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Australia's new carbon tax -

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Australia's new carbon tax

Broadcast: 24/02/2011

Reporter: Matt Peacock

Today the government unveiled plans to introduce a price on carbon.


HEATHER EWART, PRESENTER: Prime Minister Julia Gillard today unveiled plans to introduce a fixed
price on carbon emissions by June next year, with a transition to an emissions trading scheme after
that. It's a move with big implications for the price of everyday staples, including power, petrol
and groceries. Opposition Leader Tony Abbott described the announcement as an utter betrayal of
Labor's election commitment not to introduce a carbon tax and vowed to fight it every second of
every day. Matt Peacock reports from Canberra.

MATT PEACOCK, REPORTER: All carbon emissions, including even cars and trucks, will be in this price
on carbon. An emissions trade across transport, energy, industry, but not agriculture, to be phased
in after an initial annual fixed rate.

JULIA GILLARD, PRIME MINISTER: I'm determined to do it, because climate change is real. We have
never before lived with so many people on the planet emitting so much carbon pollution.

TONY ABBOTT, OPPOSITION LEADER: Utter betrayal of the Australian people. And if the Australian
people could not trust the Prime Minister on this, they can't trust her on anything. She made a
solemn commitment to the Australian people before the election.

MATT PEACOCK: This is what Julia Gillard said.

JULIA GILLARD: There will be no carbon tax under the government I lead.

TONY ABBOTT: Like some latter day Lady Macbeth, would consider this statement, "There will be no
carbon tax under the government I lead," and this latter day Lady Macbeth will be saying, "Out, out
foul spot! Out, out foul spot!" But she said it and she will be judged by it, Mr Speaker.

MATT PEACOCK: But that was then. A hung Parliament has led to this multi-party climate committee
and today's announcement, relying on independents and some apparently happy Green support.

JULIA GILLARD: If you put a price on something, then people will use less of it. At the moment it
is free to emit carbon pollution. If we price carbon pollution, then people will find ways of
emitting less of it because they won't want to pay the price.

BOB BROWN, GREENS LEADER: This is a hybrid process for a fixed price to move to a cap and trade
system, which we actually developed from Professor Garnaut's ideas some 12 months ago.

MATT PEACOCK: The fixed carbon price would last between three to five years before moving to a
market rate, but that move's by no means certain, subject to a review a year out and depending on
other international action and treaty targets.

It's Climate Minister Greg Combet whose job it is to negotiate all the details of what he admits is
effectively a tax.

GREG COMBET, CLIMATE MINISTER: Big polluters will be paying a carbon price for the pollution that
they emit, but the purpose here of course is to provide the incentive to cut their pollution levels
and to drive investment in clean energy.

MATT PEACOCK: It's a tax, though, isn't it?

GREG COMBET: Look, this is a carbon price through a market mechanism. With the first three years of
the market mechanism, at least between three and five years, being a period where there is a fixed
price, and in effect, that will operate like a carbon tax. But the clear intent is to move to
emissions trading as quickly as we can.

MATT PEACOCK: But three years on, if the international conditions don't square up, it could just
stay as a fixed rate?

GREG COMBET: Well it's important to have the opportunity a few years down the track to have a look
at the international circumstances and what obligations the Australian Government may have in any
international agreement that emerges.

MATT PEACOCK: It's lead in industry saddlebags, according to the Australian Confederation of
Commerce and Industry's Greg Evans.

GREG EVANS, AUST. CONF. OF COMMERCE AND INDUSTRY: We can assure the Government that none of our
members, our 350,000 members, are actually queuing up to pay higher energy prices, especially where
the environmental gain associated with the carbon pricing is negligible.

MATT PEACOCK: Industry compensation is yet to be agreed, so too is compensation for the poor. But,
if it's enough, Australian Council of Social Service to supports a carbon price.

AUST. COUNCIL OF SOCIAL SERVICE: It's very important that the country comes together at this time
to finally start to tackle carbon pollution in our country.

MATT PEACOCK: For the Government to pass this into law it will need crossbench support, and even
the two independents on the climate committee appear to differ.

ROB OAKESHOTT, INDEPENDENT: I certainly support the release of this document and if I had to vote
on it tomorrow I would.

TONY WINDSOR, INDEPENDENT: All options are on the table. This is a framework to work within. We've
made progress. Obviously there'd have to be agreement in both Houses of Parliament of a model that
we all agree with. We haven't seen that model yet, and I'm sure there'll be arguments and issues
raised. Nothing's settled in my view.

MATT PEACOCK: There'll be many more twists and turns before any carbon price becomes law. This will
be the Government's biggest battle, and it's only just begun.

HEATHER EWART: Matt Peacock with that report.