Australian senate approves emissions trading proposal


THE UPPER house of Australia’s parliament yesterday approved the government’s proposal to adopt an ambitious emissions trading programme, marking the end of a prolonged political battle that the business community has watched anxiously and that dragged prime minister Julia Gillard’s public approval ratings to historic lows.

The new regulations will impose a carbon tax on 500 of the country’s biggest polluters starting in July, before becoming a market-based trading programme in 2015. The size of the programme would be second only to the European Union’s.

The senate passed the package of 18 Bills that make up the carbon-trading legislation by a vote of 36-32, with the support of senators from the Green Party. The sharply divided House of Representatives passed the Bills by only two votes last month.

The legislation has consumed Australian politics for the past four years and contributed heavily to the ousting of the previous prime minister, Kevin Rudd. Its passage prompted cheers from the packed public gallery of the senate chamber in the capital, Canberra, according to local media reports.

But the opposition leader, Tony Abbott, has promised to repeal the legislation if his coalition comes to power in the next election.

Mr Abbott took what he described as a “blood oath” to roll back the programme after it passed the lower house. He has said that the plan would prove disastrous for Australia’s economy, which relies heavily on mining.

The next election in Australia, however, is not scheduled until 2013. Mr Abbott, who is travelling overseas, criticised the law in a statement on his website.

“Today Julia Gillard and the Labor Party have confirmed in law their betrayal of the Australian people,” he wrote. “The longer this tax is in place, the worse the consequences for the economy, jobs and families. It will drive up the cost of living, threaten jobs and do nothing for the environment.”

The vote was a must-win for Ms Gillard, whose government has not done well in recent polls, sparking talk of a cabinet reshuffle or even perhaps the Labor Party’s abandonment of Ms Gillard for another candidate.

Ms Gillard, Australia’s first woman prime minister, has sustained a series of policy setbacks since taking the reins from Mr Rudd in a party coup last year. Most recently, Australia’s highest court issued an embarrassing rebuke to her government’s plans to ship asylum seekers to Malaysia as part of an arrangement to swap refugees.

Tim Jordan, a senior analyst at Deutsche Bank in Sydney, said the law represented a major victory for the government and was likely to stay.

“While the risk of the law being repealed is not zero, polls have shown pretty robust levels of public support for cutting carbon emissions,” he said in an interview. “Repealing the carbon price would also mean unwinding the tax cuts and changes to welfare that go with it, and that would be politically costly.” – (New York Times service)