International and domestic investors in Australia are being told there is only a one-in-three chance that Opposition Leader Tony Abbott will be able to fulfil his "pledge in blood" to dump the carbon tax.
In a briefing note sent to clients yesterday, Bloomberg Finance said the Government had built a secure "Abbott-proof fence" around its carbon tax legislation.
Bloomberg said the coalition could repeal the Clean Energy Act if it won a Senate majority in the September election, or if Mr Abbott retained sufficient political capital to risk taking his axe-the-tax pledge to a double dissolution election in two years.
But it told investors that neither scenario was particularly likely. Bloomberg said the probability the coalition would be able to repeal the carbon tax was 32 per cent, even though it rated the likelihood of an Abbott victory at 72 per cent.
"In our view, the likely result is a new coalition government which finds a way to live with the carbon price," its report said.
"Ultimately, however, Abbott's strong rhetoric leaves him with few options, and it may be a case of everything or bust."
Should he win the September 14 election, Mr Abbott's first parliamentary manoeuvre would be introducing legislation to repeal the Clean Energy Act.
Although this would quickly pass the House of Representatives, it would not pass the current Senate unless the Labor Party abandoned the policy.
On Sydney radio last week, Mr Abbott said he expected Labor to surrender its support for pricing carbon under the threat of a double dissolution election. "I don't think a defeated Labor Party will stick with its support for the carbon tax, the mining tax and all the other things that they've done which have contributed to the toxic cloud that's enveloping them," Mr Abbott said.
"I don't think they will for a second stick with this, because politicians hate to lose and they hate to lose twice on the same error. But look, if they persist in folly, if they persist in defying what would be a clear mandate, obviously the government has got to get on with the job and we would use the constitutional provisions that are there."
Senators elected in the September 14 election would not take their seats until July 1 next year, meaning Mr Abbott would be unlikely to secure a double dissolution until late 2014 or early 2015.