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Combet hints at help for transport under carbon tax

Climate change minister hints at help for transport operators under the Federal Government's proposed carbon tax

By Brad Gardner | April 13, 2011

The Federal Government has hinted that it will introduce measures to shield transport operators from rising fuel costs under a carbon tax.

Climate Change Minister Greg Combet today told the National Press Club he is using the framework of the scrapped Carbon Pollution Reduction Scheme (CPRS) “as the basis for our current consultation with business” on the tax, which is due to begin in July 2012.

The CPRS, shelved last year by former Prime Minister Kevin Rudd, would have cut the fuel excise by one cent for every one cent rise in petrol prices due to emissions trading.

The measure was due to last for one year for the trucking industry.

“The Government will continue to work with the business community, especially on the important issues facing the emissions intensive, trade exposed sector, the coal industry, and the energy sector,” Combet told the Press Club.

“It will be important, however, that there is perspective and facts in that debate, and a recognition that the Government must act in the national interest, not sectional interests.”

The Australian Trucking Association (ATA) has been given a seat at the negotiating table along with groups from the automotive, farming and mining sectors.

The Livestock and Bulk Carriers Association wants the ATA to argue for any increases from a carbon tax to be offset by reductions to the diesel excise.

Combet told the Press Club less than 1,000 companies will pay the tax and that the Government needs to address climate change.

“The evidence of atmospheric warming is very strong, and the potential for dangerous climate impacts is high. The scientific advice is that carbon pollution is the cause,” Combet says.

He says more than 50 percent of the revenue raised by the carbon tax will be funnelled back to low and middle-income households to help them deal with price increases.

Combet says the assistance will be permanent and that many households will be better off once the carbon tax is introduced.

“There will be generous assistance for households to meet costs that may be passed on by the companies that are paying for their pollution. Assistance for pensioners and low and middle income households will be a priority,” he says.

To be introduced on July 1 next year and to run for three to five years, a carbon tax will require companies to pay a fixed price to pollute.

The Government’s climate change advisor, Professor Ross Garnaut, recommends transitioning to an emissions trading scheme in 2015, which will allow the market to set the permit price based on supply and demand.

Garnaut has recommended a starting price of between $20 and $30 per tonne of carbon dioxide, with the price rising by 4 percent annually. He says fuel prices will increase by between five and seven cents a litre.

Combet says Treasury modelling on the carbon tax is due to be completed by the middle of the year, while the Productivity Commission’s look at carbon prices in other economies will be finished late next month.

He says a carbon tax will promote low-emissions technologies, encourage people to use energy more wisely and lead to energy-efficient buildings.

Nationals leader and opposition spokesman on transport Warren Truss earlier this week warned regional trucking operators would suffer a greater burden than their urban counterparts under a carbon tax.

He claims the scheme will do nothing to alter fuel use because regional operators have no alternative to switch to.

“Fuel use in regional Australia is inflexible and unresponsive to price movements because there are no alternatives. The ability to change vehicles or switch fuel technologies is limited at best,” he says.

During his speech, Combet accused Opposition leader Tony Abbott of running a scare campaign on the carbon tax and trying to wreck efforts to address climate change.

“He will be exposed for his misrepresentation and misinformation in claiming that consumers will bear all the costs and never mentioning the Government’s commitment to provide assistance. He will be exposed for falsely spreading fear about job losses,” Combet says.

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