroachment of their government, Australia, from the time that it emerged from a collection of British colonies to become a Federated nation in its own right, has never had a thorough public discussion as to where the rights and opinions of the people end and the legislative power of government begins. Unless it should require more drastic political circumstances before confronting this question, perhaps now is the time.

By James T. Hannagan