Iemma predicts carbon calamity

FORMER NSW premier Morris Iemma has become the most senior Labor figure to oppose Julia Gillard's carbon tax. Mr Iemma says the carbon tax that forms federal Labor's platform for re-election in 2013 is environmentally marginal, economically costly and likely to lead Labor to a historic electoral train wreck. "One thing is sure -- it won't change the world, but it could change the government," Mr Iemma told The Australian.

Mr Iemma accused the Gillard government of betraying the Hawke-Keating legacy of economic reform, instead embracing the environmental policies of the Greens' agenda. "We embraced economic growth, and the benefits of economic growth, in the Hawke-Keating era, but we're fighting this battle on the Greens' turf, not our turf. Bob Brown wants to replace the Labor Party as a major party."

Mr Iemma accepted the science of climate change. "Yes, we should take action, but we should not get so far out in front that we injure ourselves," he said. He rejected the government's view that Australia's carbon tax was similar in scope to actions being taken by other countries. "Every day there are reports of growth and development in China, its growth in emissions will far outstrip our total emissions," Mr Iemma said. "The carbon tax at best reduces the rate of increase of emissions slightly."

Mr Iemma said the Greens had wielded excessive influence on the government's policies, pointing to the $10 billion Clean Energy Fund, which excludes carbon capture and storage. "We ought to be fighting the Greens on the Left with Labor environmental policies and Labor economic policies, not on the Greens' terms. We've adopted a policy which is part of the Greens' agenda. "And the Greens' agenda is anti-growth and anti-investment. Lower growth and lower investment lead to lower incomes and fewer jobs."

Mr Iemma said the sidelining of federal Resources Minister Martin Ferguson was "quite disgraceful". "We should always be standing shoulder to shoulder with steelworkers and miners and factory workers before we stand shoulder to shoulder with the likes of Bob Brown and Christine Milne," he added. "One of the reasons previously rusted-on Labor voters are parking themselves somewhere else is that we've confused our identity."

Mr Iemma said that NSW would be particularly hurt by the carbon tax in smelting, steelworks and manufacturing in western Sydney. "Voter reaction ranges from unease and uncertainty to outright hostility. I went down a coalmine myself recently and all the guys I spoke to were uncertain of their futures."

Mr Iemma said the NSW Greenhouse Gas Reduction Scheme, instituted by his predecessor Bob Carr and extended while Mr Iemma was premier, offered federal Labor a far more effective, practical and reasonable template than the carbon tax.

The scheme has resulted in 80 million tonnes of carbon abatement at relatively little cost and without substantial economic dislocation. "The NSW government started with a policy to constrain emissions, not an ideological position to constrain growth."

Mr Iemma's comments reflect the growing dismay of many Labor politicians in private. It also demonstrates a particular bitterness in NSW that Ms Gillard's February announcement of a carbon tax -- breaking an election promise -- made NSW Labor's March election defeat much heavier than it would have been.

He is the most senior Labor figure to come out publicly against the carbon tax and his comments represent a devastating setback for the government.


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