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The Last Carbon Taxer
Carbon cap and trade is dead in America, the Chicago emissions trading exchange has folded, and European nations keep fudging on their Kyoto Protocol promises. But Al Gore's great green hope still has a champion: Australian Prime Minister Julia Gillard, who announced last week that her government will impose a cap-and-tax regime.
Her Labor Party-led coalition wants 500 of the country's "biggest polluters" to buy carbon permits issued by the government, starting next year. Canberra would then create new bureaucracies to re-allocate that money to interest groups and selected businesses, to the tune of billions of dollars annually.
The news has caused a public uproar—not least because Ms. Gillard ran and won last year on an explicit promise not to pursue such policies. She ousted her predecessor in a backroom coup after his popularity tanked because of climate-change boosterism and promises to raise taxes. But Ms. Gillard's Green coalition partners hold the balance of power in parliament and pushed hard for cap and trade. The PM caved and has now been labeled "Juliar" in the popular press.
The Gillard government estimates its plan will increase electricity costs by 10% and gasoline by 9%—increases it calls "modest." That's easy for politicians to say. In a nationwide poll taken after the announcement, 60% of voters opposed the tax and 68% said they'd be financially worse off because of it. Ms. Gillard's popularity has plumbed new lows.
Bloomberg News
Julia Gillard
The plan is economically damaging enough that even the normally timid business lobby—many of whose members originally supported climate-change legislation—is speaking up. Opposition leader Tony Abbott slammed the plan as "socialism masquerading as environmentalism," and he has a point. The government plans to use some of the carbon tax receipts to triple the income threshold before the income tax hits. In other words, this is in part a scheme to redistribute income from energy users to Labor voters. It is an odd kind of tax reform that narrows the tax base.
All of this for negligible environmental benefits. Australia emits 1.5% of the world's greenhouse gases. Even if the country cut its emissions to zero, the move would do little to reduce global emissions. Australia's per-capita emissions are high compared to other developed nations because it's a sparsely populated continent blessed with an abundance of natural resources. Aussies have developed profitable, world-class natural resource and energy businesses that have lifted incomes at home and helped supply developing countries like China and India. This is bad?
It is if you believe in the theology that loathes carbon fuels and wants government to allocate the means of power production. In a speech Thursday, Ms. Gillard vowed to press forward with cap and tax and said that her convictions are "very deeply held." We'll see if her government can survive them.
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Cathy Jensen wrote:
"The Gillard government estimates its plan will increase electricity costs by 10% and gasoline by 9%" - where did these figures come from? Petrol is going to be exempt from the tax I thought. And isn't Barrack Obama still president in the U.S? Because I remember him being committed to a price on carbon. You can google it but there are other countries with a price on carbon, including India. This article, while claiming the carbon tax will be economically damaging to Australia, fails to assess or even mention the oppositions 'direct action' policy, which economists say will cost even more to implement. This is pretty shoddy and biased reporting.
chris schneider replied:
I find it interesting you complain about inaccuracy the totally miss quote another scheme to point out the inaccuracy. Although India are implementing a Carbon trading scheme as it stands today they have not. Nor will they be putting a price on carbon. Their scheme is much more pragmatic and well thought out. This scheme is being used to encourage more efficient used of CO2 emitting plants. This is a true carbon trade scheme which will be implemented once
a) They know the amount of CO2
b) They know the impact of the scheme
c) They have a fully mature plan
NONE of which the Gillard government has. This is another example of a government who shoots first and asks questions later. They have been responsible for:
a) KILLING people with the pathetic implementation of the insulation scheme.
b) Decimating industries with their knee jerk reaction to a animal cruelty video.
c) Wasting money bulldozing buildings which were in perfect working order only to replace them with a building that cost twice as much and was half the size.
d) Forcing a Prime minister to fall on someone else's sword to be replaced by someone who could be better manipulated by power brokers from the unions.
Do I need to go on?
How a country with such a pathetic government has some how managed to not get a full hit of the GFC can only be attributed to the industries the government are now wanting to shut down! It's going to be a worrying time.
Scott van Trienen replied:
Sorry Cathy, but you are missing the point. The main issue is that Ms. Gillard went to the last election promising that "there will be no carbon tax under the government that I lead". This was supported by the treasurer, Mr. Wayne Swan who stated "a carbon tax is a hysterically inaccurate claim made by the opposition". The people of Australia walked into the polling both that Saturday and cast their vote with that information top of mind. As it turned out, there was a massive swing against the Gillard government anyway and Australia was left with a hung parliament. Following this, Ms. Gillard formed government with the help of three independents and one member from the Australian Greens party, which is a minority government, but a government none the less and is led by Prime Minister Gillard. Since then though, Ms. Gillard has claimed that a "situation change" has forced her to "walk away" from that commitment and by this she is inferring the unforeseen coalition with the Greens.
The issue for Australians is that by on large, they feel as though they have been misled. The issue for the Prime Minister is that she has lost her integrity which is currently being compounded by an expensive advertising campaign promoting a scheme which, as yet, not been legislated and as so, is basically promoting ideology and is in direct conflict with her own policy that was drawn up by the former PM (now foreign minister) Mr. Rudd in response the previous (conservative) Howard government's Industrial relations reform advertising campaign. The only difference was that 'Work Choices' as it was known, was legislated at the time.
