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Abbott Loses Senate Carbon Tax Vote

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

06 March 2014


Prime Minister Tony Abbott's plan to scrap Australia's carbon tax regime took a hit this week after the Senate failed to pass legislation to dismantle the independent Climate Change Authority.

The bill was defeated on its second reading by 38 votes to 32, thanks to a combined effort from the opposition Labor and Green parties. It had been stuck in the Senate since December.

The Coalition Government, which won September's general election with a pledge to axe the controversial levy, had drawn up a repeal package that would remove the carbon levy and end the carbon tax on fuels used in shipping, rail and air transport, and on synthetic greenhouse gases. It also intended to abolish the Climate Change Authority, as part of a drive to cut the bureaucracy associated with the carbon regime.

The Authority provides expert advice on climate change mitigation initiatives. It has recommended that Australia target a minimum reduction of 15 percent in greenhouse gas emissions – compared with 2000 levels – by 2020. Australia is presently committed to a minimum 5 percent reduction.

Christine Milne, leader of the Green party in the Senate, welcomed the victory. She said: "The Greens, with the balance of power in the Senate, saved the Climate Change Authority … because we know it's more important than ever that Australia doesn't succumb to inaction on climate change ... Australians are already suffering through the reality of devastating bushfires, scorching heatwaves and crippling drought, and the science says we need to take action to stop temperatures rising further."

Abbott, on the other hand, has sought to present repeal as a common sense, pro-business initiative. He has even waded into the growing political row over how best to help struggling airline Qantas.

Speaking in the House of Representatives, Abbott said he wanted parliament to work on behalf of Qantas, and claimed that this could best be done by removing the carbon tax. He described the levy as a AUD100m (USD89.2m) hit on the carrier and its staff, and frequently referred to it as Qantas' "shackles."

Abbott pointed out that Qantas paid AUD106m in carbon tax during the last financial year, while Virgin's carbon tax bill hit AUD50m. "The best thing this parliament can do for the airline industry right now is axe the tax," he urged.

Milne has since hit back at Abbott, arguing that "it is shameful that the Abbott Government is using Qantas' problems to campaign against the price on the pollution."

TAGS: environment | tax | business | tax incentives | aviation | Australia | environmental tax | legislation | carbon tax | revenue statistics | tax reform

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