Australian Carbon Tax Bill Introduced

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

15 September 2011

After months of controversy Julia Gillard, the Australian Prime Minister, has finally introduced the carbon tax bill into parliament.

The legislation is due to come into effect from July 1, 2012 and while the Opposition coalition will not be supporting the bill, it is expected to pass through the Senate with the support of the Greens and independents.

Gillard said: “We have now had decades of heated public argument and political opinion. Alongside decades of enlightened scientific research and economic analysis. After all those opinions have been expressed, most Australians now agree our climate is changing, this is caused by carbon pollution, this has harmful effects on our environment and on the economy, and the government should act.”

“And after all that analysis has been done, most economists and experts also now agree the best way is to make polluters pay by putting a price on carbon. So that is the policy of the government I lead.”

The levy will be set at AUD23 (USD24.5) per tonne of pollution. This is to rise by 2.5% a year in real terms during a three-year fixed price period until July 1, 2015. The carbon price mechanism will then transition to an emissions trading scheme where the price will be determined by the market.

Around 500 businesses will be required to pay for their pollution under the carbon pricing mechanism, with more than half of this revenue used to assist households with tax cuts, increased family payments and higher pensions, benefits and allowances. Carbon price revenue will also be used to support jobs and to invest in clean energy and climate change programs.

Gillard was keen to point out that the government has taken this opportunity for tax reform.

“We’ve more than tripled the tax free threshold. Combined with other changes, this means that 450,000 people – who earn between AUD16,000 and AUD20,500 – will have all their tax cut. They will now pay no tax.”

“Today we move from words to deeds. This Parliament is going to get this done. There will be a price on carbon from 1 July, 2012,” the Prime Minister said.

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