Oz opposition leader goes nuts over carbon tax proposal

Published by MAC on 2011-06-07
Source: PlanetArk, AAP, Australian Conservative

.... tries rallying the miners to his side

Miners should be political activists: Abbott

AAP

1 June 2011

Opposition Leader Tony Abbott has urged the mining industry to become "political activists" and defeat the carbon tax, as the government accused him of misrepresenting the facts behind its climate plan.

A final decision on a carbon pricing mechanism is expected by early July, ahead of legislation being introduced to parliament by September and a fixed carbon price starting on July 1, 2012.

The multi-party climate change committee working on the scheme is awaiting two reports, by Treasury and the Productivity Commission, before holding its final round of meetings.

Mr Abbott told a lunch with mining executives in Canberra on Wednesday they needed to step up their lobbying efforts.

"I know none of you likes to be political activists ... But I say to you that at this time you need to become political activists at least for a few months, at least for a couple of years, if you are going to be able to continue to be the miners that you want to be and that Australia needs," he said.

Mr Abbott said putting a price on carbon was a tax grab which would cut jobs, destroy exporters, end the coal industry and was a "go it alone attempt to save the world".

He vowed to tour the country "every day" that parliament wasn't sitting to warn blue-collar workers of job losses under a carbon tax and the cost to households.

The opposition leader told parliament a report released this week by Professor Ross Garnaut - which updated his landmark 2008 study on climate change - had recommended an independent body make final decisions about carbon pricing.

But Prime Minister Julia Gillard seized on the remark as showing how Mr Abbott continued to misrepresent the carbon pricing issue.

"He owes Professor Garnaut an apology for his conduct," Ms Gillard said, telling parliament the government would make any final decision on setting targets and caps under an emissions trading scheme.

"You (Mr Abbott) rely on falsehoods and fear when you don't have a rational argument."

Climate Change Minister Greg Combet told parliament claims of food prices skyrocketing were also misleading, as modelling had suggested a rise of between 0.6 and 0.8 per cent.

Meanwhile, climate change committee member, independent MP Rob Oakeshott, said he expects the "final pieces of the jigsaw puzzle" to fall into place shortly, when the Productivity Commission and Treasury reports are finalised.

"I think there is an agreement waiting to happen that is substantially better than what was being put to the last parliament," he said.

"But we've still got a lot of negotiating to do - this can go wrong very easily."

Greens deputy leader Christine Milne, who is also on the committee, said it was important to stick to the July timeframe and legislate by the end of the year.

She said the committee was now at the "pointy end", with the major discussion focusing on how households and industry would be assisted.

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Coalition Govt. will rescind carbon and mining taxes, Tony Abbott tells MCA

Australian Conservative

1 June 2011

The Coalition will oppose the carbon and mining taxes in opposition and rescind them in government, Opposition Leader Tony Abbott said today.

The Gillard Government has twice threatened the mining sector, Opposition Leader Tony Abbott said in address at a Minerals Council of Australia luncheon in Canberra today.

"First, it threatened your sector with the mining tax which, in its original form, was going to give mining in Australia the highest tax rates in the world and even in its revised form is going to be a serious impost on your industry which cannot be assumed to stay confined to iron and coal and which certainly defeats what was the original purpose of mining tax reform, namely, moving taxes from production to profits.

"They are also threatening this sector with the carbon tax," Mr Abbott said.

Over time, the carbon tax has been designed to phase out the use of coal, gas and oil and to prevent the production and use of those products, he said.

"The authors of the carbon tax do not see coal and oil and gas as the most important parts of our economy. They do not see these as the sustenance of the modern way of life. They see these things as a threat to the very survival of our planet. That is the fundamental truth behind the carbon tax."

Five reasons why the carbon tax is wrong

Mr Abbott outlined five reasons why the carbon tax is wrong.

"First of all, it is a tax grab. Let's be under no misapprehensions of this. It is going to raise at $26 a tonne something like $11 billion a year or $500 per man, woman and child. This is a vastly heavier impost than any scheme anywhere in the world and totally dwarfs the European scheme which is so often cited by supporters of a carbon tax as being in some way validation of what Australia is proposing to do or what this Government is proposing to do.

"Second, it is a massive attack on jobs. Even at $26 a tonne, 24,000 jobs will go in mining, 16 major coal mines will close and 126,000 jobs will be lost mostly in regional Australia.

"Third, it is a massive hit on exporters and on business, particularly small business, for which no compensation whatsoever is proposed and on exporters most of which will not qualify for any of the concessions and compensation which the Government is talking about.

"Fourth, it is a dagger aimed at the future of the coal industry in particular, which even under the Government's own modelling will have a 35 per cent cut in production and a 13 per cent reduction in investment by 2020.

