Australians endearingly describe their remote continent as “Down Under.” Unfortunately, the expression also applies to their economy. Voters there hope this month’s election will lift the country’s fortunes, now that conservatives have ended six years of liberal Labor party rule. The vote holds lessons for Americans.
As reported by USA Today, Tony Abbott, a 55-year-old former Roman Catholic seminarian and Rhodes scholar, took over as Australia’s prime minister. Mr. Abbott was at one point deemed unelectable not only by opponents, but even supporters, according to the report.
A rotten economy can change voters’ minds. And Mr. Abbott is wasting no time righting the ship. According to The Australian, he already has scrapped the Climate Commission and frozen billions of dollars in renewable energy funding, all part of an effort to wind down the Labor party’s pet project, the $10 billion Clean Energy Finance Corporation. The Labor party said the entity was created to fund renewable energy projects that would otherwise struggle to get commercial backing. Imagine that. Businesses are not rushing to pour money into the black hole that is renewable energy.
Furthermore, the country’s carbon tax — enacted in July 2012 — has been wildly unpopular, leading to costly fees for power plants and factories and far higher electric bills for consumers. Mr. Abbott is preparing legislation to kill the tax.
The Australian election should send a message to the United States. Last week, President Barack Obama’s EPA administrator announced far tougher rules aimed at killing coal-fired power plants and, eventually, hammering all fossil fuels. If Democrats hold the Senate and win back the House in 2014, a cap-and-trade system, a carbon tax and more green energy subsidies will be high priorities for the president’s final two years in office.
The EPA’s measures will face court challenges, but if these rules actually take effect, the result will be a completely untenable spike in energy prices that consumers and companies can’t manage. If that happens, don’t be surprised if those same consumers rise up, just as they did Down Under.