Michelle Grattan, University of Canberra

The bipartisanship about the path to a long-term settlement in the Middle East has finally been irrevocably broken.

The shadow cabinet, meeting Tuesday morning, did not just confirm the Coalition’s disagreement with the government’s decision to recognise a Palestinian state. It also decided that recognition would be revoked by a Coalition government.

In a statement after the shadow cabinet, Opposition Leader Sussan Ley and the shadow foreign minister, Michaelia Cash, said: “A Coalition government would only recognise a Palestine state at the conclusion of a proper peace process”.

On Monday, Prime Minister Anthony Albanese announced Australia would recognise a Palestinian state at the United Nations General Assembly next month. The government is not putting preconditions on recognition, but is relying on assurances the Palestinian Authority has given.

In its statement, the opposition said Albanese had specified recognition was “predicated on there being no role for Hamas; the demilitarisation of Palestine; an acknowledgement of Israel’s right to exist; free and fair elections in Palestine; and, reform of [Palestinian] governance, financial transparency and the education system, including international oversight to guard against the incitement of violence and hatred”.

But, the Coalition said, “unfortunately the Albanese government has made it clear that they will still recognise a Palestinian state, regardless of whether or not their own conditions are met.”

Former Prime Minister Scott Morrison said that in government, the Coalition had listed Hamas as a terrorist organisation. “Our Labor successors have regrettably rewarded them through this action.

“I know this is not their intention, but it is the result. The caravan of appeasement is not one we should join”, Morrison said on his website.

While the split in bipartisanship has come to a head this week, it has been in the making for a considerable time.

The Coalition has been steadfastly rusted onto Israel (despite having some members, including Ley, who in the past had expressed support for the Palestinians).

In recent years, Labor has become increasingly divided between those wanting to stick to its traditional alignment with Israel and a growing number of pro-Palestinian supporters, who eventually succeeded in getting recognition of a Palestinian state into the party’s platform.

In the recent election, the Liberals pitched to and attracted many Jewish voters, while Labor was concerned with keeping the support of its Muslim constituency, located especially in western Sydney.

The government’s criticism of Israel’s approach to the war has intensified as the conflict has dragged on with no sign of resolution.

Once the current conflict reached its present impasse, with ever-more graphic footage of the suffering in Gaza, and countries such as France, Britain and Canada signalling Palestinian recognition, it was almost inevitable the Albanese government would follow, and the Coalition would oppose that decision.

The government argues something has to be done. It chooses to believe assurances given by the Palestinian Authority. It speaks as though the intractable players in this Middle East conflict can be influenced, even though the ongoing conflict makes this a heroic assumption.

Albanese undertook a round of Tuesday interviews to defend the government’s decision. Often reluctant to spell out the content of private conversations with overseas counterparts, the prime minister is being expansive about his conversation last Thursday  with Israeli Prime Minister Benjamin Netanyahu.

“It was a conversation which reflected the conversation that I had with him in 2024. And I expressed to him my concern that he was putting the same argument that he did in 2024, that military action against Hamas would produce an outcome. That hasn’t produced an outcome. What it’s produced is a lot of innocent lives, tens of thousands of innocent lives being lost.

“I expressed my concern about the blocking of aid that occurred  as a conscious decision by the Israeli government  earlier this year,” Albanese said.

“He again reiterated to me what he has said publicly as well, which is to be in denial about the consequences that are occurring for innocent people.”

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Michelle Grattan, University of Canberra

Treasurer Jim Chalmers has been putting it succinctly, declaring it’s a question of when, not if, Australia recognises Palestine as a state.

It’s a line Foreign Minister Penny Wong used more than a year ago. This week Wong was sounding impatient. “The reason for urgency behind recognition is this. There is a risk there will be no Palestine left to recognise if the world does not act,” she said.

For the government, recognition is as much about domestic politics as foreign policy. Australia has no influence on what’s happening in the Middle East (other than donating aid). But the Australian public is increasingly horrified by the images of the humanitarian crisis.

It’s a reminder of the power of the visual. More than half a century ago, the pictures coming out of Vietnam helped turn the US public against that war.

Right now, however, Australia remains in limbo on its journey towards recognition. The destination might seem clear but the exact arrival date is less so.

Observers are expecting it by the time of the United Nations General Assembly in late September. Anthony Albanese will be there, delivering an address during leaders’ week. The announcement could be made in the run up, or in that week.

