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Carbon Tax In Australia Starts In July 2012

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

28 February 2011


The Australian Prime Minister Julia Gillard announced this week that the government will be putting a price on Australia’s carbon emissions, starting in July next year. The news was met with strong criticism from the Opposition, particularly taking into account Ms Gillard’s promise during her election campaign that there would be no carbon tax under her government.

In a radio interview on Thursday Tony Abbot, Leader of the Opposition, said: “The Prime Minister gave a solemn pledge before the last election that there would be no carbon tax. Now she says without any intervening election there will be a carbon tax and to the public it looks like a simple lie. She said there wouldn’t be one before the election, now she says it won’t hurt you. I mean, the one certainty is a) that Labor lies and b) that people pay and I just think that’s not on”.

In her statement the Prime Minister outlined the plan to cut pollution, tackle climate change and deliver the economic reform she said Australia needs to move to a clean energy future, stressing: “This is an essential economic reform, and it is the right thing to do”.

The two-stage plan for a carbon price mechanism will start with a fixed price period for three to five years before transitioning to an emissions trading scheme. The government will propose that the carbon price commences on July 1, 2012, subject to the ability to negotiate agreement with a majority in both houses of Parliament and pass legislation this year.

Gillard said: “A carbon price is a price on pollution. It is the cheapest and fairest way to cut pollution and build a clean energy economy. The best way to stop businesses polluting and get them to invest in clean energy is to charge them when they pollute. The businesses with the highest levels of pollution will have a very strong incentive to reduce their pollution.

“The government will then use every cent raised to assist families with household bills, help businesses make the transition to a clean energy economy and tackle climate change. The government will not shy away from this difficult but vital economic reform to move Australia to a clean energy nation."

“The global economy is shifting. Right now, Australia is at risk of falling behind the rest of the world. The longer we wait, the greater the cost to the economy, and the greater the cost to Australian jobs.”

”An initial fixed carbon price will provide businesses with a stable and predictable platform to transition to a ‘cap and trade’ emissions trading scheme that will be linked to international carbon markets. This will give businesses time to understand their carbon liability and begin the transformation in a steady and purposeful way.”

Gillard has not said how much carbon will cost and has not confirmed whether petrol would be included in the tax.

Opposition environment spokesman Greg Hunt has estimated that the scheme would add AUD300 (USD300) a year to power bills and six cents a litre to petrol, and a statement from the Liberals said: “On top of paying more for electricity, gas and food, now we learn that households will be hit by the carbon tax at the bowser. It's about time Ms Gillard was upfront with motorists and told them that she will make them pay every time they fill up their car."

“The Prime Minister should rule out a petrol tax and have the courage to say that her carbon tax is a carbon tax and that it will drive up electricity prices. Ultimately the government has no mandate for this sneaky new tax, and there is a better way to tackle climate change than through a new tax”.

TAGS: environment | tax | business | Australia | legislation | carbon tax | trade

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