Consumer Policy, the Carbon Tax, and selling Consumption Reduction
Under Julia Gillard, the ALP federal government has missed an important opportunity to sell the benefits of consumption reduction alongside its Carbon Tax (Clean Energy legislation). The government continues to get caught up in debates about compensation and tax cuts to offset price rises caused by putting a price on carbon. Yet, over-consumption — a direct consequence of a historical mass consumption agenda — is at the heart of the problem. The current consumer policy framework, as it has been historically structured, is largely unequipped to consider issues that extend beyond individual consumer participation. Governments, consumers, and the business sector are so caught up in prioritising choice and promoting acquisition that other, often more important, issues — like dealing with climate change — do not get examined.
Where Canberra’s Clean Energy Future plan focuses on encouraging individuals to use less energy to offset price rises — ‘by using energy more efficiently households can reduce their bills’ — its aim is to save money first, resources second.
Why, then, has the government not pursued the path of sustainable or ethical consumption for individual consumers? Put simply, frugality, austerity, and thrift are not easy politically. Following the Second World War, governments across the western world pursued the twin goal of mass production and consumption to ensure prosperity and full employment. Most citizens enjoyed the (economic) benefits offered by a life based on material acquisition. Individual choice is the catch-cry of the market, with consumer freedom to choose equated with democratic freedoms. Australians, like their American counterparts, view austerity negatively as a restriction of rights.
The Carbon Tax, of course, is not the only government initiative that has prioritised material acquisition.
It is within this context that the Rudd Labor Government introduced its Economic Stimulus Package during the Global Financial Crisis (GFC) in 2009. Instead of calling on citizens to exercise economic restraint to save rather than spend to weather the economic storm, the Rudd Government sent us out to spend as if our (economic) life depended on it. This measure was largely successful in economic terms.
It initiated stimulus spending to avoid economic recession and a potential economic depression with a $42b Economic Stimulus Plan. Success of the government’s Stimulus Package reinforced the message of consumption and its importance in creating economic wellbeing.
Despite significant spending on infrastructure and education, a major part of the package ($12.2b) was in the form of ‘bonus payments’ to encourage individual consumer purchases. The message was explicit: good citizens should not spend the money paying off debt and they certainly should not save it. The good citizen was not to tighten his/her belt and exercise thrift in a time of economic hardship; the good citizen would go forth and spend. And spend we did!
Whatever the root causes of Australia’s successful negotiation of the GFC, Labor’s actions reinforced that consumption is a democratic duty and that a good citizen is a good consumer (and vice versa). This circularity of argument presents a paradox for those charged with addressing the problems and consequences associated with over-consumption — waste, environmental damage, global warming, climate change, etc. Whose responsibility is it to deal with these problems and how can these two aspects be reconciled? That is, if they can be reconciled at all. It is worth investigating possible alternatives.
Labor’s intervention contained significant incentives encouraging individual consumption. But the message of spend, spend, spend, as if the prosperity of the country depends upon it, was as problematic as it was compelling. This narrow definition of citizenship — good citizen as good consumer — has wider ramifications for a healthy democracy (one that is unable to meet challenges and spread rewards widely and evenly).
While the plan included spending on what can be labelled as environmentally sustainable initiatives (including rebates for energy efficiency as well as the ill-fated and highly controversial housing insulation program), individual consumers were not encouraged to spend their individual bonus payments in environmentally sustainable or ‘ethical’ ways. In so doing, the federal government missed an important to better sell the environmental sustainability message. One wonders what part this message has played in negative responses to the Gillard Government’s Carbon Tax. A Morgan Poll (June 2011) found that a clear majority (53%) of Australian voters opposed the Carbon Tax while only 37% supported it (10% were undecided).
There are suggestions from environmentalists and economists such as Ross Garnaut that consumers will be able to offset price rises, which may occur as a consequence of the Carbon Tax, and even save money by buying less. This message, however, was not articulated by the government and certainly not suggested by Climate Sceptics and other fringe political interests.
Despite the overwhelming enthusiasm towards consumption that has grown exponentially since the end of the Second World War, there is strong evidence to suggest that Australians want both economic stability and security and serious action on environmental issues. In a poll conducted by Roy Morgan Research in mid-December 2010, Australians considered economic issues (28%) and environmental issues (20%) the biggest issues facing Australia. In terms of world issues, Australians in higher numbers (32% and 26% respectively) considered the same issues the most serious problems confronting the international community. Most significantly, 17% of Australians regarded climate change/global warming as the most important problem facing the world. But contradictory messages are precisely what are being sold to consumers.
Governments, for fear of being criticised of reining in rights, have been reluctant to rein in consumption. But the benefits for the environment of moderate consumption levels are obvious. We have to be careful, however, that we are not merely offered superficial alternatives. We need substantial and permanent change as well as changing light globes, installing water tanks and solar panels, and using E10 petrol. We need to use less power, water and petrol in toto.
The Gillard Government, in selling the Carbon Tax, also needed to stridently sell the benefits of reducing consumption per se. Instead, it merely deflected attacks from conservative quarters that reducing consumption would negatively impact on the community and individual standards of living.
The carbon price and current economic instability offers the opportunity to reassess the rights and the responsibilities of individual consumption. Low prices should not be the primary criterion driving buying decisions. In order for sustainable consumption to be achieved overall, consumption levels must be reduced.
Dr Amanda McLeod is a writer and historian with specific interest in consumer and commercial life. She writes widely on consumerism and is an Adjunct Research Fellow in History at Monash University.
© APH Network and contributors 2013. All rights reserved.
Citation: Amanda McLeod, Consumer Policy, the Carbon Tax, and selling Consumption Reduction. Australian Policy and History. March 2013.