It may be time for Australia to start preparing for Carbon Tax Version Two following the announcement yesterday that the Palmer United Party (PUP) is seeking the introduction of a new Emissions Trading Scheme (ETS).
PUP, which holds the balance of power in the Senate and has the deciding votes to abolish the carbon tax, confirmed yesterday it would not support the government's $2.5 billion Direct Action Plan.
PUP Leader Clive Palmer will only support legislation to repeal of the carbon tax if key climate change bodies are retained, and an ETS with a zero-dollar starting price is put in place.
Prime Minister Tony Abbott called an urgent breakfast meeting with Palmer today to discuss the new conditions although
he did welcome confirmation PUP will support legislation to remove the carbon tax.
Palmer said the parameters of the ETS would be based on the action of Australia's leading trading partners such as
China, the United States, the European Union, Japan and Korea.
He said PUP will oppose the abolition of the Clean Energy Finance Corporation and the Climate Change Authority and
stop the Prime Minister making any changes to the Renewable Energy Target which mandates that 20 per cent of energy must come from renewable sources by 2020.
The Labor Party's original plan was to move from a fixed carbon price to an ETS in 2014 and the Australian Greens said
they welcomed Palmer's announcement.
However, business groups were not impressed they want to see the swift repeal of the carbon tax to minimise the complexities of backdating its removal to July 1.
The Australian Industry Group and the Business Council of Australia said delaying removal of the tax is unacceptable:
"The groups are urging senators, many of whom were elected on a platform of repealing the carbon tax, to honour
their commitments to their constituents and remove the impost, which is making our key industries less competitive
every day it stays in place,” they said. “Delaying repeal would not achieve anything for the environment, but
would simply expose businesses to higher electricity prices and costs they cannot recover from July 1, 2014.”
Legislation to abolish the carbon tax and the Clean Energy Finance Corporation has made it through the House of
Representatives but is being held up in the Senate.
Last week the government introduced legislation to parliament to implement the Emissions Reduction Fund, the centrepiece of the Coalition's Direct Action Plan.
Introducing the Bill, Environment Minister Greg Hunt said the Clean Energy Regulator will administer the ERF and will
be able to enter into contracts worth up to $2.55 billion from the commencement of the Fund, with further funding to
be considered in future budgets.
The ERF has undergone an extensive consultation process with the more than 250 submissions received on the Terms of
Reference and more than 340 on the Green Paper.
