Sometimes the best explanations come from the most unexpected sources.

That happened in Federal parliament, when Malcolm Turnbull explained the proposed Emissions Trading scheme.

The proposed scheme is complex – and even the Federal government, which is sponsoring it admits it is having trouble explaining it.

The Former Opposition Leader, though, displayed his forensic skills brilliantly,
when he compared the proposed ETS – with the rival plan, that his successor, Tony Abbott, is offering.

Mr Turnbull’s speech is displayed in full on the ABC’s website www.abc.net.au, in The Drum section.

It’s a good read,  especially for those who  are still confused over what should be done about climate change.

Mr Turnbull says, for example, the government’s scheme, as amended, is now very similar to the one John Howard proposed, shortly before his government was defeated.

Surprisingly, perhaps, Turnbull also concludes that the ETS will be cheaper, in the years ahead, than Tony Abbott’s alternative.

He says the best policy, to cut carbon emissions, must have a price signal.

Mr Turnbull declared his belief “as a Liberal” that market forces would deliver “the lowest cost” and “most effective” outcomes.

He warned, too,  that alternatives, which rely on direct regulation and subsidies “would be more costly to the economy.”

Mr Turnbull quoted from a letter, that he had received from a senior public servant, to emphasise that point.

It said:”While I worked in government for a significant part of my life, I am horrified by the prospect of a ‘fund’ from which public servants give handouts to grow trees.

“It just does not work.”

Summing up, Mr Turnbull said:”This legislation is the only policy which can credibly enable us to meet our commitment to a 5 per cent cut in emissions by 2020.”

He said the proposed ETS would also have the flexibility to enable Australia to move to bigger cuts, when they are warranted.

Where do you stand, at the start of a bright new decade?

An old song puts it well.

“You load 16 tons – and what do you get?

“Another day older – and deeper in debt.”

This coal miner’s lament, which was once a huge hit, still  has lessons for  all Australians.

At the end of the noughties, for example, their nation is more  dependent on coal than ever.

That’s not a good look, in a world – rightly – worrried about climate change.

And debt levels have risen so sharply, in Australia, over recent years, that they now present a real risk to the nation’s financial stability.

At the turn of the Century, the average Australian owed a little more than $22,000.

According to the Reserve Bank,  that’s now $74,000.

So debts have more than trebled over the decade, while prices rose by just 35 per cent.

Repayment capacity hasn’t matched debt growth, either.

While average weekly earnings now stand at a truly impressive $1,249 a week – wages – from which debt repayments are made – rose by just 50 per cent over the noughties.

Don’t despair if you don’t earn quite that amount, though.  Most people don’t.  It’s the relatively small number, right at the top, who push that figure into the stratosphere.

The crash still dominates Australia’s prospects, even though its influence is now waning.

At the start of the last decade, Australia had chalked up 3.75 per cent growth – while  expecting something a little better in the year ahead.

On the latest figures, Australia’s annual economic growth rate was just 0.5 per cent and – once again – we are looking for something a little better in future.

The crash, though, hit Australia’s national finances very hard.

At the turn of the Century, for example. the Federal government took a 23.4 per cent revenue bite from Australia’s output.

That tax take is now up to 24.9 per cent.

The Federal government’s spending has also risen  sharply.

It was just 22.8 per cent of the nation’s gross domestic product, back then.

It is now about 27 per cent.

Stimulus packages might be necessary,  after stock market crashes.

Bu they are not cheap.

So what else hits the pockets and purses of ordinary Australians, today – and how has all that changed, over the past decade?

At 5.7 per cent, Australia’s unemployment rate is still low, by current standards.  The US rate, for example, is 10 per cent.

Most will have forgotten, though, ours stood at 7.5 per cent at the turn of the Century.

And Australia’s inflation rate – which was approaching 6 per cent then – is now down to 1.3 per cent.

Share prices had been rising strongly, as the turn of the Century approached.  But the tech-wreck  rock was just ahead.

That, sadly, became a model for a later disaster, too.

Technical advances were certainly impressive, at the turn of the Century .

But they were also over-hyped, on world share markets.

Sadly we  forgot that lesson, all-too-quickly.

If we had remembered it, we might well have asked some salutory questions, when complex financial products were also hyped, some years later.

