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Carbon Tax Abolished; Senate Crossbenchers Back Government

The Senate voted today to abolish the carbon tax. Supported by the Senate crossbenchers, the upper house also brought to an end the emissions trading scheme legislated by the Gillard government.


The final vote was taken at 11.14am and passed by 39 votes to 32. The ALP and Greens senators opposed the repeal. With the independent Senator Nick Xenophon absent due to illness, the three Palmer United Party senators (Lazarus, Lambie and Wang), joined with Senators Muir, Leyonhjelm, Day and Madigan to kill the signature legislative achievement of the Gillard Labor government.

Media reports say the Environment Minister, Greg Hunt, texted Prime Minister Tony Abbott after the vote with the words: “Factum Est”, Latin for “it has been done”.

Abbott hailed the repeal as “great news for Australian families and for our nation’s small businesses”. He said: “Scrapping the Carbon Tax will save the average family $550 a year. You’ll see the benefits in coming power bills.”

At a press conference with Hunt, the Prime Minister said the Parliament had “finally listened”.

Listen to Abbott and Hunt (17m – transcript below)

Watch Abbott (17m)

Email from Prime Minister Tony Abbott, sent to Liberal Party email subscribers.


Transcript of joint press conference with Prime Minister Tony Abbott and Environment Minister Greg Hunt.

ABBOTT: If I could address a few words to the Australian people – you voted to scrap the tax in September last year and today the Parliament finally listened. Today, the tax that you voted to get rid of is finally gone. A useless, destructive tax which damaged jobs, which hurt families’ cost of living and which didn’t actually help the environment is finally gone.

With the carbon tax gone goes also a 9 per cent impost on the price of power, a $9 billion-a-year handbrake on our economy, and a $550-a-year hit on households’ budgets. The ACCC will be on hand, will be vigilant to ensure that the reductions in the price of power are passed on through our economy to the community, to families.

The carbon tax is gone, but it seems it hasn’t entirely been forgotten. Mr Shorten is out there today saying that if Labor is re-elected – the carbon tax comes back.

I only want to say this to my colleagues on the other side of the Parliament; surely, surely, it’s time to accept that the Australian people don’t want a carbon tax. Whatever it’s called – it’s still a tax and the Australian people don’t want it.

I should pay particular tribute to my friend and colleague Greg Hunt for his indefatigable work to bring this day about.

I should also thank Senator Eric Abetz and my other Senate colleagues for their consistent work to ensure that the people’s mandate has been respected in the Senate.

I should say that at the election we said to the Australian people, we said to you, that we wanted to build a strong and prosperous economy for a safe and secure Australia, and every day that is what we have been working to bring about.

We said – pre-election – that we would scrap the tax, build the roads of the 21st Century, get the Budget back under control and stop the boats.

I believe that we are purposefully, methodically, calmly working for you every day to deliver on our commitments. That is what I hope Australians have seen in this Government over the last 10 months – a Government which said what it means and is now doing what it says.

Again I would like to thank Greg and he has been absolutely relentless in this campaign and while none of this is about us – it is about delivering the right result for the Australian people – I think you, at least, Greg, are entitled to feel some pride today, so well done.

HUNT: Thanks very much, Prime Minister.

The Australian people voted on September 7th last year to repeal a tax which doesn’t work but which does do damage. It is a massive electricity and gas tax. At its heart, at its essence, it is about driving up the cost of living for pensioners, for seniors, for low-income families.

The tax was always intended to drive up the cost of living. That was its sole purpose, to drive up the cost of living so as to then, in theory, produce a result. The problem is it was a tax which didn’t do the job. It hurt families, but it has singularly failed to have any significant result on reducing our emissions. So, it is pain without gain and that’s why we took to the Australian people a pledge to not just remove the tax but to therefore reduce the pressure on their cost of living.

At the end of the day, this is about the small businesses, the manufacturing businesses, the families and the pensioners of Australia. There is a better way and we will deliver it – but this wasn’t the way.

The Productivity Commission was very clear: no other country has an economy-wide carbon tax or equivalent scheme, and that’s because no other country has looked at this scheme and deemed it to be acceptable.

