Industry will bear the brunt of carbon tax

Less than 1,000 companies will have to pay the fixed carbon price the Government hopes to implement in July next year, Climate Change Minister Greg Combet has said, however this won’t come as good news for Australia’s industry which will bear the brunt of the tax.

However, Minister Combet defended the carbon tax, claiming emissions-intense, trade-exposed companies will be compensated, ensuring they are not unfairly treated.

Gillard announced the carbon tax will be initiated as early as July next year, with an emissions trading scheme (ETS) to take its place within three to five years.

According to Minister Combet, quoted in the Canberra Times, the system will become an internationally compatible regime once the transition is made to a market-based emissions trading scheme.

But for Australia’s industry, both a carbon tax and an ETS is bad news, with companies fearing they will be forced for fork out millions of dollars annually for their carbon output – which is a by-product of large-scale manufacturing.

Minister Combet said householders could rest assured they would be compensated for higher energy prices once the carbon price kicked in, and that the Opposition Leader Tony Abbott’s claims that carbon tax would affect households and people is ‘rubbish’.

Combet blamed the carbon tax on a ‘hole’ in the budget.

”As we’ve produced last week, the analysis of the Coalition’s so-called direct action plan leaves a $30 billion hole in the fiscal position of the Government,” Combet said.

The Minister said the Government’s proposed carbon tax would have minimal impact on inflation because the money raised from companies that output high levels of carbon would be used to reimburse low-income households.

”Every dollar that is raised by the payment of a carbon price by the companies that are emitting large amounts of pollution will be used towards supporting households, with a particular emphasis on pensioners and low-income households,” he said.

According to the Minister, the Government’s next step is to organise compensation for emissions intense trade-exposed companies, such as manufacturers.

”A carbon price is paid by the organisations in our economy that are emitting large amounts of pollution,” Combet said.

”A carbon price is no more than the price of a permit that is paid by large polluters.”

Image courtesy of Theaustralian.com.au

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