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Don’t axe the tax: emissions trading supporters make last-ditch plea

Parliament House in Canberra, Australia

Parliament House in Canberra. Photograph: Daniel Munoz/AAP


Powered by article titled “Don’t axe the tax: emissions trading supporters make last-ditch plea” was written by Lenore Taylor and Daniel Hurst, for on Sunday 6th July 2014 20.05 UTC

Supporters of emissions trading are making a last-ditch plea to the Senate not to repeal Australia’s laws – citing new analysis that shows “axing the tax” will cost the budget almost $20bn over the next four years and a letter from 59 leading economists insisting a carbon price is the best way to reduce emissions.

But the government is determined the carbon price repeal should be the first decision of the new Senate and, with the support of the Palmer United party (PUP), appears set to bring on the debate and finally achieve the tax’s repeal this week.

Agreement is close on the one amendment the PUP insists on – to guarantee that cost reductions are passed through to consumers. Meanwhile the PUP is preparing to introduce its own version of an emissions trading scheme this week with the price temporarily set at zero until trading partners act.

A costing by the parliamentary budget office has found budget revenues would be $18.1bn higher over the next four years if the carbon price was retained.

The costings, requested by the Greens, found that if the government also stopped paying compensation in the form of free permits to the coal industry, the budget benefit would be $20.2bn.

The Greens leader, Christine Milne, said the costings showed “the government is claiming a budget emergency, but it is preparing to forgo $18bn to help out the big polluters”.

At the same time a group of 59 economists, led by the former Liberal leader John Hewson, has appealed to the Senate not to repeal carbon pricing.

“We are writing this open letter as a group of concerned economists with a broad range of personal political views, but united in the judgment that a well-designed mechanism that puts a price and limit on carbon pollution is the most economically efficient way to reduce carbon emissions that cause global warming,” the economists wrote to all MPs and senators.

“Such a mechanism is a necessary and desirable structural reform of the Australian economy, designed to change relative prices in a way that provides an effective incentive to consumers and producers to shift over time to more low-carbon, energy-efficient patterns of consumption and production.”

After lengthy negotiations with the PUP leader, Clive Palmer, over his party’s single demand for its three Senate votes in favour of repeal – an amendment to ensure power price reductions are passed on to consumers – the environment minister, Greg Hunt, was confident the repeal would succeed. Repeal is also backed by incoming Family First senator Bob Day, Liberal Democrat senator David Leyonhjelm and DLP senator John Madigan.

Hunt said he had spoken to Palmer three times in the past week and had continued “extremely constructive” discussions with PUP representatives over the weekend.

“We will add additional legislative safeguards and guarantees that all of the savings from the carbon tax will go back to consumers,” Hunt told Sky News on Sunday.

“We will, with the cooperation of the crossbenchers, I trust and I hope, bring those bills back. We’re not going to delay. We will bring them out of committee where the ALP is trying to keep them and we will work with the Senate tomorrow [Monday] and over the coming days to have the bills passed. The full savings will come back to consumers and that will be through law.”

The government has scheduled the carbon price repeal bills as the first order of business at noon on Monday, but this could trigger procedural manoeuvring on the floor of the Senate because the environment and communications legislation committee was not due to present its report on the legislation until 14 July.

The manager of government business in the Senate, Mitch Fifield, said on Friday the committee had finished its report but Labor and the Greens had refused to take part in a meeting, depriving it of the ability to table the report early. It is understood the committee is due to meet again on Monday.


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