The devastating defeat of the Labor Government in Queensland means that Federal Labor cannot win its forthcoming election. The Labor Party is in desperate straits having lost government in NSW, Victoria, Western Australia and now Queensland. But the scale of the Queensland massacre is unprecedented with nearly a 16% swing against Labor – about one traditional Labor voter in 3 abandoned support for Labor. It seems almost certain now that Kevin Rudd will challenge again for the Federal leadership – standard, myopic Labor thinking is that desperate times require desperate solutions and selecting Rudd would provide a politician popular in Queensland. The AFR this morning described his corpse as “warming”. This type of selection however would raise such serious questions of credibility that I cannot see it as having any chance of improving Labor’s prospects significantly. Labor is doomed.
BTW as I have made clear in the past I will vote Labor in the forthcoming Federal election because of their climate change policy. My main concern is that Labor’s carbon tax-cum-ETS will not be seen as sustainable given Labor’s nonexistent re-election prospects. This will mean that types of massive investment switches away from carbon-based fuels that make good environmental sense from the viewpoint of addressing climate change are unlikely to occur. The forces of darkness and stupidity on the right – the conservative side of politics that should support Pigovian charges to rid the globe of a massive externality – have won. My Labor vote will be little more than a wasted protest.
Update 1: Alan Mitchell in today’s AFR (subscription required, p. 62) remains optimistic that Tony Abbott will renege on his opposition to pricing carbon using the excuse (recently mentioned by Barnaby Joyce) that he is prepared to price carbon if the world shifts in the direction of doing just that. He argues the world – particularly the US – might shift given the need to fund mounting government deficits. Although a US commitment to use such tax revenues to fund climate friendly investments would seem to bind this could be reconfigured so the interest on such transfers was used for such purposes but the principal used to reduce public indebtedness. The argument is that the US is constrained to select some form of tax increase because of its budgetary position and this might be the most politically saleable way of doing so.
Update 2: The Victorian Government’s actions in abandoning the state-based 20% carbon-reduction targets on the grounds that the Commonwealth has set 5% reduction targets nationally seems dishonest given that the Liberal Party has stated it will abolish such Commonwealth targets. The simple fact is that they do not wish to address the issue of climate change because they do not see it as a problem. State Labor have bravely not committed to restore the 20% targets should they be reelected.