France, the United Kingdom and Canada have all flagged recognition, the latter two with varying conditions attached.

Asked in late July about whether Australia would announce recognition at the UN, Albanese said Australia would make a decision “at an appropriate time”.

“We won’t do any decision as a gesture. We will do it as a way forward if the circumstances are met,” he said. He spelled out a couple of these. “How do you exclude Hamas from any involvement there? How do you ensure that a Palestinian state operates in an appropriate way which does not threaten the existence of Israel?”

In any likely scenario, there will be no positive answers to those questions in the foreseeable future. Nor does there seem, so far, much chance the Netanyahu government in Israel will take much notice of more countries recognising Palestine. The only country, if any, it appears likely to be influenced by is the United States, and President Donald Trump’s future actions are unpredictable.

But, leaving aside the prime minister’s longstanding personal pro-Palestinian views, Albanese has to be seen to be doing something. Pressure has been long mounting in the Labor base and among the party membership for recognition. The Sydney Harbour Bridge march last weekend, attracting at least some 90,000 people (march organisers estimated many more), reemphasised to Albanese that he needs to be in tune with his base on this issue.

An instructive lesson comes from the situation in which NSW Labor Premier Chris Minns finds himself. Minns and the NSW police opposed the march going over the bridge on the grounds it would be too disruptive – they were overridden by a court decision. But ten of Minns’ caucus members marched, including environment minister Penny Sharpe.

In the federal caucus, Ed Husic, now on the backbench, is out in front on Palestine recognition. But whatever impatience there may be in caucus generally about the government’s perceived slowness, it is so far being contained. Still, Albanese won’t want to lag behind his colleagues on what is an electorally sensitive issue for Labor in some seats.

As the government prepares its timing, Albanese has embarked on a diplomatic round. It was not unexpected that he spoke with French President Emmanuel Macron this week. More surprising was his phone call with the Palestine Authority’s President Mahmoud Abbas, who is widely regarded as a discredited figure.

According to the official readout from the Prime Minister’s Office, Albanese “reiterated Australia’s call for the immediate entry of aid to meet needs of people of Gaza, a permanent ceasefire, and the release of all hostages”.

Albanese “also reinforced Australia’s commitment to a two state solution because a just and lasting peace depends upon it”. Abbas thanked the PM “for Australia’s economic and humanitarian support. The leaders discussed deepening cooperation across a range of areas, and agreed to meet on the sidelines of the United Nations General Assembly.”

If Albanese made the point directly to Abbas that the Palestinian Authority needed to reform itself to have a role in a future Palestinian state, it was not recorded in the readout. But Albanese did tell a news conference on Thursday, “We as well want to see commitments from the Palestinian Authority, commitments of their governance reforms, of reforms in education, reforms across a whole range of issues”.

Before that conversation, Albanese had sought a call with Israeli Prime Minister Benjamin Netanyahu. As of Thursday, the call had not yet come.

Israeli authorities can be quick to respond to what they see as anti-Israel events in Australia. There was a social media post from the Israeli foreign minister after the bridge march, urging Australians to “wake up”.

On Thursday, Albanese was asked whether he would talk with Trump before he made the decision about Palestinian recognition. “We’re a sovereign government and Australia makes decisions on behalf of the Australian government,” he said.

Incidentally, while there has been speculation that Albanese will catch up with Trump when he is in the US in September, there don’t seem any locked-in plans.

It’s hard to get the president’s time in Washington when so many leaders are knocking on the White House door in September. And there is no guarantee the president will be in New York during the leaders’ week at the UN, or have an opportunity for a meeting if he is. When the prime minister will catch up with the president continues to be a work in progress.

The opposition, which has remained steadfastly signed up to Israel, strongly opposes Palestinian recognition, saying this would be a win for Hamas. But at least some Liberals are readjusting their rhetoric to take more account of the humanitarian disaster in Gaza.

If, or when, Labor recognises a Palestinian state, the opposition would condemn the decision. But what would it say about whether a Coalition government would reverse the decision? That might be one for the convenient line, “we’d look at that when we were in office”.

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Felicity Deane, Queensland University of Technology

Bold economic ideas are flowing ahead of next month’s roundtable convened by the Albanese government, aimed at boosting Australia’s productivity and economy, and repairing the budget. Among the biggest ideas to emerge is: should Australia resurrect its carbon price?

Many respected economists say the answer is a firm yes. Among them are former Treasury secretary Ken Henry, policy expert Rod Sims, and Ross Garnaut, a leading economist and former Labor climate advisor.

