Labor needs a policy ‘circuit breaker’ now

Based on previous modelling for a CPRS (carbon pollution reduction scheme, via emissions trading), it has been argued that a carbon tax at $30/tonne would cost families $863.20/year.

It's difficult to extrapolate a figure for single income earners from this, but it would be reasonable to assume the costs could be easily absorbed by individuals on $80,000/year. As well, the rate is unlikely to be $30/tonne.

Therefore, in order to maximise the scope for overcompensation for low-middle income groups, including pensioners and the vast majority of workers, compensation could begin to be 'phased out' at around $70,000/year (or maybe somewhat higher), dissipating entirely at $80,000/year. For example, for those who could reasonably be described as occupying that range from 'upper middle class' to 'wealthy.'

Robust overcompensation for low-middle income groups will be crucial if Labor is to retain government in 2013. But this must be paid for somehow.

Therefore after reconsidering, the author believes that to provide the scope for such extensive overcompensation, a rate of at least $26/tonne, as preferred by Ross Garnaut, and with the 'cut-off points' suggested here, is preferable. And of course the rate and cut-off thresholds would have to be properly indexed.

Finally, compensation might best be provided in the form of regular cash supplements (also indexed), as otherwise tax cuts could be 'taken for granted' and forgotten. With regular cash payments there would be a constant reminder of compensation provisions.

A 'circuit-breaker' for Labor

Labor has been taking 'hit after hit' in the polls and in popular media for a long time now. There are many publications that will put a 'negative spin' on pretty much anything and everything Labor says and does.

The danger is that voters will 'switch off', virtually determining the government's fate more than two years ahead of the next election. The carbon tax may turn out well ultimately, but a year from now it may be 'too late' for the government.

The government needs a 'circuit breaker' and needs it now. Labor needs to break the cycle of fearful speculation with an agenda of constructive and visionary reform with which to inspire and engage the electorate. The National Broadband Network (NBN) helped Labor 'across the line' last time, but the government needs new initiatives, as well as substantial progress on the NBN.

A National Disability Insurance Scheme has long been touted as an option by rising Labor parliamentarian Bill Shorten.

According to the 'Every Australian Counts' website, a NDIS would: