The Labor party is often guided by polls and, accordingly, almost half of the Keneally state government members of parliament (24) announced their retirement before the March 26 election.
While various reasons will be cited for the defeat, Wendt suspects Labor party heavyweights would have preferred Premier Kristina Keneally to steer well clear of making climate change an election issue.
“The political damage to the carbon tax ‘brand’ if you like, is going to be enormous, because now the carbon tax can be associated with a Labor election thumping,” Wendt told ILN.
The state election will be the first opportunity to gauge how voters respond to Prime Minister Julia Gillard’s broken promise over not introducing a carbon tax.
The fact the policy backflip was not announced after the election could suggest the influence the Greens have on the minority federal government.
The Greens will control the federal senate from the start of July, and Wendt is concerned the Gillard government could break promises it made with the big-three mining companies over the Minerals Resource Rent Tax.
“Who knows what is going to happen to this mining tax once the Greens get control of the senate a little later this year?
“The government said one thing on the mining tax, and in their increasing desperation, I can quite clearly see them doing an about face on the mining tax in terms of what has been put on the table.
“It may well end up being a tax that is more palatable to the Greens, [that is] the original super-profits tax.”
While the carbon tax will mostly affect the bottom lines of coal-fired power plants and coal miners, steelmakers and associated manufacturing industries are also set to face strong burdens because of their high energy costs.
Aluminium production also requires plenty of electricity consumption, but Gillard recently met with Alcoa chairman Klaus Kleinfield in New York and assured him she was “conscious” of the jobs the company created in Australia, according to the Sydney Morning Herald.
She also reportedly met with BHP chairman Jac Nasser.
His executive colleague Marius Kloppers made public calls for the government to set a price for carbon months before the government’s policy backflip on the issue.
Wendt viewed this move as a strategic error on BHP’s part, and even said it “sort of” associated the mining giant with the “looney left”
The carbon pricing mechanism will remain undetermined for some time yet, even though it is expected to kick off from as early as July 2012.
Given this uncertainty, Wendt is curious to know how the big miner is currently positioned on the proposal, especially when considering the previous dispute over the resources super-profits tax.
“I would be interested to know where BHP stands in all of this, they are obviously for it conceptually, but are they for it on the basis of what has happened so far?”
While BHP’s current position is unclear, its rival Rio Tinto has already called for a real-world approach to pricing carbon.
Wendt has upgraded his forecast for the minority government to survive 18-24 months in office.
“When you have government holding on by one seat – that’s unstable – and you have got some individual figures (independents) that are pretty unstable as well.”
But he noted it would be hard to predict how much tensions could escalate if Greens Leader Bob Brown “gets his way”, and if pressure was applied to the proposed mining tax.
A Nielsen opinion poll yesterday echoed results of the Newspoll last week, placing the federal Coalition at 54% compared to Labor’s 46% on a two-party preferred basis.
