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Australia PM warns polluters' days over
by Staff Writers
Sydney (AFP) July 9, 2011

Australian Prime Minister Julia Gillard came out fighting over her contentious pollution tax Saturday, warning the "freedom to pollute our skies" was over, ending 20 years of denial and delay.

Gillard used some of her strongest language yet on the plan to tax Australia's top 500 polluters for their carbon dioxide emissions linked to global warming, warning the time for inaction had passed.

"No longer will the nations biggest polluters be able to pollute our atmosphere for free," Gillard told a gathering of Labor party faithful in Sydney.

"From July 1 next year, the freedom to pollute our skies will cease.

"Two decades of denial and delay will come to an end. Polluters will have to pay."

Gillard is due to unveil the full detail of her carbon tax package on Sunday, followed by a rare nationally televised address and two-week whistlestop tour of Australia to sell it to voters.

Australia is among the world's worst per capita polluters due to its reliance on coal-fired power and mining exports.

The carbon tax is one of the biggest economic reforms in Australia for decades and Gillard is staking her ailing political fortunes on its success.

The prime minister has the votes to get the package through parliament but selling it to the public will be tough, with polls showing it to be relatively unpopular and the conservative opposition vowing a loud anti-tax campaign.

Carbon dioxide emissions will be taxed at Aus$23 ($24.70) per tonne according to widely published leaks, on a par with the European Union's emissions trading scheme but lower than the level recommended by experts in Australia.

The tax would rise by about three or four percent every year, according to details leaked to the Sydney Morning Herald, before giving way to an emissions trading scheme (ETS) linked to global markets within three years.

Companies would be limited in the number of permits they could buy offshore under the ETS and the permit price would be capped at the upper and lower ends to prevent huge price fluctuations, according to the Herald.

High-emissions exporters such as steelmakers, cement and aluminium will receive 94.5 percent compensation in recognition of the strong Australian dollar, as well as government assistance to upgrade to cleaner technologies.

The burgeoning liquefied natural gas sector, expected to be a strong contributor to Australia's future national income, will get 66 percent compensation in the form of free permits.

High methane or "gassy" coalmines will get $1.275 billion in assistance, while electricity generators -- the main driver of Australia's pollution -- would receive $7.3 billion and the dirtiest be offered incentives to close.

Mining giants BHP Billiton, Rio Tinto and Xstrata were among the top 20 companies to be hit by the carbon tax and stood liable for a combined $380 million under a conservative price of $20 a tonne, according to modelling by the Australian Financial Review (AFR).

Woodside Petroleum would pay $167.8 million a year while top emitter Macquarie Generation, which runs Australia's major coal-fired power plants, would owe $468.2 million, according to the AFR.

Petrol has been exempted from the tax in a bid to shield consumers and households will see the lion's share of the Aus$10-11 billion raised in the first year returned through tax cuts, pension boosts and one-off payments.

"Most people will find that when all is said and done, they are not a cent behind, and many will come out ahead," said Gillard.

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