SMELL THE CARBON RISING

Carbon price talks 'reveal tax chaos'

BY: BEN PACKHAM  From: The Australian  July 05, 2012 12:14PM

Australian Federal Opposition Leader, Tony Abbott

TONY Abbott (Australian Leader of the Opposition) has seized on revelations the government is considering cutting its carbon floor price, as Wayne Swan (Federal Treasurer) refused to rule out changes to the scheme.

The Opposition Leader said talks between Labor and the Greens on dropping the $15 floor price, to apply when the carbon tax reverts to an emissions trading scheme, showed the policy was flawed and the government in disarray.

“It just shows this is a government which is in chaos five days into the carbon tax,” Mr Abbott said.

“Five days into the carbon tax, they're already trying to change it.

“You can't fix this carbon tax, you've just got to get rid of it, and the only way to bin the tax is to change the government.”

The Australian has confirmed talks between Climate Change Minister Greg Combet and the Greens on the final shape of the floor price.

According to sources, Mr Combet last week put to the Greens that the $15 floor price, which will underpin the scheme for its first three years after it becomes a floating ETS in 2015, be dropped.

The Australian has also been told that Mr Combet raised moving to a cap-and-trade system earlier.

The Treasurer today refused to comment on the talks but played down their significance.

“I think there will be discussions at all levels, from time to time, in the community, from the business community, from others, about matters to do with the carbon price,” Mr Swan said.

“But it doesn't change the fact that there is a fixed price for three years.”

Pressed on what floor price should apply when the carbon tax reverted to an emissions trading scheme, Mr Swan said: “I'm not getting into the hypotheticals of that. We've got a fixed price for three years.”

The Australian understands discussions have centred on how to more closely align the Australian scheme to the European Union's scheme - the biggest carbon trading market in the world.

The Gillard government hopes to link the Australian emissions trading scheme to the EU market, where carbon is currently trading at about $9.80 a tonne compared to the fixed starting price in Australia of $23 and the floor price from 2015 of $15.

Earlier this week, New Zealand said it would soften the impact of its ETS, delaying plans to increase its low carbon price.

A farming scene near
Queenstown, New Zealand

Mr Abbott said New Zealand's move was the latest evidence of a trend in which nations across the world were rejecting carbon taxes.

Peter’s Comment

You can smell the carbon rising from their collective breaths in Canberra, the Australian Capital.

Carbon taxes have always been a speak good, feel good, fraud on ordinary people who will pay the price of inflation and unemployment for no good purpose.

In 2003 the New Zealand government raised a stink when it proposed a tax on dairy farmers because rich pasture produces stomach gases in dairy cows. Farmers overwhelming rejected the ‘Fart’ Tax.

Only wet-behind-the-ears countries will impose carbon taxes and when they wake up to reality the tax will die a silent, obscure death.