The folly of Labor’s carbon tax is finally starting to dawn on business leaders in this country. Many of those now complaining remained silent during the debate over the implementation of the tax. Whether this was due to fear of Labor Government retribution or a naiveté about the damage the tax would do to Australia’s competitiveness will never be known.
The government has set a price on carbon dioxide of $23 per tonne. This is more than three times higher than the price of permits in other nations foolish enough to implement similar schemes in a vain quest to stop climate change.
Unfortunately, Australian business owners won’t be able to take advantage of these relatively cheaper international permits because the government has set a limit on the number of permits that can be purchased from overseas.
This suggests that the Australian carbon tax is less about climate change and more about boosting government revenue.
While forecast to run at a net cost to the budget in the early years, the carbon tax will cause prices to rise for every Australian. Naturally the government says that their compensation measures will adequately accommodate the cost of living rises, but their own words suggest otherwise.
During the recent (and continuing) battle over the leadership of the Labor Party, Kevin Rudd suggested he may reduce the initial carbon tax price to placate community concerns about price rises.
He was slapped down by Finance Minister Penny Wong who claimed that this irresponsible approach would severely impact the budget.
Surely a reduction in the carbon price would necessitate less compensation and the budget could be trimmed accordingly. That is unless the forecast revenue is expected to be much, much higher than otherwise predicted.
Given the track record of this government’s forecasts in relation to tax revenues and expenditure, one is wise to be sceptical.
Labor’s mining tax was exposed as costing billions more than they originally said it would. The annual budget has never met the original forecast. This year alone the predicted deficit has blown out from $12 billion to $22 billion and most recently $57 billion; a near five fold blowout in less than 12 months.
With such form, how can any of us take a financial assurance from this government seriously?
There is further evidence that this carbon tax is more about revenue than results. The government has set a floor price for permits, meaning that even if the entire world wakes up to the futility of such schemes and permit prices fall to zero, Australians will be lumbered with a minimum price of $15 per tonne.
Should a business purchase permits from overseas for less than this amount, they will be required to make a ‘top up payment’ to the Australian Government.
While many of us will be critical of the decision to implement a carbon tax as a betrayal of the Australian people, to be sold such a policy under the guise of protecting the environment is an insult to all of us.
And to accept the government’s promises that Australian families will be adequately compensated for this new impost is to suspend any semblance of common sense.
Cory Bernardi is the author of seven books and has been a member of the Australian rowing team, a publican, an investment portfolio manager and spent nearly 14 years as an Australian Senator.
