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New Australian Opposition Leader Ends Support For ETS

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

04 December 2009


Tony Abbott, the Liberal Party’s new Leader of the Opposition, has ditched an agreement with the Australian government on the country’s emissions trading scheme (ETS), leading to its rejection by the Senate on December 2.

The Australian government’s ETS was first defeated in the Senate in August this year.

Had it been accepted, the government would have introduced an Australian emissions unit auction charge, the cost of which would have been established in the first half of 2010 through an auction mechanism. Businesses emitting greenhouse gases would have needed to purchase a permit based on that charge for the volume of gases each produced.

The scheme, scheduled to start on July 1, 2010, had aimed to reduce Australia’s carbon emissions by at least 5% by 2020 (using 2000 as the base year). The government also had an upper target of a 25% reduction, if the climate change conference in Copenhagen in December were to decide on tougher emission cuts.

The Australian government appeared to have reached an agreement with the Liberal Party opposition’s former leader, Malcolm Turnbull, for the ETS’ approval when re-presented in the Senate, subject to additional compensation for industries affected by it.

However, that agreement was for nothing when the Liberal party narrowly voted against Malcolm Turnbull, and installed Tony Abbott as its leader.

At a press conference following his election, Tony Abbott argued that the ETS legislation "which is really an energy taxation scheme, does deserve the most rigorous scrutiny by this parliament".

He reportedly continued: "This is an AUD120bn (USD111bn) tax on the Australian public and that is just for starters. As we heard from the independent pricing regulator in New South Wales just yesterday, this ETS will add 30% to the people of New South Wales’ power bills.”

He confirmed that the Liberal Party would oppose the legislation in the Senate, reiterating that the government’s ETS looked to him “like a great big tax”. Subsequently, on December 2, the legislation was rejected again for a second time.

Following that defeat, the government will, obviously, not have an approved scheme in its hands when it goes to the December climate change conference. It did, however, confirm that it would, “on the first sitting day next year in February, re-introduce into parliament the carbon pollution reduction scheme. The bill introduced will be inclusive of the amendments agreed to such a short time ago by the Liberal party”.

Tony Abbott has confirmed that he believes in climate change and agrees with the previously-agreed carbon emissions reduction targets. He has not disclosed what measures he proposes to reach them, except that it would not be anything resembling a carbon tax.

There has been some talk of increasing nuclear power, the subsidised phase-out of coal-fired plants and better land management.

He has, however, been quoted as saying that there would unlikely to be the right moment to install an ETS in Australia, unless it was introduced first in the US and then became part of a global system.


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