Of course, Australia has had this discussion before. In 2012, after much political debate, the carbon price established by Julia Gillard’s minority Labor government began. Two years later, partisan politics had killed it off.

Carbon pricing is clearly the most economically efficient way to tackle climate change, in Australia and around the world. But getting the policy back on the national agenda will take great political courage.

Why are we talking about this now?

Carbon pricing is not new – the theory underpinning it dates back to the early 20th century.

As the theory goes, pollution caused by the production of goods and services imposes a cost on society. If polluting companies don’t cover that cost, society bears it instead.

A carbon price forces industry to emit less by, for example, investing in cleaner technologies or energy efficiency. If a business continues to emit greenhouse gases, it pays a financial penalty.

The policy can take several forms, such as an emissions trading scheme or direct carbon tax.

Under Labor, Australia’s central climate policy is the “safeguard mechanism”, which limits emissions from about 220 of Australia’s most polluting facilities.

One major problem with the policy, however, is that companies can buy carbon credits to reduce their overall emissions – on paper, at least. Carbon credits represent emissions reductions made elsewhere. But carbon credit schemes are plagued by claims they do not lead to real emissions reduction.

And the safeguard mechanism targets only large industrial facilities, when many other parts of the economy contribute substantial greenhouse gas emissions. But a carbon price, depending on its design, can encourage emissions cuts across the economy.

A submission to the government roundtable by the Superpower Institute – the brainchild of Garnaut and Sims – argues a carbon price would neatly address the main economic conundrums Australia is grappling with.

As Garnaut noted in a speech last week, Australia is on a trajectory to miss its renewable energy targets, largely due to insufficient investment. He pointed to the Capacity Investment Scheme, expansion of which the federal government announced last week. The scheme uses taxpayer dollars to underwrite new renewables projects.

Garnaut says the scheme was valuable, but poses a risk to the federal budget. He called on the government to redesign its emissions-reduction strategy around a carbon price, describing it as “the most economically efficient tax reform available to Australia at a time when we need budget repair”.

The comments follow those of former Treasury secretary Ken Henry, who has a coveted seat at the roundtable. Henry last month described the Gillard-era carbon price as “the world’s best carbon policy”, and asked “Why the hell did we ever drop it?”

Among Australia’s best economic minds, momentum for the policy has been building. Indeed, a 2023 survey by the Economic Society of Australia asked 50 leading economists about the best way to reach net-zero emissions. The most popular answer? A carbon price.

The evidence is in

The argument for carbon pricing is backed by academic research.

A study published last year examined 21 carbon pricing schemes and found at least 17 yielded immediate and substantial emission reductions, despite a low carbon price in most instances.

And a large study in 2020 analysed 142 countries over more than two decades. In countries with carbon prices, the average annual growth rate in emissions was about two percentage points lower than countries without one.

The extent of emissions reductions depends on the mechanism and price applied to emissions. Had the Gillard government’s carbon price remained in place, for example, analysis suggests Australia would have saved 72 million tonnes of emissions between 2012 and 2020.

But would a carbon price fix the budget deficit? It’s not a silver bullet. However, it could be part of a reform package that also includes a higher goods and services tax (GST) or a tax on superannuation.

Together, the changes would mean Australia was less dependent on income tax revenue – a tax system that can place a disproportionate burden on young people and future generations.

Carbon pricing can, if not well designed, unfairly impact lower income-earners, by increasing electricity and other costs. But with the right fiscal measures, people in need can be supported through the transition – as occurred under Gillard’s policy.

It’s time to act

Australia is a leading coal exporter – and one of the world’s highest per capita emitters. It will also feel some of the worst effects of climate change.

So we have very good reasons to adopt the best possible emissions reduction policy.

Of course, carbon pricing was a poisoned chalice for the Gillard government, and famously fell victim to partisan politics, as experts predicted.

Ultimately, Labor was defeated in 2013 by the Abbott-led Coalition, which had campaigned to repeal what it branded a “carbon tax”.

But now, Treasurer Jim Chalmers says nothing is ruled in or out of discussion at next month’s roundtable. With many of the nation’s most celebrated economists in the room, the idea of a carbon price is unlikely to be quickly dismissed.

Felicity Deane, Professor of Trade Law and Taxation, Queensland University of Technology

This article is republished from The Conversation under a Creative Commons license. Read the original article.