Australian Greens Push Carbon Tax

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

14 April 2010

The Australian Greens have written to Prime Minister Rudd requesting that parliamentary debate on their proposal for a temporary carbon tax be scheduled as soon as possible, so that Australian regulations on carbon emissions can be passed by the middle of this year.

The situation in Australia on climate change policy is that, although it is agreed that Australia’s carbon emissions should be reduced by at least 5% by 2020 (using 2000 as the base year), there is disagreement between the government and the opposition on the means by which this should be achieved. In February, the Australian government’s proposed emissions trading scheme (ETS) was delayed further when the Senate decided to postpone any debate on it.

In January, the Greens had put forward a proposal that a two-year carbon price be implemented as an interim measure, in the transition to an ETS. It was confirmed that, shortly afterwards, preliminary negotiations had commenced between the government and the Greens.

The Greens' proposal would include utilizing the government's ETS monitoring and compliance structure to introduce a carbon levy of AUD20 (USD18.50) a tonne, increasing at a rate of inflation plus 4% each year. The resultant AUD10bn of annual revenue would then be used to support household, commercial, industrial and transport emissions reductions. As the original start date of July 1, 2010 is now considered unviable, the proposal has been amended to start on January 1, 2011.

The Greens are emphasising that, given the strong public support for their proposal, as well as strong support from the environment movement, including groups which backed the government's ETS last year, it makes good sense for the government to deliver this important reform before this year's election.

“It is very encouraging to see such strong support for our proposal to get Australia moving on climate action,” the leader of the Australian Greens, Bob Brown, said. “This levy is a building block for stronger future action. The government and other senators have already been considering it, but it is time for it getting the go-ahead.”

“The beauty of this interim proposal is that it sends investors the beginnings of the signal they need, makes sure they know the price will rise into the future, and paves the way for much stronger action,” its deputy leader, Christine Milne added. “This levy will give certainty to increasingly impatient investors, will direct billions of dollars to Australia's householders and free up more billions to invest in climate solutions.”

“If we move immediately with a low carbon levy,” she continued, “we can then discuss the longer term solutions Australia will need over the coming years, secure in the knowledge that a carbon price is in place.”

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