Mining wage

Have companies learned the lesson of the climate wars?

Anthony Albanese has lately rolled out a useful shorthand phrase for what has been a horrific time in the development of Australian politics. We have all just experienced “a decade of denial and delay” on climate change.

Sometimes Albanese adds a word. “Almost a decade”, he says – quite rightly. We can say that the decade started well. Ten years ago this Friday, Australia’s carbon price kicked into action. We also know it worked – until Tony Abbott’s government repealed it. In the last decade we have had, in fact, two great years. Only the next eight were wasted.

Prime Minister Anthony Albanese is planning a multi-term government.Credit:Rhett Wyman

This may sound pedantic – but it’s important to understand the magnitude of the blunder. Much attention still goes to Kevin Rudd’s 2009 emissions trading defeat and the battles between Labor and Greens, but arguably what happened next should be more stark. A policy has been legislated. For two years he did his job. Then, despite clear evidence that it worked, it was taken down. If this had not happened, Australia would be eight years further down the road to a sustainable energy situation.

What if we were about to repeat that mistake, just in another policy area?

From this terrible period, three different groups took different lessons. For Labour, this is why the Prime Minister and his cabinet are so determined to lead a long-term government, making steady progress, remaining united: they want the reforms to last. The Liberal Party has learned only one lesson – and judging by Peter Dutton’s recent decision to continue to oppose everything, most still cling to it. For them, the only usefulness of climate policy remains the destruction of Labour.

And then there are the big deals. Not all big companies, but enough. He gets less attention these days in reviews from that era (I worked for Gillard), but he was a big player back then and that shouldn’t be forgotten. Feedback from business leaders lent legitimacy to Abbott’s campaign against carbon pricing and helped him win the next election. As a group, business was already boosted by their recent success in destroying the mining tax. After winning a relentless and dishonest campaign against good policy, why not launch another? And so continued one of the most remarkable periods of corporate aggression in Australian public life.

Illustration: Jim Pavlidis

Illustration: Jim PavlidisCredit:

Obviously, these companies got it wrong. The result is that Australia is worse off – along with many Australian businesses, left behind in the global climate race. It would be easy to make the mistake of comparing big business’ approach to climate then with its more sensible approach to climate today and conclude that it has learned its lesson. In fact, all that happened was that the rest of the world moved on. The business lobby did not suddenly wake up determined to act in the national interest. He had no choice. And so the most important comparison is with policy areas that are still evolving, in which policy is still developing, and in which coming to a sensible solution involves thoughtful thinking, not just copying what your counterparts are doing at home. ‘foreign.

Which brings us to wages and inflation. These seem like old problems, but in many ways they aren’t. Wage behavior has surprised economists over the past decade. Inflation is clearly a problem – but the truth is that we don’t yet know how long a problem will last. The Reserve Bank made some disturbing predictions, but then the Reserve Bank made a drastically different set of predictions late last year.