Australian Prime Minister Locks In Death Of Carbon Tax
Tony Abbott has flagged retrospective legislation to backdate the abolition of the carbon tax to July 1 next year if parliament delays his repeal bills and threatened businesses with fines of up to $1.1 million if they fail to pass on price cuts flowing through from scrapping the tax.
The Prime Minister and Environment Minister Greg Hunt yesterday released draft legislation detailing the abolition of the carbon tax, which will be the first order of business when parliament resumes on November 12. Mr Abbott said he hoped the Senate would vote on the bills before Christmas and declared they would give Labor a chance to “repent of its massive breach of faith with the Australian people in the last parliament”.
Asked about Labor’s vow to block the repeal of a carbon price, Mr Abbott said he was confident public pressure on the opposition not to defy “the mandate of the Australian people at the election” would be “irresistible”.
If the bills are not passed by July 1, and the government is forced to wait for the new Senate, the carbon tax repeal bills will apply retrospectively to that date.
The Prime Minister said the abolition of the carbon tax would leave households $550 a year better off.
The government estimated that power prices would go down by 9 per cent and gas prices would go down by 7 per cent, making the average power bill $200 a year lower and the average gas bill $70 a year lower.
Mr Abbott rejected demands by billionaire Clive Palmer, who is disputing a $6.2m carbon tax liability, that all carbon tax receipts be refunded.
He said businesses would be obliged to pay the tax until it was abolished, warning that people needed “to meet their obligations under tax law and that’s true under the existing carbon tax law”.
Bill Shorten has said Labor continues to support a carbon price and would not support the repeal.
Mr Abbott said the Opposition Leader was a “political pragmatist” and a “political survivor” and he believed Labor would learn the lesson that it could not defy the public’s view.
He said the repeal of the carbon tax represented a major contribution to the government’s deregulation agenda by removing about 440 pages of legislation and reducing business compliance costs by about $100m a year.
The Australian Competition and Consumer Commission will have new powers to monitor prices and take action against businesses that charge unreasonably high prices or make false or misleading claims about the effect of the carbon tax repeal on prices.
Maximum penalties for price exploitation will be set at $1.1m for corporations and $220,000 for an individual. Under the repeal legislation, business compensation schemes associated with the carbon tax will be scrapped from July 1 next year and the Climate Change Authority will be abolished.
The first round of personal income tax cuts that started from July 1 last year will be maintained but a second round, which had been included in Labor’s original carbon tax package, would be scrapped.
Labor had already deferred the tax cuts because of the drop in the price of European Union carbon permits.
The repeal package will axe the carbon tax on fuels used in shipping, rail and air transport and on synthetic greenhouse gases.
The opposition’s acting climate change spokesman, Mark Butler, said Labor had long supported a market-based mechanism with a legal limit on carbon pollution via an emissions trading scheme.
“This is the model in place or being introduced across the world from Germany and Britain to California, China and Japan,” Mr Butler said.
“Labor said clearly during the election campaign that we intended to terminate the carbon tax and move quickly to an (emissions trading scheme). The Coalition instead will throw the baby out with the bath water, and leave Australia with no credible policy on climate change. While the rest of the world is moving forward on combating climate change, Tony Abbott is trying to take Australia backwards.
“Labor stands by its election commitment to support the termination of the carbon tax provided that a market-based mechanism that reduces carbon pollution is put in its place, along with a strong commitment to expanding renewable energy.”
Mr Butler said the government’s proposed Direct Action scheme would require spending of $4bn-$15bn more than what it had currently promised to spend.
Greens deputy leader Adam Bandt branded Mr Abbott a “climate change criminal” and said his party, which holds the balance of power in the upper house until June 30 next year, would fight against the repeal legislation.
Australian Chamber of Commerce and Industry senior economist, Burchell Wilson, said it was “very encouraging to see the government progressing its agenda so soon after formulating cabinet responsibilities”.
He said the abolition of the carbon tax was a priority for the business community and the policy had been a factor behind an upswing in business sentiment leading up to the election.
Australian Retail Association executive director Russell Zimmerman said the ARA had “long campaigned against this business-damaging and economy-wrecking tax and we are glad to see the government moving quickly to remove it”.