Aussie ‘toxic tax’: Cutting pollution and jobs?

A truckload of coking coal (L) arrives at the financially beleaguered BlueScope Steel refinery in Port Kembla near Sydney (AFP Photo / Torsten Blackwood)
Australia has introduced a much-contested carbon tax after a marathon two years of debate. The nation’s government claims it is needed to comply with climate change obligations, but the opposition says it will raise the cost of living and cut jobs.

­The new measures are part of a government initiative to reduce carbon emissions in the country that are some of the highest per head in the world because of its reliance on coal power. However, the new “toxic tax,” as it has been dubbed by the opposition, has been met with widespread protest.

The legislation will oblige Australia’s worst-polluting companies to pay a tax of A$23 (US$24) for every ton of carbon dioxide they emit. The tax is also expected to rise to A$25.4 (US$26) by 2014.

Australia’s Clean Energy Act stipulates one of the highest prices for carbon off-setting schemes in the world, almost double the price of current EU schemes of between $8.7 and $12.6 per ton.

As well as reducing carbon emissions, the Australian government hopes that the new bill will promote growth in the renewable energy sector and reduce the country’s reliance on fossil fuels. Australia’s thriving mining industry and energy sector will bear the brunt of the new carbon tax policy. However, it is expected to have a knock-on effect on the general population in increased energy bills.

Labor government PM Julia Gillard maintains that the unpopular bill is the only way Australia can cut down on its high carbon emissions. She also declared that people will be compensated for the rise in fuel prices. Additionally, the government has invested billions of dollars on softening the blow on costs for businesses.

"People have already seen pension increases and family payment increases and this assistance to families around the country will continue," PM Gillard told Australia's ABC.

The controversial tax is a point of contention for voters who claim that Gillard has gone back on her pledge against introducing the legislation upon winning the 2010 elections.

The opposition has vowed to overturn the law if they voted into power in the 2012 elections. Conservative leader Tony Abbot said on Sunday "on day one of the new parliament, the carbon tax repeal legislation will be introduced."

"It [The carbon tax] will hit every Australian family's cost of living, it will make every Australian job less secure and it won't actually reduce emissions," he said.

The treasurer of Australia’s second largest state, Queensland, said that the tax would have the most significant impact on its workforce.

As many as 21,000 jobs could be lost and salaries could drop by almost $2,940 (US$3,000), treasury figures indicate.

"They're trying to use that (carbon tax) as an excuse, while consumers are confused, to actually put up prices more than what the carbon tax actually justifies," he told reporters on Sunday.

Coal-fuel power currently provides Australia with around 85 percent of its electricity. The nation has an exceptionally lucrative mining industry and exports over 50 percent of its mined coal to East Asia.