Australia carbon scheme faces growing opposition

Reuters News
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Posted: Apr 17, 2011 10:55 PM
Australia carbon scheme faces growing opposition

SYDNEY (Reuters) - Opposition to Australia's planned carbon tax is swelling with almost 60 percent of voters against the plan and major food retailers, miners, energy and agriculture firms writing letters to the prime minister opposing the tax.

The Australian Food and Grocery Council said the carbon tax would increase the cost of food and grocery manufacturing, while the Business Council of Australia said it could damage the country's export competitiveness and drive production offshore.

One letter to Prime Minister Julia Gillard, signed by 45 mining, energy, agriculture and food firms, said they have no capacity to pass on carbon costs, with rising input prices due to supply chain problems after major floods in eastern Australia and the high Australian dollar.

As business executives stepped up their campaign against the tax, voters also grew increasingly hostile as they feared that the tax would raise the cost of everything from food to electricity.

A poll of 1,400 people, carried out at the end of last week and published in Fairfax newspapers on Monday, found that 59 percent of respondents opposed the plan, up 3 percentage points from the last survey in March.

A letter by the Business Council said a carbon policy without adequate compensation for Australian industries could force production to move offshore to countries with less rigorous climate policies.

It also said that a carbon tax would have limited impact on global greenhouse emissions as Australia only accounts for around 1.5 percent of emissions.

"In framing our carbon pricing policy Australia should act in tandem with international action, not ahead of it," said Council president Graham Bradley, in a letter made public on Monday.

"To do otherwise means that important manufacturing, agricultural and resource-based businesses will be disadvantaged."

Gillard's one-seat Labor government wants the carbon tax to start in July 2012, with a move to an emissions trading scheme three to five years later, in order to curb emissions and fight global warming.

A carbon price is yet to be set, but media reports suggest the government wants a low price of around A$20 ($21) a tonne.

Emissions-intensive exporters such as steel companies BlueScope and OneSteel and the coal industry have already raised concerns that a carbon tax would hurt their international competitiveness and cost thousands of jobs.

Trade unions, traditional supporters of the ruling Labor party, have also voiced growing concerns at the tax, warning they would not tolerate job losses.

(Reporting by Mark Bendeich; Editing by Alex Richardson)