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Industry unhappy with Australia's pollution tax
by Staff Writers
Sydney (AFP) July 11, 2011

Airlines, miners and industry launched a furious attack on Australia's bold new tax on carbon emissions Monday, as Prime Minister Julia Gillard began selling the levy to sceptical voters.

Business leaders warned the tax on the nation's 500 biggest polluters would not only cost taxpayers billions and force major industry to slash production and jobs, but would fail to reduce global carbon emissions.

The government defended the scheme, which will price carbon at Aus$23 ($24.74) per tonne from July 1 next year, saying it was the best way to help slow global warming and save natural treasures such as the Great Barrier Reef.

"At its core it really is quite simple, we at the moment put carbon pollution into our atmosphere for nothing, a big polluter can just keep chugging it up into the skies and not pay anything," Gillard said.

"The core of this is those big polluters will pay a price, they're smart business people, when a bill comes in for carbon pollution they'll say, 'How can I reduce that bill, how can I change my processes so I generate less carbon pollution?'."

Gillard said the levy, which will be offset by a package of personal tax breaks including the lifting of the tax-free threshold for workers, would slash carbon pollution in Australia, one of the world's biggest per capita emitters.

Under the plan, which is under heavy attack from the conservative opposition party, there will be a fixed price on carbon pollution until the Asia-Pacific's largest emissions trading scheme to date is launched in 2015.

As the Australian share market dipped more than one percent Monday, industry leaders rounded on the plan driven by Gillard, who had pledged during last year's election campaign not to introduce a carbon tax.

The coal industry came out with all guns blazing, warning the new tax would force mine closures and cost thousands of jobs in the industry that is one of the major drivers of Australia's mineral exports-led economy.

"It's a regrettable policy," Ralph Hillman, executive director of the Australian Coal Association, told public broadcaster ABC.

"You are going to lose jobs in Australia, we calculate about 4,700 direct jobs (through closures of existing mines), but for no cuts in emissions," he said, casting doubt on the effectiveness of the scheme.

The Minerals Council said the plan would "take a baseball bat to the Australian economy", including a Aus$25 billion hit to mining, while doing little to reduce emissions.

Managing director of Rio Tinto Australia David Peever described the reform as "an unfair tax on Australian exporters" that left them at a disadvantage compared to international rivals.

And Australia's richest woman, mining magnate Gina Rinehart said the carbon tax, along with a proposed levy on iron ore and coal, were hurting the country's competitiveness.

"Obviously the carbon tax and MRRT (minerals resource rent tax) don't help our cost competitiveness. They hurt us," Rinehart said, Dow Jones Newswires reported.

Qantas and Virgin Blue said the multi-million dollar cost of the tax would be passed on in full to their passengers while the nation's biggest employer lobby group, the Australian Chamber of Commerce and Industry, warned it would weaken the economy dubbed the "Wonder from Down Under".

But Gillard, who engaged in a vigorous election-style media blitz to sell the tax Monday, said the coal industry would not be harmed and jobs would not be jeopardised.

"There will be growth in jobs in coal," she said. "The demand for coal will continue," she said.

But the government faces a tough battle convincing voters, who polls have shown are resistant to the tax, which is expected to increase consumer prices by 0.7 percent.

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The effect of Australia's new carbon tax
Sydney (UPI) Jul 11, 2011 - Australian Prime Minister Julia Gillard said that new government polices mean that carbon dioxide emissions will be taxed at $25 per ton beginning in 2012.

The policy is being promoted as a major victory for Australia's environmental activists, with Australian Greens leader Bob Brown saying: ''This today is a world-leading outcome. It is going to lead to better outcomes at Durban, at the next international conference on climate change.''

The government's carbon tax scheme was also strongly backed by rural independent MPs Tony Windsor and Rob Oakeshott, The Sydney Morning Herald reported Monday.

''As I have said all along, I want to be part of something that does something about climate change, not part of something that collects revenue and shuffles it around," Windsor said.

"'I believe that this climate change package is an affordable catalyst for this change as it will reduce greenhouse gas emissions, clean up our environment and move our economy from its dependence on fossil fuels, ensuring the future of our children and their children.''

The country's new greenhouse gases economic reform policy will affect an estimated 500 firms, including some of Australia's largest international companies. Offering some relief, in 2015 a market-based trading scheme will be introduced, which will allow major polluters to buy offsetting shares in companies producing emissions below the target levels.

Australia, one of the world's most sparsely populated countries, is one of the planet's worst emitters of greenhouse gases per capita, as it not only relies on coal for 80 percent of its electricity generation from indigenous coal reserves but is a major coal exporter as well, particularly to the voracious demands of the Chinese energy market.

Under the recently passed legislation the new policies go into operation July 1, 2012, affecting companies that produce at least 25,000 tons of carbon dioxide per year.

Qantas Airlines, Australia's flagship aerial carrier, has already reacted to the policy, releasing a statement on its Web site stating, "In the context of the significant challenges facing the global aviation industry, the Qantas Group will be unable to absorb the additional costs associated with the carbon price and there will be a full pass-through to customers."

Opinion polls indicate that roughly 60 percent of Australia's voters are against the policy, indicating potential trouble for the Gillard administration.

Gillard remains committed to the new policy and convincing the Australian electorate of it worth, stating: "By 2020 our carbon price will take 160 million tons of pollution out of the atmosphere every year. That's the equivalent of taking 45 million cars off the road."

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