How the carbon tax made me a Liberal.

ERIN RILEY

For a while now, I've been increasingly convinced of the need to join a political party in order to really participate in our political system. I was torn, though: my economic moderation and belief in limited progressive taxation seemed more in line with the Liberal Party, while my liberal stance on many social and environmental issues seemed more at home with the Labor Party.

But with the announcement of the Carbon tax, the decision was made easy. The Labor Party has pretty clearly demonstrated its priority is on fundamentally reshaping the redistributive nature of the Australian tax system, and that it is willing to jeopardise something as important as pricing carbon in order to do so. 

While the Labor Party had been quite open with its plans to compensate low-income earners who would be disadvantaged under the scheme, it has not been quite so open with its plans to substantially overcompensate a large number of Australians. It's not just a slight overcompensation to build in a margin of error, either: according to the government's own publication, some households would be compensated in excess of 400 per cent of the anticipated costs. This clearly goes beyond the scope of the Carbon tax and into more wholesale economic reform, and it is economic reform that reflects the core beliefs of the Labor Party.

If Climate Change and implementing a price on carbon is as important as the Labor Party says it is - which is something I absolutely believe - then our representatives should be able to vote on it without also having to cast their lot in favour of significant new redistribution.

That is not to say redistribution is bad. All government is redistributive, by its very nature, and progressive taxation is a good thing. But the nature and degree of that redistribution is at the heart of our political debate: how much money should the government tax, from whom should it tax it, how should it tax it, and how should that money be spent. That is a conversation that should happen openly, not cynically conflated with an environmental policy that should be about pricing consumption.

These are not minor changes. The reforms will take one million Australians out of the income tax system, and will compensate some citizens well in excess of the anticipated cost of the program. An individual Senior on $30k a year will incur an anticipated additional $281 in costs, but get $1,000 in assistance. A single income couple with three dependents and a taxable income of $35,000 a year will get $1,017 in benefits, but should anticipate $480 in additional costs. Meanwhile, an individual with an income of $75,000 a year will receive $140 in benefits to $417 in additional costs. Perhaps most surprisingly, a senior couple with a taxable income of $80,000, split between the two of them at a 70:30 split, will receive $2,289 in additional benefits to $501 in anticipated additional costs.

How will these redistributions help curb consumption? How are these redistributions in any way designed to address the true cost of carbon? This is not a policy that simply seeks to compensate vulnerable individuals for the additional costs of a carbon tax. This is a policy that is designed to redistribute wealth.

Selling redistribution under the guise of environmentalism is disingenuous, to say the least. In failing to provide a carbon tax bill free of a clearly redistributive economic agenda that fundamentally and substantially shifts the tax burden, the Labor Party has shown where its agenda really is, and why it is not a party of moderation.

A vote for the carbon tax is a vote for greater redistribution. And while that may please the hard left, it has sent this moderate running to the Liberal Party.

Erin Riley is a professional communicator, semi-professional academic, and amateur blogger.