So what lies ahead now?

We will make just one prediction, but we offer it with absolute certainty.

Expect the unexpected

It’s a safe bet.

The Federal government has served notice that it will bring back its carbon pollution reduction scheme after parliament resumes in February.

This inevitably raises the spectre of a double dissolution election, in the first half of 2010, as these bills, which have already been defeated in parliament, still have no clear path through the Senate.

The government took this – carefully calculated  – step when it released fresh data, which responds directly to Tony Abbott’s claim that the proposed scheme is just “a great big tax.”

The Acting Environment Minister Peter Garrett said, big polluters would have to pay, under the plan.

But everyone, who cut energy use or harmful emissions would be rewarded.

Mr Garrett’s main point, though, was that low income families would be more than fully compensated for the extra costs.

And half of Australia’s middle income earners would also be fully compensated.

He said Mr Abbott’s scare campaign was simply wrong.

In fact,  Mr Gattett said, Treasury modelling shows that  2.9 million Australians, who are on low incomes, would be better off under the government’s proposed plan.

On average, these families would be $190 a year in front.

But the Federal Finance Minister, Lindsay Tanner, also  said that people who are on  very high incomes,  like cabinet ministers, would not be compensated.

But the government left the main attack to Mr Garrett,.

“There are two simple facts nobody can avoid,” the former rock star said.

“The first is that there is no free way to tackle climate change.

“The second is that Mr Howard, Mr Costello, Mr Turnbull and the Rudd government all chose a carbon pollution reduction scheme to act on climate change.”

They had done so because this was the cheapest and most effective way to tackle climate change, as it puts a hard limit on emissions and funds compensation for families.

But the Opposition Leader persisted with his claim that the scheme is simply a tax.

“If the best the government can say is that 50 per cent of  of middle income earners will be no worse off, obviously a lot of people are going to be worse off under Mr Rudd’s great big tax,” Mr Abbott said.

The Liberal party sealed its fate today, when it elected Tony Abbott to lead it, by a single vote.

This was, certainly, the worst group decision taken anywhere since November 18, 1978, when Jim Jones led 900 of his followers – and 9 unlucky-by-standers in a mass suicide, in Jonestown Guyana.

Not because Tony Abbott, himself, is bad man. Or even unelectable.

Far from it.

But he came to power fronting a small, but now triumphant, group of climate change deniers, led by the former Liberal Senate Leader, Nick Minchin.

And he  owes his ascension to that, thoroughly unelectable, group.

A senior Liberal, Ian Macfarlane, warned last night that the Liberals could not win the next election, without a credible climate change policy.

Mr Macfarlane, himself, had invested heavily in that idea.  He had negotiated changes to the Labor party’s proposed emissions trading scheme which both the former Liberal Leader, Malcolm Turnbull, and the parliamentary Liberal party, itself, endorsed.

That caused Nick Minchin, who is often called the black prince, to revolt.

He declared that neither he – nor his friends – are convinced that human activity is producing dangerous climate change.

One of his liutenants, Eric Abetz, is optimistic about the politics, too.

Abetz told a radio interviewer today, that people are often surprised at how quickly political parties can recover from such events.

An opinion poll, published just last week, though, showed that Australians regard climate change as the most urgent environmental issue, that the nation now faces.

Decisions, like that taken today, do have consequences.

The Liberals have given the Prime Minister the trigger for an early double dissolution election.

Mr Rudd will be sorely tempted.

Australians are deeply worried about the implications of climate change.

Scientists say there is good reason for that.

The Liberals, though, have just declared that, as far as they are concerned, climate change doesn’t exist.

Harold Wilson once famously said that “A week is a long time in politics.”

No-one, who has watched events in the Liberal party, over the past week, could doubt that.

A three way contest for leadership of the deeply divided Liberal party is likely in Canberra this morning.

Malcolm Turnbull has declared that he will defend his position.  Joe Hockey says he will stand, if there is a spill of present positions.

But he has named a price.  That is a free vote for all Liberals, on the climate change bills that are now before the Senate. That would be the first free vote for the party since the Republic debate , a decade ago.

If the party agrees, the bills could well pass Parliament.

Tony Abbott had been saying that he would not stand, if Joe Hockey did.