QUESTION: Mr Hunt, is your [inaudible] on what the Senate does with direct action, or will the Government push ahead regardless?

HUNT: We already had the funding pass through the Budget. We have been successful in having the carbon farming initiative legislation passed through the House of Representatives and in due course it will be presented to the Senate and I am confident that we will find a way through that. Just as we did not stop until the carbon tax was repealed – we won’t stop until we have implemented the carbon farming initiative legislation and the better way.

QUESTION: Prime Minister, just to be clear, are you saying that never, ever should Australia have a price on carbon in any way?

ABBOTT: Well, what I’m saying is that we’ve just scrapped the carbon tax, and Bill Shorten is still committed to it. Whether it is a floating tax or fixed tax – it is still a tax. Bill Shorten having said he will terminate the tax now says he will go to the next election saying, “There will be a carbon tax under a government I lead.”

QUESTION: The Palmer United Party says that it won’t support direct action unless you agree to a framework for an emissions trading scheme starting at zero price. So will you support that?

ABBOTT: My understanding is that the Senate has already supported carbon farming initiatives and what we’ve always said is that the smartest way to tackle emissions is through more trees, better soils and smarter technology, and the carbon farming initiative is part of the better soils that we want to see supporting agricultural productivity and also reducing emissions.

So, look, what we’ve seen over the last few days is that just because people will start off with a particular position doesn’t mean that they end up with the same position. There is a constancy about this Government, if I may say so, but I don’t think there is the same constancy in other parts of the Parliament.

QUESTION: Prime Minister, you spent the last three or four years, almost every day, going out and telling the Australian community specific instances of products and services which would see an increase in price under the carbon tax. Do you feel now obligated to explain in just as much detail which products and services will come down in price?

ABBOTT: Well, the $550-a-year on average figure that we have been using was the figure of the former government based on Treasury modelling, and the former government was hardly going to exaggerate the price impact of the carbon tax. Now, that the carbon tax is gone, we expect the price impact to be passed through, the price reductions to be passed through and the ACCC has certainly been given stronger powers and more money to police that.

QUESTION: Prime Minister, is it the case, though, that at the moment Australia is in sort of environmental limbo without an actual mechanism for achieving our emissions reductions targets?

ABBOTT: I don’t accept that at all, Mark. We are a conservationist government. We are a Government which absolutely appreciates that we have only got one planet and we should pass it on to our children and grandchildren in at least as good shape as we found it.

So, we are a conservationist government and we will do what we think is the sensible thing to try to bring emissions down. What has gone today is not a policy to reduce emissions. What’s gone today is the world’s biggest carbon tax.

I mean, no country on earth, as the Productivity Commission made clear a couple of years ago, had an economy-wide emissions trading scheme or carbon tax, and so that international oddity, that international aberration has now gone.

QUESTION: Is direct action a long-term policy? If Australia has to reduce its emissions by more than 5 per cent – either before 2020 or after 2020 – can direct action do the job? And do you rule out any form of carbon pricing in the long term as the task gets harder?

HUNT: Can I just say that direct action is a long-term policy. It is designed to be flexible. It is very clear that you can reduce emissions – we will reduce emissions. We will do it without a carbon tax because at the end of the day pushing on electricity and gas prices has been an utterly inefficient way, as well as an utterly unfair way of trying to reduce our emissions.

So, we’re committed to the long term. Let’s be optimistic here, and I think realistically optimistic, because we’ve seen the carbon farming initiative legislation go through the House. We have seen the funding go through as part of the supply bills. We have seen the Green Army which is a half-a-billion dollar project go through with bipartisan support. We’ve now seen the carbon tax repeal go through the Senate. And of course all of these were deemed to be impossible at different times. All have been achieved.

So, we will keep going and this is a policy for the long term.

QUESTION: How soon can you start dispersing money to polluters and under direct action you’ve appropriated the money as you’ve said. Do you need everything done first or can you start paying people?

HUNT: Well, let me correct a presumption in the question. The ALP, of course, gave $5.5 billion to brown coal generators and was still giving it without any strings attached – $9.2 billion to aluminium and steel and cement without any string as attached. We’re not giving any funds out unless there is a real and genuine emissions reduction. We are purchasing emissions reduction and once the legislation is through the Senate, then we will be in a position to take the steps that we propose.

