Australia's carbon tax harms resources boom
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Australian Prime Minister Julia Gillard's carbon tax threatens the resources boom and could cut more than 23,500 jobs this decade, mining companies warned on Monday.
Earlier, the federal government announced its plan to introduce a fixed tax on carbon products from July 2012. The carbon tax will then morph into an emissions trading scheme in three or five years time.
In submissions obtained by The Australian newspaper, the Minerals Council of Australia (MCA) cited government modeling, warning that coal mining output would fall 35 percent by 2020 and investment would fall 13 percent due to the carbon tax.
The submissions said the design of the carbon pricing scheme threatened the resources boom and could cost the industry 33 billion U.S. dollars over the period to 2020, threatening an investment pipeline worth 154 billion U.S. dollars and contradicting the government's strategy of "maximizing the opportunities of the Asian century."
However, Trade Minister Craig Emerson on Sunday said that if Australia failed to put a price on carbon, penalties such as border tax adjustments could be slapped on Australian industries.
Seizing on revelations that Qantas Airways would be forced to pay a tax on its carbon emissions by the European Union, because Australia did not have a carbon price, Dr Emerson said similar moves would "ramp up in the absence of a carbon price" to hit other exporters.
There would be "pot shots being taken at Australia because we would be one of the few countries that didn't put a price on carbon," Dr Emerson said on Sunday.
In response, MCA challenged the government's claim that Australia is lagging the rest of the world, arguing Australian efforts to cut the emissions intensity of the economy have outperformed Europe and the United States.
The council's submission challenged the notion that the European Union's (EU) emissions trading scheme is out in front of Australia, arguing that the EU's ETS makes 164 industry sectors eligible for up to 100 free permits from 2013 to 2020.
MCA said even non-trade-exposed industrial firms in the EU will receive 80 percent of permits free in 2013 and will not be required to buy all their permits until 2027.
"The difference between the Australian and EU schemes is highlighted by the fact that the Australian scheme, if set at 27.5 U.S. dollars per tonne, will raise more tax from liable Australian companies in its first three months than the EU's emissions trading scheme generated since its launch more than six years ago, " the submission said.
In the absence of a global emission scheme, MCA urged for a redesign of the carbon pricing scheme with the allocation of at least 94.5 percent free emissions permits to trade-exposed firms.
