Courtesy of Piers Akerman/Daily Telegraph:
For more articles by Piers go to; http://blogs.news.com.au/dailytelegraph/piersakerman/
Piers Akerman –, Thursday, April, 18, 2013, (6:47am)
THE collapse of the price European carbon tax has exposed the fraudulent basis for the Labor-Green-Independent carbon tax.
It makes no sense.
The European Union price has plummeted to around $3-a-tonne while the Australian government’s fixed price is $23-a-tonne and due to rise again to $24.15-a-tonne from July 1.
What an utter farce.
Blind Freddy can see that Australians are being hit with an unfair burden while their global competitors are laughing.
Business is finally screaming after spending years in bed with the Rudd-Gillard government.
Yesterday, both the Business Council and the Australian Industry Group slammed the government.
BCA president Tony Shepherd declared it “ridiculous” that Australian businesses faced a $23-a-tonne carbon price while the Europeans faced a price just above $3 a tonne.
AI Group chief executive Innes Willox said the EU parliament’s vote to keep carbon prices low highlighted “how far out of kilter Australia’s high fixed carbon prices are”.
“Linking internationally and abolishing the fixed-price carbon tax now would cut the carbon price by 80 per cent to $4, reducing electricity prices by more than 1.5c per kilowatt hour and taking pressure off trade-exposed industries and households,” he told The Australian, which has today’s best coverage on the price crash and its implications for the nation.
Australian Chamber of Commerce and Industry economics director Greg Evans described the Australian scheme as “economic recklessness” and said it should be scrapped.
Minerals Council of Australia chief executive Mitch Hooke declared the scheme was now “untenable”.
The immediate effect of the price collapse will be a $6-$10 billion hole in Treasurer Wayne Swan’s next Budget.
Just goes to show what a complete house-of-cards Labor’s budgeting has always been.
Climate Change Minister Greg Combet desperately hopes something will force up the European price of carbon.
That is, he wants the market to manipulated.
More phony interfering with an unnatural market.
Opposition Treasury spokesman Joe Hockey said the budget was in “chaos” and faced a $7bn revenue hole.
University of Wollongong economics professor Henry Ergas predicted a $5.3bn revenue hole in each of the 2015-16 and 2016-17 years based on the collapse of the European carbon price to about $5 a tonne. Professor Ergas said that, by pricing carbon at less than $5 a tonne, the market was providing an indication of where it believed prices were headed.
“It was a foolish scheme to begin with,” he said. “It makes no sense to have a high price now and a low price in future . . . there is no benefit to the environment or to the economy.”
The government’s scheme budgets for a $23 a tonne price in 2012-13, rising to $24.15 in 2013-14 and $25.40 in 2014-15. The carbon price will be linked with the EU scheme from July 2015 and the price will float.
In last year’s budget, Treasury predicted the carbon price would be $29 a tonne in 2015-16, providing projected revenues of $6.7bn.
In sticking with the $29 figure, Treasury acknowledged that prices had fallen but cited potential EU “policy options to increase the current low prices in the EU ETS, with implications for international carbon markets”.
On Tuesday night the European parliament rejected a proposal – by 334 votes to 315 – to postpone the sale of 900 million permits aimed at propping up the price. The price immediately fell 50 per cent to a low of $3.23.
ACCI’s Evans said the collapse of the European price “shows the scale of the economic recklessness of imposing a carbon tax of $23 a tonne on Australian industry and consumers”.
“The highest carbon price in the world is taking its toll on domestic industry with investment and jobs starting to move offshore in a number of energy intensive industries and smaller more vulnerable businesses,” he said.
Hooke said the $23 carbon tax was untenable, “as it locks in a huge competitive disadvantage against the only other economy-wide carbon pricing scheme, and an even larger hit compared with most other competitors with no carbon price at all”.
“This futile millstone around the neck of Australian exporters should be scrapped,” he said. “There is a better way to price carbon to manage the challenge of climate change.”
The reality is the carbon market is artificial. It was designed by Greens and global warmists not in any known market-place.
It’s just hot air.