The current opposition leader, Mr. Abbott has proposed the direct action model but this is purely as a point of difference to diffuse the 'climate change denier' tag. It is felt that his commitment to such a scheme would dependent on global action and could be described as tenuous at best.
The bottom line is that the people of Australia want a fresh election in order to remove a leader that has lost their trust and to break the mysterious and disproportionate influence of the Greens.
David Anstee replied:
So we are all agreed the journalist got it wrong when writing gasoline costs are estimated to increase by 9%? Pretty elementary and significant mistake in my opinion.
Cathy Jensen wrote:
Well I thought the point of this article was to use misinformation and omissions to paint Julia Gillard as the only leader in the world implementing a price on carbon, which, clearly, she is not. Again, President Obama is pro carbon pricing and subscribes, as most world leaders do, to the mainstream view of climate change. You boys have a lot of gripes about Gillard that are outside this issue. The bottom line Scott is that we have the Westminster system of Government in this country and the way the current Labor Govt was elected was WITHIN THE RULES. Like it or not, this is democracy as we know it. Never, in any of these calls for a re-election, do I hear people wanting to reform our democratic or election system. If you truly believe in democracy the Liberal supporters or National supporters (hey they've got a "coalition" too!) simply have to live with the fact that on the day, they had less votes. These calls for a 'fresh election' are a threat our democratic system of Government and would set a dangerous precedent that I'm pretty sure neither of you would really want.
Scott van Trienen wrote:
Thank you for your response Cathy. You raised a very good point about the electoral process. Perhaps this situation will shine a light on the preferential system and maybe, the citizens of Australia may like to examine the English model. As I don't believe that the primary reason why the bulk of Australians have turned their back on the PM is because of the CO2 tax itself, I will not comment on that. Rather, it is the loss of trust that is the issue. Unfortunately for the true environmentalists, their position has been absolutely wrecked by the poor delivery of the message. Before I continue, I would like state that I try to stay apolitical and just call it as it plays out. The issue of a fresh election is a genuine one as it is clear from the consistent message through the polls that it is a call from the bottom up and if it is indeed a threat to democracy as you think it is, then it is as valid as your opinion as perception is reality. The perception is that Australia has a an ineffective government, regardless of whether it is true or not. Please keep posting as these are in interesting times.
Peter Ripphausen wrote:
Australia contributes approximately 1.5% of worldwide emmissions and if we were to completely cease carbon-based emmissions, this would NOT affect the world in ANY way! The government went to the last election specifically and emphatically stating that there would NOT be an ETS or Carbon Tax which was echoed by the Treasurer in no uncertain terms. As such the government did not have a mandate in ANY WAY for an ETS or Carbon Tax. The polls indicate that Australians are DEEPLY unhappy and VERY dissatisfied with the performance of the Prime Minister, Treasurer and I would suggest the entire cabinet. The economic burden of this tax will be major and will only increase over time. The opposition leader, Tony Abbott, has challenged the government's commitment and conviction to the Carbon Tax by calling for another federal election and this has been thwarted at every opportunity by the Prime Minister. Since the government does not have a mandate, I agree with Abbott's challenge and this would not only be the right thing to do but a truly democratic option and test of Ms Gillard's resolve. Bottom line - the tax won't make one iota's difference environmentally but will drastically and detrimentally affect our economy. There are far better ways of addressing pollution. Go on Julia, let the people decide!!! I DARE YOU!
David Anstee replied:
Mr. Ripphausen,
My income taxes (unfortunately) make an insignificant contribution to the country's coffers. By your logic, shouldn't it be OK for me to stop paying them? After all, they are deeply unpopular with me, are a major economic burden, and detrimentally affect my personal economic situation.
Vanessa Baker wrote:
A better alternative to taxing people for using what they cannot help but use, would be to offer them the incentive to use alternate energy sources or to legislate that they do.
For example; keep the solar panel grants in place instead of phasing them out like they're currently in the process of doing.
Legislate that all new houses built must have solar hot water and a minimum number of solar panels. All government buildings should be run on renewable energy - so that they can be seen to practice what they preach.
All government employees with cars that are paid for by the government should be able to choose any make of hybrid car (and not just have the choice of one hybrid).
Farmers growing organic cotton and other crops requiring less water should be given special grants or be exempt from GST.
Make it easier for people to be kind to the environment, they want to do it, they just need a push in the right direction - not a push over a steep cliff into the valley of debt. The carbon tax will cause much more trouble than the government anticipates. People will be unable to pay their bills, fall behind on their mortgages or rent and end up on the street. The general population cannot afford 10% and 9% hikes in their electricity and fuel costs. And while the government's chosen businesses rake in the redistributed carbon tax money, the social security system will come close to the brink of collapse.
Scott van Trienen wrote:
Mr. Anstee
Your taxes are significant, as they are added to everyone else's and it becomes a large sum that runs a nation. But if you were to pay tax when the rest of the people didn't, then it would make no difference.