However, Mr Abbott changed his stance, late yesterday, declaring that he would be a candidate after all, even if Mr Hockey stands.

So  Mr Abbott, effectively, will be the candidate of the climate change deniers, who rebelled against Mr Turnbull’s leadership.

The stakes in this battle are very high.

Ian Macfarlane, who negotiated the a climate change deal with the Federal government, declared in a television interview last night, that the Liberal party could not be a credible force in Australian politics, without a policy to tackle threats associated with climate change.

The former Liberal leader in the Senate, Nick Minchin, has led the campaign against the government’s proposed emissions trading scheme.

Senator Minchin, who is known by some of his colleagues as “the dark prince,” has declared that neither he, nor his friends in parliament, believe that human activity is producing global warming.

The Senate debated the government’s ETS bills, over an extended period, yesterday.

But it was still far from a final vote, late last night.

Liberal party MPs met, informally, throughout the day.

It was still unclear late last night, though, which of the three candidates will win today’s ballot.

The haggling, though, did raise at least some hope, on the government side, that the bills would pass parliament, after all.

If they are rejected, or blocked, for a second time, though, the Prime Minister, Kevin Rudd, could order a double dissolution – and take the nation to an early election that the Coalition would, almost certainly, lose.

The costs of tackling – and not tackling – climate change became clearer over the weekend, as prospects for a firm outcome, at next month’s Copenhagen conference receded.

A new report estimated that some 250,000 coastal properties, around Australia, could be at risk of flooding as sea levels rise, as a result of global warming.

It said Sydney airport is among the properties at risk.

Developments, on that scale, imply social disruption.

But property damage would just the start of all that.

Earlier studies have shown that many low lying Pacific islands could also be flooded, as Antarctic sea ice melts.

That could well involve the relocation of entire Pacific populations, involving people movements on a scale Australia has not yet seen.

Speaking at an APEC Leaders’ meeting in Singapore yesterday, the Prime Minister, Kevin Rudd, admitted officials, who  have been trying to get a firm outcome, from next month’s climate change talks in Copenhagen, had found themselves “running into all sorts of difficulties.”

“…and therefore it is time for leaders, politically, to step in,” he added.

The reality, though. is that there is now, effectively, no chance of reaching a binding agreement, on steps to tackle climate change, at the Copenhagen meeting.

That became clear when Asian leaders, at the APEC meeting, stepped back from their previous position, which had included a 50 per cent emissions reduction target.

Sources said this had happened at China’s insistence.

Mr Rudd insisted, though, that he will still be looking for “a robust outcome” from the Copenhagen meeting

The retreat by Asian nations, though, is certain to encourage climate change sceptics, when the government’s emissions trading scheme come before Federal parliament again  this week.

The Coalition appeared to be on the verge of a major breakthrough yesterday, in the private talks it has been holding with the government on its proposed legislation.

Reliable reports said the government is prepared to exempt Australia’s farmers, altogether, from its legislation, if the Coalition will pass it through the Senate.

Federal parliament resumes today with a huge issue, that will affect your finances, before it.

That’s right. Climate change.

The critical vote, though, will not be taken in the House of Representatives, which comes back today, but in the Senate, which resumes a week later.

The government, of course, doesn’t have the numbers in this upper house, to ensure safe passage of   the legislation, which would set up its planned carbon pollution reduction scheme.

At present, the nation depends, very heavily, on its coal exports.

And Australian coal is a major contributor to global carbon pollution, when it is burnt in Chinese power stations and steel mills.

You may think that this doesn’t concern you, directly.  But it does.  If the Federal government lost the revenue it raises, from that industry, it would have to look elsewhere, to replace it.

You would not be overlooked, in that hunt.

The government is planning a carbon pollution reduction scheme, based largely on carbon trading permits.

These will, certainly, affect the coal industry.

That has led some conservative politicians to argue that its bill should simply be rejected.

But there are dangers that way, too.

There is no better illustration of  that than this year’s bankruptcy of General Motors, a company that was once among the most powerful corporations in the world.

It went broke, essentially, because it kept producing big, gas guzzling cars, when Americans wanted smaller, more fuel efficient vehicles.

The coal industry isn’t going to disappear overnight.

