The business lobby groups wanted a carbon emissions trading scheme -- and now, thanks to Malcolm Turnbull, they have one. The Business Council of Australia "welcomed" the deal between the government and opposition on Tuesday, while the Australian Industry Group repeated its "support" for an ETS.
On paper, the events of this week look like a victory for the business organisations. But what happened in Canberra in the past few days may prove to be the high-water mark of the influence of big business in Australian politics. Despite high-profile and high-powered lobbying from business organisations in favour of the ETS, nearly half (and by some accounts, more than half) of federal Liberal Party MPs wanted either to delay or block it.
Ten years ago, even five years ago, this sort of reaction from Liberals against something big business said it wanted would have been unheard of. It shows how much Australian politics has changed when, on an issue such as emissions trading, the ALP is more eager to follow the line of big business than is the Liberal Party.
The split between the Liberals and big business says more about big business than it does about the Liberal Party. These days the objective of the organisations that represent big business is more likely to be to maintain a working relationship with the government of the day.
If in a few years somehow the ETS is not the disaster many predict it to be, and if somehow the rest of the world follows Australia's lead, then these business organisations will deserve congratulations for their wisdom and leadership. But if China and India, for example, don't sign up to cut their emissions, what happens then? Will the switchboard operator at the Business Council take the telephone calls of the former employees of the Gladstone aluminium smelter in Queensland?
At the moment it seems as though everyone (except Kevin Rudd) is angry with Malcolm Turnbull. His backbenchers are angry with him. Liberal Party members are angry with him. And everyone who thinks either that Australia shouldn't have an ETS or should have an ETS in a different form is angry with him. But while perhaps you can blame Turnbull for the way he's handled the politics of the situation, he shouldn't shoulder all of the opprobrium. Turnbull and Rudd have a point. What they've agreed to is not very different from the emissions reduction scheme that John Howard took to the last election. Many people are complicit in the Liberals' ETS debacle -- not just Turnbull and his shadow cabinet.
In the lead-up to the 2007 federal election it was the influence of the business lobby on Howard that finally convinced him to sanction the coalition having an ETS policy.
Business sold the need for an Australian ETS because it was prudent to take out "insurance" against the risk of climate change. Business has stayed staunchly behind an ETS even as it became clear that because of Australia's reliance on cheap and plentiful coal an ETS would have a proportionately greater impact on this country than on any other developed country. Even after it was revealed that the Prime Minister's much-vaunted Treasury modelling -- which purported to demonstrate an ETS would have a minimal impact on employment -- was based on the patently false assumption that if Australia had an ETS every other country would have one, too, business remained firmly for an ETS.
In recent months it's been claimed that as imperfect as the ETS is, nonetheless it's necessary because of the need for business certainty. The strength of this argument is debatable. What the price of carbon will be is unknown and any legislation passed in the next few days will inevitably be amended before the start of the ETS on July I, 2011.
On many of the big policy issues of the Rudd government's first two years, the Liberal Party has taken a different policy position from the business organisations. The business organisations said the stimulus package was timely and the correct size. The Liberals opposed the stimulus package. And on industrial relations a significant proportion of the Liberal party room want to reopen the debate about Work Choices. Big business doesn't. Given all of this, one can only imagine the degree of sympathy Liberal MPs will have for the pleading from business organisations to lower the corporate tax rate when the recommendations from Ken Henry's tax review are released.
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