Carbon tax ‘will cost industry jobs’

12-07-2011

Many industry groups have responded negatively to the Government’s carbon tax plan, price, saying the scheme is unfair and will cost jobs.

Under the new scheme, Australia's 500 biggest polluters will pay an initial set carbon price of $23 per tonne from July next year, which will rise by 2.5 per cent annually until it is replaced by an emissions trading scheme in 2015.

Most consumers will be compensated for subsequent price increases via tax reform and direct payments, but industries say their own compensation is inadequate.

The Queensland Resources Council (QRC) says the carbon tax could jeopardise about 3000 coal mining jobs directly in the state, and as many as 13,000 jobs servicing the industry.

"The coal industry should have qualified for carbon permit compensation to the tune of 66 per cent of their liabilities," the council's Michael Roche said.

"Instead the industry has been given assistance equivalent to 7 per cent – it’s a miserable package."

The steel industry will be eligible for 94.5 per cent assistance, plus access to an additional $300 million fund, which is expected to compensate for any remaining costs.

Bluescope Steel is among those that could end up gaining financially from the package over the first four years.

Rio Tinto savaged the planned carbon tax, saying the policy would hinder investment and jobs growth in Australia without reducing global emissions.

In a release to the Australian Securities Exchange, the company's Australian managing director, David Peever, characterised the tax as an "unfair tax on Australian exporters".

"We are deeply concerned the proposed carbon tax fails to shield Australia's export sector and leaves it at a disadvantage compared to international competitors," he said.

Rio is Australia's second-largest listed miner.

The company is also the country's third-largest coal miner by output after BHP Billiton and Xstrata.

Prime Minister Julie Gillard said she had a "lot of explaining to do" in the months ahead, but overwhelmingly Australians wanted action on climate change and the cheapest way to address it was to put a price on carbon.

She acknowledged some households would not be assisted under the scheme, but pensioners would be ahead by 20 per cent and most low- and middle-income households would either be better off or "line-ball".

"I had to make choices about who needs assistance the most," she said, adding that the carbon price in its first year would only add about 0.7 per cent to the cost of living.

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