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Carbon tax going, but don't expect big savings

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Business wants carbon tax gone

Jennifer Westacott, chief executive of the Business Council of Australia, says despite the recent failure of the Senate to scrap the Carbon tax, she wants "to see the tax go this week".

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The carbon tax will be repealed within days after a breakthrough in talks between the government and crossbench senators who were concerned at what they believed were draconian provisions in the repeal bill.

An amended bill will be presented to the Senate and the House of Representatives as soon as Monday.

LDP Senator David Leyonhjelm.

LDP Senator David Leyonhjelm. Photo: Alex Ellinghausen

Liberal Democrat senator David Leyonhjelm and Family First senator Bob Day told the government on Friday they were prepared to walk away from the bill if it continued to include provisions that penalised small businesses that didn't pass on any savings.

"No one wanted the carbon tax gone more than I did," Senator Day said. "But we couldn't have had those provisions in there. They would have been worse than the tax."

Describing the penalties as "way over the top" and "just draconian" Senator Day said Environment Minister Greg Hunt agreed to remove them on Saturday.

Family First Senator Bob Day.

Family First Senator Bob Day. Photo: Alex Ellinghausen

"He sent the amendments through and they are fine,'' he said. "The penalties will now only apply to the 60 or so major energy suppliers. They are big enough and ugly enough to look after themselves."

On Monday, Senator Leyonhjelm warned the government not to cave into Palmer United Party leader Clive Palmer if his party wanted more last-minute amendments, saying Mr Palmer should wear the political consequences of blocking the repeal.

‘‘What I do have concerns about is whether Mr Palmer is acting in the best interests of ... Australia,’’ he told ABC radio.

Mr Hunt said he had had "electronic engagement" with the crossbenchers over the weekend and had offered "some minor edits" to ensure any unintended consequences for businesses were removed.

"I know from my discussions with the Palmer team that they don't want to put impositions on small business," he told Fairfax radio.

"I expect that by the end of the week it will done and dusted and everybody will have lower electricity bills from Friday onwards."

A source close to Clive Palmer said although the amendments looked fine it would be up to Mr Palmer himself to approve them. He is holidaying in New Zealand. Independent senator Nick Xenophon said he would read them carefully before deciding how to vote.

The legislation is backdated to July 1, meaning some customers will get partial refunds on their electricity bills.

But they are unlikely to save anything like the $550 claimed by Prime Minister Tony Abbott at the Queensland Liberal National Party convention at the weekend.

"It's adding 9 per cent to your power bills, it's a $9 billion handbrake on our economy and it's costing average Australian families $550 a year," Mr Abbott said, referring to the carbon tax. "So it must go."

The $550 figure comes from Treasury modelling ahead of the introduction of the tax in 2012. But only $250 of it came from electricity and gas prices. The rest came from much smaller imposts on items such as food ($46), clothing ($29) and rent ($23). Many of the items modelled by the Treasury had price impacts described as "less than 10 cents per week".

The latest iteration of the legislation will include no penalties for businesses who don't pass their energy savings on, making a one-off saving of $250 per household more likely.

"I think that's an overestimate,” Climate Institute chief executive John Connor said on Sunday. "Gas prices are climbing sharply for reasons unconnected with the carbon tax, so it's unlikely there will be any cut in the gas price."

Australia's largest supermarket chain, Woolworths, has said that because it avoided price rises when the carbon tax was introduced there would be little room to remove them when it came off.

Coles says it is "working with suppliers to understand the implications of the change and if we identify any savings attributable to the tax changes we will pass them back to our customers".

Qantas has removed the carbon surcharge on domestic flights but says market conditions do not allow it to reduce its standard fares.

On Monday, Finance Minister Mathias Cormann refused to comment on the latest talks with Mr Palmer’s party.

‘‘We will persist until the job is done,’’ he told ABC radio.

Senator Cormann maintained that households would be $550 a year better off after the tax was repealed despite the Treasury modelling, saying that electricity costs flow through the whole economy and savings from scrapping the carbon tax would reach consumers.

Mr Connor said there should be a review, before repeal, of the real price impacts and benefits. It should be conducted by the independent Climate Change Authority chaired by the former head of Reserve Bank Bernie Fraser.

A bill to abolish the Climate Change Authority also comes up for debate on Monday along with an amendment from Palmer United senators that would enable it to recommend a move to an emissions trading scheme when enough other countries came on board.

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251 comments

  • Is today the day we’ll be able to pop the champagne and celebrate the end of the most useless, unnecessary and divisive tax we’ve seen in years ?

