While Australians are worried about pending interest rate rises, increased power prices and taxes on everything, the Greens-led Labor Party is going to be forced to look at side issues first like same sex marriage and euthanasia. A side-tracked Labor won't cut its reckless spending which is building pressure in the economy, including on interest rates.
A carbon tax is the first product of the secret deal between Labor and the Greens. Just before the election Julia Gillard said: “I rule out a carbon tax”. Are we cynical to think now that this was just to win votes? This is a fundamental breach by Labor of its faith with the Australian people and one has to ask what more is to come? A carbon tax would mean a short term extra 25% electricity price hike and most probably a doubling in the price in the mid term.
Now we find that the Gillard Government is held hostage not just by the Greens but also its own members - Graham Richardson reveals that two ministers threatened to quit Parliament altogether after Julia Gillard tried to sack one from Cabinet minister and tried to demote another. Gillard then backed down.
The recurring theme here is that this government will continue to be dogged by broken promises and reckless spending. Leading economists are already warning that Labor’s budget surplus promise is at risk from demands coming from the Labor-Greens and others’ alliance. This follows Access Economics concerns that under the minority Labor-Greens alliance the budget is an “accident waiting to happen”.
Unfortunately, we are likely to have to pay higher taxes to fund the interest and repayment of Labor’s debt legacy.