But it, will, eventually,  go the way of the steam locomotive, as the world becomes much more serious about combating climate change.

The scientific evidence, already in, will make this essential.

But there are several things we should remember.

The change won’t happen overnight.  So there will be time to adjust.

It will be important, though, not to panic.

That will mean resisting the fear mongering now being spread by people who should know better.

One senior Conservative politician, who wisely chose to remain nameless was warning, at the weekend, for example, that carbon trading would cause Australia’s beef and sheep meat industries to collapse, overnight.

That, of course, is nonsense.  It should be seen as such.

This kind of talk is, essentially, based on what economists call “static analysis.”

It is all about “what is” now, not what will be.

The Prime Minister, Kevin Rudd, has been right about one thing, at least.

The  jobs, in future, will be in new industries, not in those we have today.

Australia can’t allow itself  to be trapped in coming decades, relying too heavily on commodities, like coal, which have only, a limited and restricted future.

Do Australians have coal dust into their eyes?

The question is worth asking, as the nation’s hopes for recovery rest heavily on hopes for increased coal sales to China.

But lower coal prices are already leaving a big hole in the nation’s export earnings.

The Treasurer, Wayne Swan, admitted that at the weekend, saying the value of Australia’s energy exports is expected to fall by 36.2 per cent this financial year.

The Federal government is making no secret of the fact that it is now looking to China to boost Australia’s growth  in the months ahead.

But things are already changing rapidly in China.

That country is already planning to generate 10 per cent of its energy from renewable resources, including solar power, by next year.

It expects, also, to lift that proportion to 15 per cent by 2020.

The Prime Minister, Kevin Rudd, has warned repeatedly that Australia could miss out on manby job opportunities, arising from technoligical change, if it hangs back on moves to combat global warming, in misguided efforts to protect the nation’s coal industry.

China’s move towards renewable energy will be swift, but not abrupt.

It will continue to import Australian coal for some years yet.

It’s move to renewables, though, has strong support, at the highest levels of the Chinese Communist party.

The country’s chief legislator, Wu Bangguo, made that plain, earlier this month, when he witnessed the signing of a deal that will set up the world’s biggest solar power station, in Ordos City, Inner Mongolia.

There was a lesson in that event, which the Senate would  be wise to accept.

It is due to debate the Federal government’s proposals for an emissions trading scheme very soon.

And, on present indications, the government’s legislation could well be defeated there.

The shape of Australia’s – eventual – recovery became a little clearer yesterday.

That happened in Federal parliament, when the Prime Minister Kevin Rudd, answered a question put to him by a West Australian Labor backbencher, Sharryn Jackson.

Ms Jackson had asked about developments that had occurred just an hour before question time began  in Parliament, at 2pm.

Mr Rudd said Chevron Australia had just signed three huge deals, to sell gas from its giant Gorgon project, to Japanese and South Korean customers.

He said, too, that Gorgon was just one of 80 resource projects, now under consideration in Australia.

“I am advised that these contracts could deliver up to $70 billion worth of exports over the next 25 years,” the Prime Minister told parliament.

“These are massive projects, that will generate prosperity for years to come,” Mr Rudd added.

He said the Gorgon project, alone, could create 6,000 jobs, in its construction phase.

There would be environmental benefits, too, Rudd said.

“Throughout the Asia Pacific, Australian LNG will  be increasingly important as a reliable, secure, clean energy source to power continued economic growth,” he added, in a statement issued later.

He said Gorgon is now set to become Australia’s biggest single infrastructure investment.

No-one is happier than the Prime Minister, himself, about Gorgon’s bright future.

The global economic crisis has left a huge hole in the Federal government’s revenues.

But it estimates that the Gorgon project, alone, will soon be boosting its revenues by some $40 billion a year.

So what does all this mean to you?

As a West Australian, your correspondent can assure you that money spent, on big projects like these, soon finds its way into the broader economy.

And Chevron is expected to spend some $33 billion, in the construction phase of its Gorgon project.

Kevin Rudd’s stars could hardly be brighter than they are now, on the eve of the Spring Session of Federal parliament which opens tomorrow,

His main opponent, Malcolm Turnbull,  has been crrippled by a scandal of his own making.

The Reserve Bank says Australia’s inflationary pressures remain low.

