Prime Minister Julia Gillard kept at least one promise when she announced the Federal Government’s Climate Change Plan, more popularly known as the Carbon Tax.
According to the Prime Minister and her co-committee members from the Greens and Independents, the basic premise of the Climate Change Plan is to move Australia towards becoming a clean energy economy.
The idea is to achieve this by implementing initiatives in four areas:
Carbon Pricing;
Renewable Energy;
Energy Efficiency; and
Land Management.
The core of the plan is the introduction of a carbon price mechanism, or the Carbon Tax if you like.
This comes with a raft of complementary measures and assistance packages, not only for business but for households as well.
According to professional services firm KPMG, now that the plan has finally been released the business community has been promptly armed with the detail required for it to model, forecast and manage the aftermath of the introduction of carbon pricing.
“Even if uncertainties remain in respect of certain technical matters, now is the time for business to respond to a price on carbon,” KPMG said in its summary of the Climate Change Plan.
“The package of measures outlined in the Plan are designed to minimise the immediate effects of carbon pricing.
“Taken together, the impact of these measures will be progressive and cumulative making them significant for many businesses.
“Over time, they will exert a transformative effect on the Australian economy.
“Businesses of all types and sizes need to prepare for life in a low carbon, clean energy future.”
Realistically, any business that is only just now beginning to prepare for life in a low carbon, clean energy future should be explaining to their shareholders why that is so.
The failure of Kevin Rudd and the Greens to play nicely together and get the Carbon Pollution Reduction Scheme across the line in 2010 should have told any company director that another version would be inevitable at some stage.
They may have gained some time had the Liberals won the last election but even had they done so they would have had to eventually cave in to developing their own package.
The fact Opposition Leader Tony Abbott has his Direct Action plan ready to go gives some idea that some Carbon Tax, Emissions Trading Scheme or some other plan with some other name would be put forward for implementation.
This became even more apparent once Julia Gillard was swept into power with the support of the Greens who, thanks to Liberal Party preferences was able to snatch away the seat of Melbourne at the last Federal election.
Writing on-line for the ABC sustainable economy research director for the Centre for Policy Development Laura Eadie described the Climate Change Plan as an exercise in political compromise.
“The Clean Energy Plan skillfully (sic) provides something for almost everyone, and with some nice rhetorical flourishes,” Eadie said.
“Our biggest polluters still get free permits, now called a ‘Jobs and Competitiveness’ program.
“In a cut-and-paste job from Abbott’s direct action plan, brown coal power stations will be paid to shut down early in the name of ‘Energy Security and Transformation’.
“There are tax cuts for all, and increases in the pension. Any ‘pain at the pump’ is avoided with consumers spared fuel price increases.”
Eadie surmised that if Tony Abbott were to try to reverse the legislation once it has been passed and in operation he could run the risk of looking foolish.
“With support of the Greens and key independents, the legislation will pass through the Senate,” Eadie said.
“Come the next election, a teensy little carbon price won’t seem so painful.
“In the near term, Labor’s Achilles’ heel is the four billion dollar revenue shortfall.”
Although the Prime Minister has finally formally announced the Climate Change Plan, there is still some way to go before it is actually passed as legislation.
This is not scheduled until December this year and can’t happen until the legislation has been put through the wringer in the House of Representatives in August and subsequently tabled in the Senate in mid-September.
There is still a lot of water to flow under the proverbial bridge until then and Gillard’s task to get the announced packaged through to legislation remains a difficult one.
There are some strong voices of opposition being raised in some areas; the powerful mining lobby is one that springs to mind.
Not only are the country’s miners concerned about what the new tax will do to their bottom line they are also anxious about the Minerals Resource Rent Tax, which refuses to go away.
“There will be much pain for little environmental gain under the proposed carbon pricing regime,” The Association of Mining and Exploration Companies chief executive Simon Bennison said.
According to AMEC the carbon price will combine with the fuel rebate reduction to result in a double taxation whammy to the mining and exploration sectors.
Bennison said the cumulative impact of the carbon tax and the proposed MRRT will have a detrimental effect on the sectors’ international competitiveness.
“Whatever way you look at it, the Australian minerals exploration and mining sector will be faced with extra costs in doing business as a result of the carbon pricing mechanism,” he said.
“It is yet another financial cost on industry that has been the engine room of the Australian economy, and one that generates significant economic and social dividends for the nation.”
