Manufacturing News

Senate passes carbon tax, 36 votes to 32

The carbon tax was passed through the senate on Tuesday, sign-posting the end of months of speculation from Australia’s manufacturing industry over whether or not the reform will go ahead.

[Image, right: The Greens rejoicing after their carbon tax win. Picture taken by Ray Strange, sourced from The Australian.]

Now, manufacturing companies have no choice but to prepare for a future alongside the much-debated climate change tax.

For some, this tax is a natural cost of living in a universe so heavily-burdened by atmospheric waste. For others, the carbon tax could kill their livelihoods.

Trade union approves

For the Australian Council of Trade Unions (ACTU), the carbon tax is a welcome measure that will lead the way for more jobs for Australians.

“We believe that this package looks after workers, their families as well as their communities, which unions fought hard to ensure,” said ACTU president Ged Kearney.

“This legislation will help restructure the economy by reinvesting carbon revenue towards innovation and initiatives that will change the way our energy is produced.

“Over time, hundreds and thousands of jobs will be created all over the country.”

Industry group doesn’t

For the Australian Industry Group (Ai Group), the tax is fraught with danger for certain sectors, particularly Australia’s manufacturing industry.

"The passage of the climate change legislation with a high starting price and no flexibility to adjust the price in the initial years is deeply disappointing,” said Ai Group chief executive, Heather Ridout.

“This is especially so given the extremely uncertain and weak global economic conditions and the volatility of global carbon prices. It will add significant costs at a time when business can least afford it.”

Economic reform

For the ACTU, Tuesday’s decision to pass the carbon tax marks the beginning of a new era of economic reform for Australia.

“Workers, communities and businesses now have certainty and can plan for the future,” said Kearney.

“It seems like such an epic journey from the first moment we spoke about action on climate change back in 2008 till now.

“But we can finally hold our head up as a nation and know that we’re making an investment in our economy, environment and in the future generations to come.

“Unions are proud to have been involved in the debate from the beginning and now we have been able to see a delivered package that includes the protection of Australian industries and jobs.

“We can say unions were fundamental in ensuring the overall package included assistance to households, the protection of Australian jobs, support for affected industries as well as investment in clean innovation and technology.

“This is just the beginning of great possibilities.”

Ai Group however, believes the carbon tax starting price – at $23 a tonne from 1 July 2012 for 500 of the country’s biggest polluters – is way too high for the majority of Australian manufacturers affected to absorb, even taking into account available government assistance packages.

"Ai Group has long argued that the high starting price during the three year fixed price period is a very serious issue,” said Ridout.

"The downward pressure on the European price in response to economic circumstances is testament to the need for a more flexible approach. For Australia not to show willingness to adjust to this changed context is very concerning.

"It is vital that the Government be ready to amend its own scheme to preserve competitiveness if, as we expect, it has underestimated the impact of the carbon tax on business.

"Passage of the legislation is not the end of the story. There is the implementation of the scheme itself, requiring hundreds of businesses to scramble if they are to get to grips with their new obligations. There is permit assistance for emissions intensive trade exposed industries, and capital grants for manufacturing efficiency; these need to flow swiftly and effectively to affected businesses.

“The steel transformation legislation also needs to operate effectively to help a sector facing many challenges.”

Leaders at loggerheads

Federal opposition leader Tony Abbott was out of the country while the carbon pricing bills passed through the senate.

However, he left the following message about the carbon tax on his website.

“The carbon tax is a toxic tax based on a lie from a Prime Minister who promised six days before the last election ‘there will be no carbon tax under the government I lead’,” he said.

“This new tax is a blow to the future of Australian manufacturing and a new burden for families struggling under cost of living increases. The tax will increase but the so-called compensation won’t.

“The Coalition’s position is principled, it is clear to all and it will free the economy from the red tape, costs and job losses that the carbon tax will produce.”

The senate voted to pass the carbon tax bills on Tuesday with a majority 36 votes, compared with 32 against the tax.

Prime Minister Julia Gillard will now launch a new national advertising campaign, according to a report from The Australian, promoting her tax win, warning companies that they will be fined up to $1 million if they attempt to make an excessive or unfair profit from the legislation. 

"For the first time, Australia’s biggest polluters will have to pay for every tonne of carbon pollution they emit," read a notice on Gillard’s official website after the senate announced its decision.

Gillard says the tax will ensure: a cut to carbon pollution of at least 160 million tonnes a year in 2020; tax cuts and increases to household payments and pensions for millions of Australians; and a clean energy economy with new economic opportunities and clean energy jobs.

Are you in favour of the carbon tax? Have your say by clicking on the ‘comment’ button below. 

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