The Senate has rejected an Abbott government bill to repeal the carbon tax.
A combination of ALP, Greens and Palmer United Party senators, supported by Motoring Enthusiast Senator Ricky Muir, voted 37-35 to defeat the bill that would have abolished the carbon tax.
The bill failed due to a breakdown in negotiations between the government and the Palmer United Party. Palmer wanted the legislation to mandate that power savings be passed on to consumers. In the end, the amendment moved by Palmer was judged to be a tax that the Senate had no power to introduce.
The 9 bills that make up the Clean Energy Legislation package will now go back to the House of Representatives on Monday. The government has undertaken to incorporate Palmer’s amendments and this should be enough to guarantee that the bills will be passed by the Senate sometime next week.
Clive Palmer discussed the morning’s events with journalists at Parliament House.
- Listen to Palmer (11m)
The Minister for the Environment, Greg Hunt, and the Government Leader in the Senate, Senator Eric Abetz, held a press conference this afternoon to outline the government’s position on the Carbon Tax Repeal Bill.
- Listen to Hunt and Abetz (10m)
The ALP’s Senate Leader, Penny Wong, spoke to the media about the morning’s events.
Wong pointed out that the parliamentary chaos had seen the government move a guillotine motion to get the bills passed and then tried to filibuster the debate whilst it tried to negotiate with Palmer.
- Listen to Wong (7m)
The Leader of the Australian Greens, Senator Christine Milne, spoke to the media about the Carbon Tax legislation.
- Listen to Milne (12m)
The Liberal Democratic Party’s Senator David Leyonhjelm and the Family First Senator Bob Day spoke to the media about the Senate’s vote today.
- Listen to Leyonhjelm and Day (3m)
Sequence of Events
- At around 10am, the Senate voted 35-33 to consider the Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 [No.2] and 7 related bills as urgent bills. This meant that a time limit on speeches was imposed, together with a requirement that the bill be voted on at 11.50am.
- Between 10am and 11.50am, the Senate considered amendments moved by the Opposition and voted to reject them.
- Around midday, votes in the Senate reflected a conflict between the Palmer United Party and the government over PUP amendments. Frantic negotiations had taken place over the previous two hours.
- Palmer’s original amendment had been redrafted by the government. Palmer claimed that “must” had been replaced with “may”, resulting in the amendment being “vague” about mandating power savings for consumers. PUP then submitted revised amendments that said if savings aren’t passed on within 12 months, a business will be required to pay 250% of those savings to the government.
- Advice from the Senate Clerks said that the amendment might be construed as a tax, which the Senate is not permitted to introduce. Section 53 of the Constitution says: “Proposed laws appropriating revenue or moneys, or imposing taxation, shall not originate in the Senate.”
- Even though the government had accepted the amendments, the Palmer senators were not prepared to vote for the bill and trust the government to separately legislate their amendments next week. The amendments were withdrawn and the Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 [No.2] was put to a vote.
- At 12.31pm, the Senate voted 37-35 to reject the Carbon Tax Repeal bill. The ALP, Greens, Palmer United Party and Ricky Muir voted together to defeat the bill.
What Happens Now?
Barring any further difficulties with Clive Palmer, the repeal of the carbon tax will take place next week.
Palmer has agreed that the nine bills will be reintroduced to the House of Representatives, along with his amendments. The bills will be passed in the House on Monday and then sent back to the Senate. The Senate will pass the bills sometime between Tuesday and Thursday.
It is most likely that the amended bill will be passed next week, although Senator David Leyonhjelm (LDP-NSW) indicated today that he was sceptical about giving further powers to the Australian Competition and Consumer Commission to enforce the 250% penalties proposed by Palmer. If Leyonhjelm withdrew his support, it is likely that Senator Bob Day (Family First-SA) would do the same. The government would then be dependent on the support of Senators Nick Xenophon and John Madigan.
The government’s problem with the Palmer United Party can be seen in this interview with Tasmanian PUP Senator Jacqui Lambie on Melbourne radio 3AW.
Lambie calls for the government Senate leader, Eric Abetz, to be sacked. She calls on Malcolm Turnbull to support PUP’s call for a zero-rated emissions trading scheme. She seems to suggest that the final passage of the Carbon Tax Repeal legislation should be linked to an emissions trading scheme, although Clive Palmer has not said this.
- Listen to Lambie (8m)
How Embarrassing Is This For The Government?
This is the second time this week that the government has had difficulty getting its way in the Senate. On Monday, when the government tried to bring on a vote on the bills, Senator Ricky Muir ensured that the vote was delayed and debate continued.
There was an element of farce to this morning’s events. Having passed a motion to gag debate on the bills and force a vote at 11.50am, the government was caught out when Palmer moved new amendments. The vote could not be cancelled. The government rescued the situation by agreeing to pass the amendments in the House next week but its lack of control in the Senate was on full display.
The rejection of the repeal bill demonstrates the difficulty the government has in dealing with the Palmer United Party. Palmer’s unpredictability and volatility threatens the government’s legislative agenda. He has achieved an important political goal in demonstrating his power to frustrate the government. This was an inevitable turn of events in the first days of the new Senate taking office.
However, the government’s chief political objective will be achieved next week with the passage of the legislation to abolish the carbon tax and the emissions trading scheme that was due to come into effect next year. The signature legislative achievement of the Gillard government will be abolished. It has been a messy and drawn-out process, but the government will be able to claim that it has fulfilled its principal election commitment.
In the months ahead, the fate of the government’s Direct Action plan to lower carbon emissions is not clear. Clive Palmer’s shifting positions on this issue ensure that he will continue to position himself in the centre of the political debate. His populist position over energy prices demonstrates again that he is positioning himself as a friend of the ordinary voter.
It is Palmer’s success in demonstrating his political leverage that is the real story of this week. It’s worth remembering that today’s confrontation was over a bill with which the government and Palmer are in general agreement. The government has had a nasty taste of how the PUP may behave in the future on more contentious legislation. The government’s political skill will continue to be tested in the months and years ahead.