FourFourFourTwo: Australia’s new $3 billion carbon tax could hit poor people the hardest
FourFourFiveTwo: Australian Prime Minister Tony Abbott says he will push for a carbon tax of $3.50 a tonne to combat climate change and his plan has been met with scepticism from environmental groups.
Key points:The carbon tax would be levied on all goods and services, including electricity, gas, mining, construction and wholesale trading.
The government will set a target of 30% emissions reductions by 2020, a goal the prime minister says is “exaggerated”The price of carbon is set to rise by $10 per tonne over four years to $36.50 per tonnes, but not $60 per tonNEEDED TO SEE: Climate change and inequalityThe Government has been working to get a carbon price set, but is having difficulty convincing voters that the costs are worth the benefit.
The Government says it wants to help the country reduce greenhouse gas emissions, but critics say the costs would be borne by the poor and most vulnerable.
The $3 a tonnes price is the price of the carbon tax that was introduced in the Senate on Thursday, replacing the previous $2.50 one.
The price rises over four-and-a-half years, from $30 a ton to $37.50.
It will mean Australians would pay an additional $2,200 a year for electricity in 2020-21 and $6,400 in 2021-22.
It also includes a $50 per day increase in gas prices from 2018-19, which will raise prices by $1.30 per litre.
It comes amid increasing evidence that the carbon price could be an expensive way to help reduce emissions and the impact on the poorest.
The carbon price will rise by at least $10 a tonme over four months from 2020, rising to $38 per tonme by 2020-22, while prices for gas will increase by $4.40 a litre to $1 a litne.
While there has been debate over whether the price would be a fair and appropriate target for a $1 per ton-a dollar tax, the government says it will set the price at 30% of emissions reductions and will increase it to 40% by 2020.
That is higher than the 30% target set by the Australian National University (ANU), but below the OECD average of 40% for a comparable carbon price.
In a report released this week, ANU Professor of Energy Economics and Policy Laurence Gardner said that while the carbon prices were more expensive than the $1,500-a year target, the costs of those carbon taxes were offset by higher carbon prices paid by consumers.
“In contrast to the $30-a day carbon tax, consumers would pay $7 per litres, or more than three times what they would pay for electricity,” Professor Gardner said.
“If the Government’s carbon price of $2 per ton of CO2 is not a credible way to achieve this goal, it will be difficult for voters to justify supporting a carbon taxation of $1.”
Professor Gardner also said it was a mistake to compare the Australian economy to China.
“China is producing more CO2 per capita than we are.
The carbon tax is not comparable to the Chinese economy, as the Government would be forced to subsidise the cost of carbon.”
The $10-a tonne carbon tax can be compared to a 10-year, $1-a barrel oil price.
“The carbon levy would be based on a number of factors, including the value of the fuel that the taxpayer uses to produce it.
It would also include a 10% surcharge on any goods that were used in Australia before the 2020s and a 15% surtax on all other goods and the value added by those goods.
The levy would also apply to electricity and gas, which would be charged a 25% tax, with a further 20% charge for liquefied natural gas and on all non-fossil fuel.
In addition, the levy would include a 3% surmountable fee on any non-energy-related purchases, which is aimed at encouraging businesses to invest in the electricity and natural gas industries.
The Prime Minister says that while Australia has a “lack of energy, a lack of jobs and a lack, sadly, of innovation”, the carbon levy will give us an “opportunity to make the case that we can achieve our economic objectives”.
He says the cost-benefit analysis of the new tax is “unquestionably correct”.”
The cost-effectiveness of the tax is quite clear, the benefits are quite clear and the cost is fairly low,” he said.
He says it is time for the Government to be “more aggressive”.”
This is not the right approach.
This is not what we should be doing.
We should be looking at the economic and social impacts on people in Australia, on their families, on the health of our families, and we should make sure we do that in a way that minim