Carbon Tax to hit WA hard: Barnett

August 6, 2012 By CH Lee -

The Premier Colin Barnett says Western Australia will be hit hard by Federal Government’s carbon tax. The government has set a carbon price at $23 a tonne, and that will rise by five per cent a year before moving to a market price in three years. The aim is to cut emissions by five per cent by 2020 and 80 per cent by 2050.Some of the dirtiest coal fired power generators could be paid to close.

Mr Barnett says he doubts the Federal Government will achieve its emission reduction aims. He says he holds serious concerns for Australia’s manufacturing industry because he believes some businesses will close down rather than trying to become more energy efficient. Mr Barnett says the government should have taken more direct measures such investing more in public transport.

As expected, WA’s Chamber of Minerals and Energy has criticised the plan, which it says will drive mining investment overseas. The chamber says Australia should have waited for other major emitters to take action before implementing its own plan. But the Federal Government is standing by its package and the numerous incentives that come with it.

To help business deal with the change, it is promising a $1.3 billion package for the coal industry, $300 million for the steel sector and $1.2 billion to help manufacturing. The government’s also agreed to give emissions intensive industries such as aluminium, steel and zinc 94 percent of their carbon permits for free.

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For households, the tax is expected to push up costs by an average of $10 a week, largely because of increased electricity and gas prices. But there will also be a range of measures to help households.

The government will triple the tax free threshold to more than $18,000 and will deliver two tax cuts, one next year, and another in 2015. Support payments such as the family tax benefit and pensions will be increased and a large part of that will be paid upfront, before the tax takes effect.

The carbon tax announcement did receive the backing of the West Australian Council of Social Service. In particular, it welcomed tax cuts and increased payments to low income earners. Overall, the carbon package will cost the budget nearly $4 billion over the next four years.

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