"Fifth and most importantly this is a go-it-alone attempt to save the world. That's what it is. This is an attempt by Australia to save the world by putting a burden on our industries and our economy which no other country will have.

"Any talk that in some way what is proposed here is similar to what is being talked of in countries like China and India is simply wrong. It is simply false. By 2020 under current plans and current policies China will have increased its emissions by 500 per cent.

"By 2020 under current plans and current policies India will have increased its emissions by 350 per cent.

"So without comparable global action what this Government is proposing is a massive act of economic self-harm. It is a massive assault on the prosperity of the Australian people and because that's what it is it simply has to be stopped," Mr Abbott said.

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Battle Over Australia's Planned Carbon Tax Heats Up

By James Regan and Rob Taylor

PlanetArk

2 June 2011

Mining giants warned Australia on Wednesday a planned carbon pollution reduction scheme could threaten sovereign risk and slash investment, output and jobs, as they fought to stop or at least minimize the impact of a new tax on big polluters.

Australia's government rejected the claim, citing record resource investment. The country's major mine union labeled the warnings a "scare campaign" similar to one miners used last year to force the government to water down a mine tax plan to ensure backing from major resource firms.

Resource Minister Martin Ferguson said the government would unveil a fair carbon price in July. The government's climate policy adviser has recommended A$26 per tonne of carbon emission. The mining industry has called for a price of A$10, to be phased in.

Prime Minister Julia Gillard, who leads a one-seat majority Labor government, has vowed to tackle climate change but is battling to gain support for a carbon price scheme, which would tax carbon emissions to encourage cleaner energy.

Australia, the world's biggest coal exporter, produces only about 1.5 percent of global emissions, but is the highest emitter per capita as it relies on coal for 80 percent of power.

Labor has struggled to introduce its climate policy since first coming to power in 2007. The carbon price issue has seen three leaders, one Labor PM and two Liberal party leaders, toppled and Labor's carbon price legislation defeated twice.

Another defeat could see Gillard's leadership at risk and her government seriously damaged ahead of elections due in 2013.

Miners Warn of Losses

Miner Anglo-American Plc said the scheme could cost the industry up to $25 billion through 2020, cut coal output by a third and send investment in that sector tumbling 13 percent.

"Australia is walking the plank," Seamus French, who runs the coal division of miner Anglo-American Plc, told a mining conference in Canberra.

Xstrata Plc said a carbon price would threaten Australia's reputation as stable investment environment.

"Sovereign risk is an important consideration in this regard, both for initial investment and when considering the courageous investment of billions of dollars in magnitude for returns which are only realized quite some time in the future," Xstrata Chief Executive Mick Davis said.

Treasurer Wayne Swan rejected the warnings, citing record investment flows.

Australia is the world's biggest exporter of iron ore and coking coal. Mining investment in Australia will rise to A$76 billion in 2011-12, and there is A$400 billion on the drawing board for the resource and energy sector.

"Companies are investing like they have never ever invested before in the Australian mining industry, and they did last year and it has kept increasing," said Swan.

"I know for a fact that many of the companies that are making those investments have factored a carbon price into their plans, as they do anywhere in the world."

Most Australian coal mines would easily manage the cost of a carbon price, which was assessed as being negligible, said Treasury documents released in April. The average coal mine would face increased costs of less than 80 cents a tonne of coal at a A$25/tonne price, according to the documents.

Australia's Coal & Allied Industries Ltd reported overall costs of about A$63 ($67) a tonne in 2010, whereas thermal coal prices are currently almost twice that, at about $120 a tonne.

A carbon price would have only a minor impact on the competitiveness of 90 percent of Australia's black coal mines, climate adviser Ross Garnaut said on Tuesday.

"The average carbon cost in the first year is likely to be extremely modest - in the order of A$1 to A$1.90 per tonne of coal, depending on the carbon price and the final rate of assistance," said Tim Jordan, carbon analyst at Deutsche Bank in Sydney.

Australia's main mining union, the CFMEU, said studies showed that resource investment would result in strong jobs growth, with 16,000 new jobs in the next decade.

"This is just a scare campaign," said Tony Maher, general president of the CFMEU (Construction Forestry Mining and Energy Union). "They are just trying to pressure the government to completely seal them from any costs and the government would be derelict in their duty if they did that."

"They have the capacity to pay," he said.

Mining profits hit a record A$24.7 billion in the June quarter 2010 as insatiable Asian demand led to huge price jumps for coal and iron ore, Australia's two biggest exports. Profits slipped to A$21.1 billion in the March quarter this year, but were still up a healthy 34 percent year on year.

(Editing by Balazs Koranyi)