Gillard defends new carbon tax


Australian prime minister Julia Gillard today began an election-style campaign to promote a tax on carbon emissions as her political survival hangs on a programme highly unpopular with both industry and voters.

Ms Gillard's poll rating remains near record lows, and some 2,000 protesters denounced the tax when they marched through Sydney yesterday, the day the tax came into force.

The carbon price applies to nearly 300 companies and city councils. It is designed to fight global warming and help curb carbon emissions by 5 per cent of 2000 levels by 2020.

The carbon price forces the biggest polluters, from coal-fired power stations to smelters, to pay A$23 (€18.6) per tonne of carbon dioxide emitted, more than twice the cost of carbon in the European Union, currently trading at about €8.15 a tonne.

Ms Gillard embarked on a round of radio and television interviews and said voters would see a muted impact of the carbon price on the economy and they would realise opposition warnings of big job losses were wrong.

"People will have the opportunity to judge for themselves," she told Australian television. "And what people are going to see is tax cuts."

The tax is to be superseded in 2015 by a trading scheme with international links under which companies will be able to buy permits authorising emissions or carbon "offsets" allowing for energy savings elsewhere.

From 2015, polluters and investors will be able to buy carbon offsets overseas from projects that cut emissions, like wind farms. Ultimately, they may trade with schemes in Europe, New Zealand and possibly those planned in South Korea and China. Australia has amongst the world's highest per capita carbon dioxide emissions due to its reliance on coal-fired power stations.

For now, businesses will have the economic pain dulled by billions of dollars in sweeteners and free permits. Industries will get exemptions, especially those with large export volumes.Voters have also been given tax cuts to compensate for the impact of the carbon tax on prices, such as higher electricity bills.

But a Nielsen poll in Fairfax newspapers today found 62 per cent of voters opposed the carbon price, and that Ms Gillard's minority government would be thrown out of office if an election were called now.

The conservative opposition has vowed to scrap the tax if it wins power at the next election, which is due in late 2013 but could be called before then.


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