So it won’t be raising its marler interest rate of 3 per cent, anytime soon, despite what you might have read elsewhere, even though it, too, sees signs of the Australian economy recovering.

And to top it all, the International Monetary Fund, which watches government policies throughout the world, has just given the Rudd government a big tick.

As Wayne Swan notes. the IMF has praised the Australian government, in particular, for “its quick implementation of fiscal stimulus.”

The IMF said, too, that, that the Rudd government’s shift into debt had been “justified’ and that government debt, in Australia, is still  lower than that of any other advanced Western Country.

And, if all that was not enough, Wall Street rose strongly again on Friday, New York time, consolidating the gains it has made over recent months.

Luck can change very quickly in politics, though.

Fate. though, still seems to be on the government’s side, right now..

The big vote, in the new session of Parliament, will be the one the Senate is due to take, on the government’s proposed emissions trading scheme.

With Coalition Senators deeply divided on climate change  – and the numbers in the Senate very close  – the outcome simply can’t be predicted at this stage.

If the Senate does block this key government measure, though, Kevin Rudd will be one step closer to having the trigger for an  early double dissolution election.

The Prime Minister should be very careful stepping off curbs, over the weeks ahead.  The fates might well  want to even things up a bit.

The Prime Minister, Kevin Rudd, has effectively extended the Federal government’s three stage stimulus package by offering 50,000 new green jobs and training places.

That was done, with due ceremony, at the opening of the ALP’s National Conference in Sydney yesterday.

The announcement will inevitably be seen as a trade-off with the unions, after Mr Rudd’s blunt rejection of their earlier suggestion that his government should revive old-style “buy Australian” policies while the global economic crisis persists.

Mr Rudd said at the time that policies of that kind had produced the Great Depression of the 1930s’.

But he said the plan he announced yesterday would, instead, “build a stronger and greener Australian economy.”

The four part plan offers:-

• A 10,000 strong “National Green Corps” of long term unemployed youths, who will spend 26 weeks on projects like bush regeneration, walking track construction and restoration and similar projects.
• Green skills training, for 30,000 apprentices, on areas such as smart heating techniques and maintenance of advanced green motor engines
• Another 4,000 training places for insulation installers and
• Another 6,000 new local green jobs.

The Treasurer, Wayne Swan, who also addressed the conference said that Australia still has big challenges ahead, but the government’s stimulus packages had “made a difference.”

The best news, for the government, though, came late in the day, when the Roy Morgan organisation reported that, on its own measure, consumer confidence in Australia is now back at pre-crisis levels.

At 117.8 points, consumer confidence is now 25.8 points higher than it was in July last year – and at its highest level since January 2008.

Australia’s small business owners are not well prepared to meet  new obligations that they will face under a plan the  Federal government’ is preparing to deal with climate change.

A new survey, commissioned by the Australian Chamber of Commerce and Industry, put that beyond doubt.

There  are signs, too,  that the Opposition, which has a vital  vote on the issue, might split.

That became clear when sharp differences, emerged yesterday between the Opposition Leader, Malcolm Turnbull, and a key National Party Senator, Ron Boswell.

Mr Turnbull told reporters that business leaders want changes made to the government’s plan.  This was taken as a sign that the Federal Opposition might approve it later this year, if  acceptable changes are made.

However Senator Boswell, who is close to Queensland’s coal industry, scotched that idea.

He said Opposition members had decided, at a joint party room meeting, that they would oppose the government’s proposed legislation in both the House of Representatives and the Senate.

“Any decision to change that policy must be taken by the Joint Party room..,” Senator Boswell declared.

That was a clear challenge to Mr Turnbull’s authority.

The new survey, conducted by the accountancy firm KPMG, also showed  that more than 30 per cent of the 400 businesses which responded admitted that they had no knowledge of the Federal Government’s carbon pollution reduction scheme.

The chamber said small business operators were four times as likely  to make that admission as people in big business.

The survey also showed  that more than 55 per cent of those who responded,  also said they are not yet taking any steps to become better informed.

The government wants its new scheme in place before global climate change talks that are to be held in Copenhagen in December.

It is now before the Senate, which is currently in recess.

The proposed emissions trading scheme is the centrepiece of the government’s plan to meet the challenges of climate change.

