Monday, June 30, 2008

The design of Australia's emissions trading scheme is becoming clearer by day.

In an early indication of the government’s thinking about the shape of Australia’s emissions trading scheme, the Treasurer Wayne Swan has guaranteed that none of the money it raises will go into consolidated revenue.

“Every cent” raised from the sale of emissions permits would be used “to assist either households or the business community with the impacts of this scheme,” he told the Channel Nine Sunday program.

“There is no doubt that there will be some revenue raised and it won't be used for any other purpose other than to ensure the scheme has integrity and those people who need assistance, will receive it,” the Treasurer said.

His remarks are first indication of the government’s thinking about the likely design of the scheme which is being kept under wraps until Wednesday July 16 when it will be outlined in a green paper to be launched by the Climate Change Minister Penny Wong at the National Press Club.

The Treasurer also denied a weekend newspaper report that suggested that the Cabinet’s climate change subcommittee had decided that the scheme must result in no net increase in the price of petrol...

The report said that should petrol be included in the scheme, the subcommittee had decided that petrol excise would be cut to offset the resulting price increase.

Mr Swan said Cabinet had “not made that decision this week”.

“We have not reached our final positions, that is what the Cabinet is doing at the moment, but all of our approach will be outlined in the green paper,” he said.

Pressed as to whether petrol would be included in the scheme as will be recommended by Garnaut Review of Climate Change which reports on Friday the Treasurer replied: “I am not ruling anything in and I am not ruling anything out”.

The Opposition Leader Brendan Nelson said yesterday that if petrol was included in the scheme put forward by the government it was “highly likely” that the Coalition would oppose it.

“I suspect there is a high probability that we will not support what the government may actually choose to do,” Dr Nelson told the Ten Network.

“We are Liberals - we generally believe in market solutions, and that’s why we supported an emissions trading scheme in government, and we believe that's the way to go forward. But in terms of also principle, it is extremely important, particularly when petrol is around $1.70 a litre, that the Government in its policies and implementing its policies in relation to climate change, does not as a direct result of the introduction of them, increase the price of petrol,” he said.

“We cannot in ourselves solve the problem of climate change, but we can do enormous damage to our environmental and our economic future if we get this wrong. My real concern at the moment is that the Government, internally, is very much like the Whitlam government – it is confused, it is disordered, there is deep splits and divisions within the Government, within departments and individual ministers about the way to go.”

The emissions trading is due to start in mid-2010, with the final outline of the legislation in place by the end of this year.

Dr Nelson said that the timetable was too tight.

”Introducing an emissions trading scheme and adjusting to climate change will make, for example, the introduction of the Goods and Services Tax look like a walk in the park, and that was an extraordinarily complex process, economically, technically, and indeed politically.”

“I am very concerned about Australia's best interests not being served by them trying to ram it through.”