Vol. 75/No. 31      September 5, 2011

Ostensibly to reduce carbon emissions into the atmosphere by taxing “the 500 big polluters,” the cost of the tax will be passed on to working people, adding to the already rising cost of living as the global economic crisis worsens.

Electricity and gas bills will increase by an estimated 15 to 20 percent after the tax is introduced. Food and transport costs will also rise. Truckers will face an extra levy on fuel after two years.

While diesel fuel for agriculture, forestry, and fisheries is exempted, working farmers will face extra costs for fertilizer, transport, processing, and grain storage. The National Farmers Federation predicts AU$1,500 per year in extra costs for an average farm (AU$1=US$1.04).

A “carbon price” starting at AU$23 per ton is to be levied on the content of fossil fuels—coal, petroleum, and natural gas. The carbon price is to be floated by 2015 as an emissions trading scheme, under which companies buy and sell permits to emit a certain quantity of pollutants.

Support for such a plan among the propertied ruling families is receding. International trade in sham “carbon credits,” initially at lucrative prices, has stalled since the 2008 financial crisis.

Support for the Labor Party government has fallen with the carbon tax and other unpopular measures. For instance, a “flood levy” was imposed to cover compensation for those hit by the recent Queensland flood disaster in February.

The Liberal-led opposition to Labor has capitalized on this discontent, backing rallies against the carbon tax that have drawn thousands. A “Say Yes!” campaign—backed by celebrity film stars, union officials, and the Greens—has held similar rallies in support of Labor’s new tax.

Amid debate on its new tax, the Labor government moved to offer AU$9 billion in subsidies for big business. Aluminum, zinc, and steel manufacturers will get 95 percent of their “carbon permits” for free. The government will grant hundreds of millions of dollars to big steel and coal corporations.

Gillard’s scheme also promises some tax relief and other “offsets” for “low income families.”

The 2008-2009 international recession was lessened here by renewed exports, mainly iron ore and coal to China, Australia’s largest trading partner. But despite a mining boom much of the Australia’s economy is stagnating, with manufacturing, retail, and tourism in a steep downturn.

The Australian voiced the rulers’ unease on this combination of “boom and gloom” in a July 26 editorial. “Rather than address the problems of the two-speed economy, Julia Gillard has staked the country’s future on a carbon tax that will add to household costs and could threaten trade-exposed industries,” the paper wrote.  
 
 
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