The Greens mess with Labor's mind

CARBON pricing is shaping as the battlefield for Labor and its leftist rival.

THE Greens are playing with Labor's head. They court or pressure Labor with tactical skill - on climate change, preferences, gay marriage, boatpeople and industrial relations - while Labor is trapped between its contradictory needs to confront and pacify its new rival on the Left.

Labor's frustration is palpable. It pretends to be in control but agonises about how to respond. Former finance minister Lindsay Tanner warned this week that "what you get with the Greens is left-wing rhetoric and right-wing outcomes", citing their rejection of Kevin Rudd's climate change bills as ultimate proof of his claim.

Delivering the John Button Lecture this week, Finance Minister Penny Wong, criticising the Greens, said: "We [Labor] do not seek a Senate quota, nor to target a particular seat. We seek to govern Australia for all Australians. We never have the luxury of only playing to a narrow audience. We have to build agreement. We have to persuade." She's right. But the historic failure of the Rudd government, passed to Julia Gillard, was its failure to persuade. And the Greens are the big vote winners from that failure.

Ten days earlier Climate Change Minister Greg Combet, in a considered speech, called on Labor to review what it stands for. Combet said Labor needed the courage to lead. It must uphold the principles of equity, social justice and compassion, and recognise that its abandonment of carbon pricing last term was a gift to the Greens and damaged Labor.

Meanwhile, in The Australian yesterday, Graham Richardson, former NSW right-wing factional master, demanded Labor go the path of "robust exchanges" against the Greens. Betraying a touch of desperation, Richardson asked: "Why doesn't the government cost all of the Greens' policies, lift the veil on the totality of their platform and expose what a joke Australia would be if the Greens actually got to govern the country?"

Sadly, there is an answer to Richo's question. Under the written terms of the Labor-Greens alliance, would you believe, the government actually helps the Greens to cost their policies and offers them access to the public service for their policy development. It's enough to make a Labor veteran laugh, or perhaps cry.

But Richardson went further. He said Greens leader Bob Brown was "arguably the best politician in the country" because he offered the facade of moderation to conceal the Greens' extremist character. Now, when Richo thinks the Greens have Australia's most effective leader, something serious is happening.

If you want proof the Greens have scrambled Labor's head, well and truly, consider the public ruminations by Gillard minister and former NSW right-wing party secretary Mark Arbib that it's time for Labor to abandon its opposition to gay marriage. Why is it time?

Because the Greens are stealing Labor votes, that's why. Nothing else. So Labor should cynically abandon its support for the foundational social institution, a move that will trigger a deeply polarising debate and brand Labor indelibly as a libertarian personal rights party ready to ditch any institution or principle. In the process, Labor will alienate permanently an important section of its base.

So what is the answer to Labor's 2010 political crisis? Support gay marriage, of course.

No, it's not satire, this view is gaining serious support. It testifies to how politicians can be fooled by opinion polls and miss the bigger picture. It verifies, again, the far-reaching impact the Greens are having on Labor.

On Thursday evening Australian Workers Union boss Paul Howes warned at the Sydney Institute that Labor risked "ending up in an inner-suburban ghetto where we are just manning the barricades against the Greens hordes".

But the Greens hordes are bereft of the working-class masses. As political analyst and former Labor senator John Black argues, the Greens have the highest income profile for any Australian political party, drawing on tertiary-educated public sector professionals, academics, teachers, environmental, arts, media and culture sector workers, residing in professional households, typically in the inner city, often single or with no children. While divided from Labor by values and ideology, there is also a Greens protest vote, giving Labor hope it can claw back some supporters.

The answer to such hopes and the showdown in this Labor-Greens Shakespearean drama will come later this term over climate change. Make no mistake, it will end in euphoria or tears. At present, the result defies prediction.

But pricing carbon is where Gillard and Combet are in fighting mode. This week Gillard was talking as an economic reformer pledging to "grow our economy without growing our pollution". She defined the principle that will govern her policy: to find the cheapest source of emissions reduction, and this is the reason she wants a market mechanism and a carbon price. Stung by criticism over her reform credentials, Gillard has picked pricing carbon as the issue to prove her mettle.

How will Gillard win this battle? There is only one way. She must prevail with Greens votes. Because the Tony Abbott-led Coalition will oppose carbon pricing Gillard's success or failure in parliament depends on the Greens. If the Greens vote with Labor later this term, then Gillard becomes a Labor hero for having the courage to price carbon. But if the Greens refuse to join the party, every pledge by Gillard and Combet is mocked and denied.

The problem is manifest: Labor is hostage to the Greens on carbon pricing. This gives the Greens vast scope for playing with Labor's head. Yet it also poses a test of Brown's leadership and of Greens priorities.

When the time arrives Gillard and Combet will need to mobilise public opinion and pressure the Greens. Is this feasible? Comments from Tanner, Wong, Combet, Richardson and Howes underscore a justified theme: the need for a new public debate with the Greens put under scrutiny.

This did not happen in the last parliament. In this Labor-Greens intersection the role of the ABC is critical because this fault line reflects one of the broadcaster's heartlands where its influence is significant.

Let's state the issue: it is whether the ABC continues to give the Greens immunity from criticism or whether it changes its de facto policy and treats the Greens not as a minor party of superior virtue but as a party that can make and break public policy, thereby deserving scrutiny similar to the main parties.

If the ABC fails to make this necessary re-assessment, Gillard Labor will be the serious loser.

Gillard's intent was signalled this week when she tackled the horror issue of rising power prices and argued the difficult proposition that the failure to price carbon will diminish and distort needed investment, thereby, as a consequence, generating its own price rises.

"Anyone who tries to pretend to you that the choice is between higher electricity prices with a carbon price and a lower electricity price with current arrangements is not telling you the truth," Gillard said.

This is the message she must sell to combat Abbott's populist assault. It is not for the faint-hearted. It will test Labor's nerves. At a time when US President Barack Obama has announced he will not be pricing carbon via congressional measures, the ALP's nervous nellies will soon urge the tactic of retreat. Labor's unity on carbon pricing is going to be tested.

But Gillard and Combet got firm backing this week at the second meeting of the multi-party climate change committee.

NSW Independent Pricing and Regulatory Tribunal chairman Rod Sims gave the committee two critical messages.

First, a carbon price was the cheapest way to meet any carbon reduction target. Second, once carbon is priced high enough then other schemes (renewable energy targets, solar and wind subsidies) should be removed.

Sims said electricity prices had risen by 30 per cent in real terms in the past four years.

This was hurting low-income households (Labor's base but not the Greens' base).

Even without pricing carbon, electricity prices will continue to rise because of demand and network factors. Sims was blunt: "Electricity generation from household solar and wind costs many times that of base-load gas generation." So Labor's task is obvious: it must lower emissions at least cost.

It is early days, but the dividing lines are the same as last parliament. Gillard and Combet must win where Rudd failed, arguing that pricing carbon is superior to Abbott's "direct action".

They will argue failure to act means energy insecurity, higher consumer prices anyway and greater inefficiency. They will argue the need for household and industry compensation.

Ultimately, the issue will reduce to a series of compromises and trade-offs. The Greens have a choice. They can stay at the table and join the compromises that deliver a carbon price or they can knife Gillard the way they knifed Rudd. In the meantime, watch them play with Labor's head.