Mr  Turnbull is also arguing that the government’s timetable is too rushed.

The chamber’s chief executive, Heather Ridout, described the survey results as “mixed.”

And she said there is much more to be done before business can be assumed to be ready for the government’s scheme and its impacts.

Kevin Rudd has your light bulbs in his sights.

Believe it or not, the old style incandescent light bulb is to be banned from November this year.

That’s a small, but  important, part of the Federal government’s new national strategy on energy efficiency.

The Prime Minister, who announced this new strategy in Darwin yesterday, described it as an ambitious roadmap to accelerate action on energy efficiency.

It’s meant to assist Australia’s transition to a low carbon economy.

Mr Rudd says it will help Australian families and businesses to cut their energy and fuel bills while reducing their carbon footprints.

It won’t all be down to the humble light bulb, of course.

The government also has plans to improve the energy efficiency of Australia’s refrigerators and air conditioners.

The plan is ambitious.

Mr Rudd says those two measures, alone, are expected to reduce Australia’s carbon pollution by 19.5 million tonnes a year by 2020.

He says that’s the equivalent of taking  some 4.8 million cars off  the nation’s roads.

All this will be done through a national effort, adopted by Australia’s Federal, State and Territory leaders, at a meeting of the Council of Australian Governments, in Darwin yesterday.

It will be comprehensive,

Mr Rudd also said there will be a concentrated national effort to phase out inefficient electric hot water systems.

That will start in 2010 and is expected to reduce emissions by another 30 million tonnes of carbon, over the coming decade.

Malcolm Turnbull supported the concept of an emissions trading scheme, when he was environment minister in the Howard government.

And he probably still does now.

However he has found little support for the idea in the joint Coalition party room, where it was discussed, yet again, yesterday.

The outcome, if that is not too strong a word, was essentially yet another decision wait and see what developments occur in this area.

That gave the Prime Minister, Kevin Rudd, a brief chance to draw attention away from the Coalition’s sustained attack on his budget.

Addressing parliament at question time, Mr Rudd mounted an attack of his own.

“What the Australian nation saw today was the Leader of the Oppostion rolled in his own joint party room,” the Prime Minister said.

Mr Rudd said the Liberal party’s “hard men” of the right had combined with the National Party to produce that result.

“The leadership of the current Leader of the Opposition has been fundamentally undermined by his inability to stand up to the climate change sceptic in his own party,” Mr Rudd crowed.

What the business community is looking for on climate change is certainty, the Prime Minister added.

These were powerful points.

And they would have been even more powerful if Mr Rudd, himself, had managed to take the firm stance he recommended on climate change.

But he hasn’t

The government has, formally, adopted a carbon pollution reduction scheme, but it has not,  so far settled firm targets.

And it has also delayed the start of its new scheme until July 2011, well after the next election, which must be held by late next year.

Don’t worry about an early Federal election.

It’s just not going to happen.

The Coalition has, certainly, identified the issue on which it will fight the next election – deficit and debt.

But not yet.

Malcolm Turnbull is all too well aware of one figure, that he doesn’t talk about much.

That is the huge gap that presently exists in the two party preferred vote, between the Rudd government and the opposition he leads.

That gap – 60 -40 -on the latest Roy Morgan opinion polls, published just last Friday, shows that the opposition leader still has much more work to do, before he can hope to win a Federal election.

A government measure, like the budget bills, must be rejected three times by the Senate, before it can become a trigger for a double dissolution.

Mr Turnbull has already declared that he is prepared to block the budget, particularly over the government’s plans to means test the private health rebate.

But as a former father of the house, Fred Daley, used to say, if you want to place a bet in politics, look for self-interest.

“At least you know it will be trying,” Fred was fond of  saying.

And Malcolm Turnbull’s self- interest, at present, does not lie with forcing an early election.

The opposition clearly has a lot more work to do, before it can hope to win the next election.

Its members are certainly comfortable with the debt and deficit issue.

It  resonates, powerfully, with nervous and conservative voters.

And no-one is accusing Kevin Rudd of being charismatic.

The numbers, though, are still clearly against Mr Turnbull taking such a drastic step.

He won’t do it just yet.

Besides the next full term election is now barely 18 months away.