Australia Will Examine A Carbon Tax

by Mary Swire, Tax-News.com,Hong Kong

24 September 2010

Australia’s Climate Change Minister, Greg Combet, during a television interview, has indicated that the new Labor government will consider all options to reduce the country’s greenhouse gas emissions, including the carbon tax that the previous Labor government had rejected.

The previous government, in the person of the then Labor Party Prime Minister, Kevin Rudd, announced in April this year that it had postponed the previously-proposed emissions trading scheme until at least 2012. Before the election last month, Julia Gillard, the current Prime Minister, ruled out a carbon tax and announced that there would be a 12-month consultation process to examine the evidence on climate change and the policy choices available.

However, Combet has now said, in an interview with ABC News, that the government and a parliamentary climate change committee will look at all possible options. He said that, in the new political situation in which the minority government finds itself, all “alternative policy options” to establish a “carbon price” will be examined by experts and thoroughly modelled and evaluated.

The Greens party, whose support will be essential to the government in the Senate from next year, has previously advocated an immediate carbon tax, while Marius Kloppers, the chief executive of BHP Billiton, recently promoted a combination of measures to counteract climate change in Australia, including the introduction of a tax.

During the election campaign, the Liberal Party opposition leader, Tony Abbott, confirmed that, as far as he was concerned, a Coalition government led by him would never introduce a carbon tax, and that he would not revisit the Coalition’s climate change policy before 2015.

He considers the current shift in the government’s stance away from Gillard’s previous rejection of a carbon tax, as wholly the product of a deal that Labor has had to make with the Greens.

The Australian Chamber of Commerce and Industry has also weighed into the debate against a carbon tax, saying that “there are very few energy users or end consumers who have joined the cheer squad to pay higher energy prices”. It calculates that, “for typical energy users, the combined impact of increased network charges, emission taxes and other mitigation policies could more than double electricity prices by 2015 and potentially triple them by 2020.”

In addition, it added, “much of Australian business faces the stiff wind of international competition and not just those directly exporting but also manufacturers and service providers who compete against imports. These businesses will have less capacity to pass on the impact of higher energy costs and their competitiveness will be affected.”

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