OPINION: The Crippling Cost of a Carbon Tax

As appeared in the Daily Telegraph on 29 April 2016

 

‘Here we go again’.  It’s been 20 years since Paul Keating uttered those words, which ultimately saw John Howard sweep to victory in a landslide election in 1996.  

 

Unfortunately, Labor seems to have applied Mr Keating’s ‘here we go again’ mantra to the carbon tax policy rejected by the voters at the last election, with a new policy for a carbon tax by another name that seeks to cut emissions by 45% by 2030. 

 

Labor’s new carbon tax policy has been forecast to cost hundreds of billions to 2030, wreaking havoc on our economy. In August last year, former Reserve Bank member and ANU Professor Warwick McKibbin stated in a national radio interview: ‘By the time you get to 2030, if you assume that the modelling projections on what GDP would otherwise be is roughly right, you are talking around $150 [billion] to $200 billion for the 26 per cent target, and you are talking for the larger target of 43 per cent, you are probably talking around $300 to $400 billion.’

 

As well as the national threat, Labor’s proposed new carbon tax policy represents a serious economic threat to NSW.  It would create a self-­imposed competitive disadvantage on some of our state’s most successful industries, including mining, while our global competitors capture investment dollars originally bound for our shores.

 

For example, coal is our State’s most valuable export commodity. It supplies around 85 per cent of our electricity, directly provides over 20,000 jobs, and supports tens of thousands more. Coal mining also underpins the economic strength of key regions of our state like the Hunter and the Illawarra. 

 

Labor’s new carbon tax policy would hurt mining in NSW, threatening our state’s most valuable export, and the billions of dollars of mining royalties that helps to fund schools, hospitals and public transport. 

 

Just like last time, electricity prices would rise for households and businesses. Many thousands of mining jobs would also be threatened, as well as the jobs of those working in the thousands of businesses that supply the mining sector right across NSW, from western NSW to western Sydney.  

 

The NSW mining industry recognises the need to minimise the impact of our operations, including through lower emissions. But this should not be at any economic cost, nor does it have to be.

 

At the recent Paris Climate Change Conference, the Prime Minister took a responsible and balanced approach to climate change issues and energy provision.  Emissions reduction technology was central to the Government’s approach, as part of a balanced strategy to meet the needs of an energy hungry world while at the same time safeguarding our economy and helping to reduce pollution and emissions.

 

New technology being used in our region to reduce emissions includes High-Efficiency, Low Emissions (HELE) coal fired power stations currently being deployed across many of the countries of South East Asia. These advanced technology power plants produce more electricity with less coal, and therefore fewer emissions. These new power plants work best with the high quality low ash coal types produced in NSW, providing economic opportunity for NSW while delivering lower global emissions  

 

Labor’s new carbon tax policy, backed by the Greens plan to shut down all coal mining in NSW, would threaten this opportunity. It would damage our export trade, drive up electricity prices, cost jobs, and send NSW into a deep and prolonged recession, or worse. Put simply, it’s a plan to lower our emissions by killing our economy.