QUESTION: Just as a follow-up, you can’t do that by regulation?

HUNT: I’m not going to contemplate other mechanisms. We have a plan A and we are sticking with plan A.

QUESTION: So, should it always be up to the Government to pay essentially for emissions reductions, it shouldn’t be up to the market or to people?

ABBOTT: We have got an incentive-based system, not a penalty-based system. We think we’ve allocated an appropriate amount of money from the Budget to tackle this issue. It is a very important issue. It is not the only important environmental issue. It is certainly not the only big issue which our country is grappling with and world is grappling with. We think this is the sensible way forward and let’s face it, we didn’t just take it to the 2013 election – we took it to the 2010 election too. I think that the Parliament should respect the mandate that we’ve got to do it.

QUESTION: Prime Minister, during the campaign, you actually campaigned on axing two taxes, the mining tax as well. How confident are you that you will be able to get the same result as you’ve got with the carbon tax?

ABBOTT: Well, I’m confident, Dennis, that we will ultimately get the right result. I’m not necessarily confident that we will get the right result tomorrow or next week, but I am confident that we will get the right result because how can you scrap the mining tax and not scrap the spending that was associated with it? We were always absolutely upfront with the people before the election; we said we would scrap the carbon tax, we would scrap the school kids’ bonus, we would scrap the low-income superannuation payment, we would scrap the low-income support payment. Not because we are indifferent to the plight of parents with kids at school but because you can’t give what you haven’t got. If the tax is going, the spending which is supposed to be funded by the tax has to go as well.

So, we were very upfront with people about this, and I note that even the Labor Party now, when it is in Western Australia, says that the mining tax must go. I suspect they will have a different tune in Canberra, but nevertheless in the West they’re against the mining tax. In Canberra they’re in favour of it. Just like before the election they were against the carbon tax, after the election, they’re in favour of the carbon tax.

As I said, just at the moment, Bill Shorten is promising to go to the election saying “There will be a carbon tax under any government I lead.” I suspect he might change his tune on that at some stage, too.

QUESTION: How do you explain the inconsistency though in that argument when you have now abolished the carbon tax but you are, through your policies and also through the actions of the Senate but largely through your policies, maintaining the compensation for the carbon tax that no longer exists?

ABBOTT: But again, we said prior to the election that we would abolish the tax but you would keep the associated tax cuts…

QUESTION: [Inaudible] with respect?

ABBOTT: We have a whole series of policies which impact on the fiscal position and you’ve got to judge the totality of our policies and under our policies you’ll get a Budget that’s back to balance – more or less – within four years, and you’ll get peak debt $300 billion less than under the policies of the former government.

So, I am very confident that because of the other savings associated with this Government’s policies that we can scrap the carbon tax while at the same time ensuring that the tax cut and the pension increase is a real increase and a real tax cut because it’s not eaten up by the carbon tax.

QUESTION: But it does mean it costs the Budget $7 billion over the forward estimates.

ABBOTT: But if you look at the total fiscal position under us, in year four you take a projected deficit under Labor policies of $30 billion plus back down to under $3 billion and that is why what we are doing is long-term economic repair and long-term Budget repair, because by sensible savings we bring the Budget back to balance while at the same time liberating our economy from job destroying taxes like the carbon tax and the mining tax.


QUESTION: Prime Minister, just to clarify because I’m not sure that you answered it, do you rule out ever introducing a carbon pricing mechanism?

ABBOTT: Well, we’re certainly not going to do anything that damages our economy or that puts our people and our businesses at an unfair competitive disadvantage. We’re never, ever going to do that. We stand up for Australia. We stand up for Australia and that was the problem with the former government – they would rather curry favour with The Greens, they would rather harvest Green preferences than do the right thing by Australian workers and Australian families.

So, what it means is that we are going to do the right thing by Australia, and doing the right thing by Australia means scrapping the carbon tax, scrapping the mining tax, getting the Budget back under control and never, ever doing anything which is going to put our country, our businesses, our workers, our families at an unfair disadvantage compared to those elsewhere. That is our position.

Thank you.

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Malcolm Farnsworth
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