| SYDNEY, July 14
SYDNEY, July 14 It took mining magnate Clive
Palmer only three days to show Australian Prime Minister Tony
Abbott just how uncomfortable life can be in a parliament in
which he holds the balance of power.
The neophyte Palmer United Party (PUP), set up by the
eccentric billionaire little more than a year ago, on Thursday
blocked the repeal of Australia's controversial carbon tax just
hours after Abbott publicly said it would pass that day.
While the repeal is likely to succeed in an amended form
when it comes back to a vote this week, the fact that it needed
Palmer's imprimatur illustrates how much power he has amassed -
and his willingness to use it.
The four senate seats Palmer controls give him a de facto
veto over a raft of major legislation set to be considered this
parliamentary term - which began in the upper house last week -
including the repeal of a separate mining tax, as well as
healthcare, pension and education reform.
That could prove a major headache for Abbott's conservative
government, which was swept to power in an election last
September on a pro-business platform of tax and spending cuts,
and adds an unwelcome element of uncertainty for investors.
None of that seemed to be bothering Palmer, who sports a mop
of white hair and a ruddy complexion, during a recent interview
at his Palmer Coolum Resort, a bizarre sub-tropical oasis dotted
with dozens of towering motorized replica dinosaurs.
"Al Gore, when he went to Canberra, didn't see the prime
minister, he didn't see the leader of the opposition, he didn't
see the House of Representatives or the Senate," Palmer said.
"He came to my office."
Palmer, who has always opposed the carbon tax, shocked the
nation last month when he stood alongside former U.S. Vice
President Gore, a leading climate change campaigner, to announce
that he would only support its repeal with serious caveats.
But the erratic streak that made him easy to dismiss when he
was just a colourful coal baron pledging hundreds of millions to
build a scale replica of the Titanic, is fast becoming a concern
as he plays kingmaker for an economy facing headwinds from the
end of its long resource boom.
Nathan Fabian, CEO of the Investor Group on Climate Change,
which represents investors with total funds under management of
around A$1 trillion ($938.80 billion), said that the uncertainty
Palmer cast over climate legislation was spooking investors.
"They see a void, and that makes it harder to price risk
and, of course, that's not what markets like," he told Reuters.
AN "UNPREDICTABLE" PARLIAMENT
Abbott won a decisive majority in the lower house over the
centre-left Labor Party, but needs support from six of the eight
so-called "micro party" senators to overcome opposition in the
The Senate, which is elected via a complicated preferential
voting system, has long harboured fringe candidates who held out
for support on pet projects. But they rarely voted in a bloc
like the PUP, which has been able to leverage its handful of
votes into outsized authority.
Both the upper and lower houses of Parliament can propose
legislation in Australia and all bills must be approved in both
houses to become law, but only the house of representatives can
propose spending bills.
Senator Christine Milne, who leads the Greens Party, told
Reuters that the peculiar make-up of this Senate was wilder than
anything she had seen in her 25 years in politics.
"It will be an unpredictable parliament," she said.
Palmer, who won a seat in the directly elected lower house
in September's election, has long cultivated an image as a
"larrikin" - a kind of impish anti-hero who acts out a mistrust
of authority rooted deep in Australia's national character.
He has, for example, lambasted the CIA for supposedly
colluding with the Greens to destroy the Australian economy and
accused Rupert Murdoch's then-wife Wendi Deng of being a Chinese
But none of that has stopped him being taken seriously at
home and in Washington, where he is the director of the John F.
Kennedy Library Foundation and enjoys close personal ties to the
Indeed the nickel and coal mining billionaire seems to draw
special inspiration from the United States and its leaders,
comparing himself to both George Washington and Abraham Lincoln
in just the first minute of his interview with Reuters.
A GAME OF RISK
Palmer's decision to support the carbon tax only with major
concessions, although welcomed by some investors, reflected just
how much uncertainty his shifting positions had injected into
the long-term outlook on carbon pricing.
"There are billions of dollars sitting on the sidelines,"
Milne, the Greens leader, told Reuters. "Multi-national
companies and local companies are ready to invest but they are
not doing so because they don't have confidence."
Beyond the carbon tax itself, which is likely to be repealed
without key elements such as scrapping the A$10 billion Clean
Energy Finance Corporation or changes to Australia's Renewable
Energy Target commitments, that uncertainty could spread to
those other aspects of the budget that are likely to be held up
by the PUP.
Palmer has struck a populist tone in decrying efforts to
deregulate higher education, the introduction of American-style
fees for service healthcare and changes to the pension system
that were at the centre of the budget unveiled in May.
The worst-case scenario would be for Abbott to call a
"double-dissolution" election, a sort of parliamentary nuclear
option rarely used in Australia that allows for snap elections
for all the seats in both houses to break an impasse.
Abbott has alluded to that possibility in recent weeks as
Palmer has continued to chip away at his agenda, although he
seems to be backing away from the tactic amid a slump in his
For Palmer, the very idea that he was creating uncertainty
and that investors might be deterred as a result was too
ridiculous to consider.
"It might have been good to invest in Hitler's Germany, on
that basis, you know? It might have been good to invest in
Stalin's Russia," he told Reuters. "You would have had certainty
in those conditions, but we say that in the long term those
types of regimes come down."
($1 = 1.0652 Australian Dollars)
(Reporting by Matt Siegel; Editing by Alex Richardson)