With
the Australian carbon tax set to enter force on 1 July, debate between the
country’s major political parties over the measure has continued unabated, with
the opposition pledging to repeal the measure should it win the next election.
The
Clean Energy Agreement - which passed narrowly through Australia’s legislature
last fall - will impose a carbon tax of A$23 per tonne
of carbon emitted on the country’s 500 largest polluters, many of whom produce
energy, heavy goods, and metals. The tax will be increased by 2.5 percent
annually over three years until 2015, at which point an emissions trading
scheme will replace it.
The
measure is aimed at cutting 160 million tonnes of carbon by 2020, as part of
the government’s plan to curb carbon emissions by five percent of 2000 levels
by 2020. Supporters expect the scheme to spur multi-billion dollar investments
in new and cleaner energy sources.
Post-election repeal?
Though
the carbon tax is now officially law, retailers, coal and construction
industries, and opposition parliamentarians have continued to fight against the
tax, on the grounds that the scheme could lead to coal mine closures, job
losses, and increased costs of living. Many argue that the “trickle down”
effect will compound the cost of goods and inputs throughout the Australian
supply chain, and ultimately be passed down to the general public.
Gillard
has attempted to assuage these concerns, with her government pledging A$7 billion in tax cuts and assistance to eight million
households to offset these costs. In the month before the tax kicks into
effect, more than A$1 billion has been paid to
families, pensioners, and students.
The
Gillard government has also offered an A$1.3 billion compensation package to
help the most polluting coal mines adapt to the new policy. The coal industry,
which earned A$46 billion in export earnings in 2010,
is Australia’s largest export industry and is expected to be one of the hardest
hit by the measure.
However,
opposition party leader Tony Abbott has repeatedly said that he will repeal the
tax should he replace Prime Minister Julia Gillard in the 2013 federal
election.
Gillard
and Abbott have been jockeying for position in the polls for months, with the
latest figures giving the current prime minister a four percentage point
advantage against her opponent. The 42-38 margin is the largest she has had
against Abbott since December.
However,
Gillard has questioned such claims, telling reporters that should Abbott win
office, he “[will say it's] all too difficult… it’s all too hard, I can’t do it
now.” The Prime Minister has said that she is confident that the “noise and
fear” will subside once the measure is implemented in July.