    Based on today’s Newspoll, where the majority of Australian simply want the carbon tax gone, there might be a few bottles of bubbly sitting on ice around the country.

    Commenter
    Hacka
    Location
    Canberra
    Date and time
    July 14, 2014, 6:53AM
    • Labor 54%
      Coalition 46%

      Its over for Abbott , people have stopped listening to pro coalition media propaganda

      Commenter
      Frank
      Date and time
      July 14, 2014, 7:45AM
    • Hacka, Celebrating, yes, especially those of us who work in Australia's declining Secondary Industries. We will be celebrating because a reduction of 10% of power prices will make our Industry more competitive. It will help keep jobs in for those Australians with lower education, or skills.

      Commenter
      Kingstondude
      Location
      Melbourne
      Date and time
      July 14, 2014, 7:48AM
    • In early with the falsehoods again, eh Hacka? Bask in your moment of bliss, because when people see that they've been lied to again by the LNP (when the promised windfall "savings" from axing the carbon price DON'T eventuate) we will have a real government back in power (and that won't be much longer, especially if Winky has the guts for a DD). I just hope all the damage your mob is doing can be undone - certainly our standing as a laughing stock worldwide because of the antics of Abbott and his team of buffoons will take longer to overcome.

      Commenter
      BC
      Date and time
      July 14, 2014, 7:49AM
    • Hacka, unfortunately they will be disappointed if they believe the removal of the carbon price will actually save them enough to afford a bottle of bubbly. Maybe they bought at Aldi?

      Commenter
      jofek
      Date and time
      July 14, 2014, 7:50AM
    • LOL Hacka....why do you want it gone so bad? What...to save $80 per year? Very sad you are hanging on to saving just $1.53 per week.....you must be very poor to be so desperate. Oh but wait......you will be losing $3000 per year from the very same govt's budget.....seems your logic has become a sad case of dementia.

      Commenter
      JT
      Date and time
      July 14, 2014, 7:53AM
    • Oh yes its wonderful to have a climate change denialist in charge (sort of). If you have a poll about any tax nobody of course wants it. I am glad if it is divisive Hacka; that is if I am divided from you on any issue whatsoever mate. Your comment is repulsive to me anyway. Popping champagne bottles over a backward step. Indeed.

      Commenter
      Tiny Montgomery
      Date and time
      July 14, 2014, 7:55AM
    • Based on today's Newspoll also...Abbott's approval rating is minus 31.....ha ha......LOL......based on that people will be cheering in the streets if the carbon tax doesn't go and Abbott has lost face with Gina and BHP.....LOL

      Commenter
      JT
      Date and time
      July 14, 2014, 7:55AM
    • @Hacka you are just hysterical.
      The majority of Australians, sadly, swallowed the lies about the ‘carbon tax’ hook, line and sinker thanks to Abbott’s cheer squad of shock-jocks and News Ltds vile campaign of mistruths.
      We saw the truth behind News Ltds ‘opinions’ yesterday when King Rupert declared the whole climate change thing “rubbish” said “we can’t mitigate” what’s happening and his solution was to “stop building vast houses on seashores.”
      The cost to deploy an Emissions Trading Scheme right now is negligible.
      When we are forced to implement one in a few years time it will be a massive hit.
      But then that will be a nice landmine laid by the LNP for the next in office won’t it?
      Then they’ll be able to sit on the benches in opposition and snipe saying ‘see, you let them back in office and the first thing they do is introduce a big, bad tax…’

      Commenter
      Rex
      Location
      Turramurra
      Date and time
      July 14, 2014, 8:02AM
    • The useless carbon tax that saw a fall in CO2 emissions from electricity generation. As each decade is warmer than the previous decade......as sea levels continue to rise......as CO2 levels pass beyond 400 ppm....surely an attempt to lower our carbon emissions is both good politics and good science. The division was from the climate deniers who screamed that the carbon tax would see life on earth come to a halt under the supposed wrecking ball through the economy.
      The carbon tax had a one off impact on the CPI of less than 0.7%. It was an attempt to use a price signal to lower carbon emissions. Price signals, like a medical co payment, are fine but price signals on carbon emissions are not?
      Once the carbon tax is gone, what environmental policies will the coalition have? We will be in a minority of one in terms of removing a working carbon tax/ETS. History will not be kind to the coalition. Our environment will now be one where carbon emissions will be seen as less of a worry. Welcome to the age of entitlement for the fossil fuel industry.

      Commenter
      Barry of Nambucca
      Date and time
      July 14, 2014, 8:03AM

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