Even businesses supportive of the carbon tax in principle are beginning to tremble at the prospect. At the government’s set rate of $23 per tonne, it is way above anything else anywhere in the world, and will send Australia’s economy into a tailspin at a time of global financial uncertainty.
KEY business backers of carbon pricing have called on the government to amend the carbon tax legislation to cut the price from $23 a tonne of carbon emissions to close to the European price of about $10, warning that the difference amounts to a “tax on industry” and will hit competitiveness.
The outgoing head of the Australian Industry Group, Heather Ridout, who this week took up her seat on the Reserve Bank board, warned that industries slugged by the high dollar could “ill afford” to pay the $23 a tonne slated to take effect from July 1, when other international prices were less than half that.
She said the gap between the legislated Australian price and international prices represented “a tax on industry, and I think it’s not what it was meant to be”.
Business Council of Australia chief executive Jennifer Westacott called for the $23 a tonne price to be scrapped, and the price set at $10.
“It is clear there is a substantial gap between the international permit price and the starting price in our fixed-price period, and this is a concern for the competitiveness of Australia’s industries and the impact this might have on our economy,” she said.
The two comments came after economists Judith Sloan and Warwick McKibbin called this week for the government to lower the rate of the carbon tax.
“A figure of $10 a tonne would be closer to the mark,” Professor Sloan wrote in The Australian on Tuesday.
Her comments were echoed by Professor McKibbin, a former Reserve Bank board member, who said: “It is in Australia’s national interest to have the price of carbon on July 1 this year starting at closer to $10 per tonne.”
So as this is a sensible, responsible government, they will no doubt take the concerns of business into account? Er, not a chance:
Wayne Swan, asked yesterday whether the government would reopen the carbon package after Professor McKibbin’s call for a $10-a-tonne price, said: “No.”
Yes, the government continually insists on signing its own death warrant – over and over again.
Read it here.