The passage of legislation to introduce the world’s biggest carbon tax is a retrograde step for Australia.

The Parliament has voted to reduce Australia’s standard of living, undermine the competitiveness of export and import- competing businesses and cut domestic jobs growth for no climate change gain. Australian real wages, productivity and national output will be lower as a result. This does not qualify as an economic reform.

Contrary to the Government’s claims, the carbon tax provides no certainty for business and investment. Treasury forecasts of the economic impact of the scheme, as well as likely carbon prices, are based on a comprehensive global deal that no-one believes will happen.

The only certainty is that costs will continue to rise, and competitiveness of Australian industry will fall. For the first 3 years Australian businesses will pay a carbon tax 50 per cent higher than Europe, 2.5 times the NZ price and 10 times higher than in the single US regional scheme.

Under the scheme, Australia‘s minerals sector will face carbon costs of at least $25 billion by 2020, with only 10 per cent of minerals exports receiving any assistance to safeguard their international competitiveness. No other commodity producer plans to impose such a burden on their exports or domestic production.

By 2020, the scheme will cost Australian businesses and households more than $105 billion while reducing Australia’s emissions by only 53 million tonnes from current levels (mostly through the purchase of international credits). On Treasury forecasts, China’s emissions in 2020 will replace these projected savings in just over 24 hours.

The carbon tax legislation should be withdrawn and replaced by a genuine, open and transparent review of all policy options. Such a review was promised by the Gillard Government but not delivered.

An Australian carbon pricing scheme will be effective only as part of an integrated policy approach, including:

  • a global agreement that includes concerted and comparable action by all major emitters;
  • a measured transition to carbon pricing, with cost burdens comparable with those facing our competitors, and
  • the development and deployment of low emissions technologies.

The Minerals Council of Australia will continue to strongly advocate a better policy outcome.

The MCA is also a member of the Australian Trade and Industry Alliance which will continue to advocate strongly against the passage and implementation of the legislation.

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