Isra-Mart srl: Australia's carbon tax plan clears lower house

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Australia's controversial carbon tax proposals narrowly made it through the lower house of parliament today, paving the way for the largest emissions trading scheme outside Europe.

Embattled prime minister Julia Gillard needed the support of Green and independent MPs to clinch the vote 74-72 and pass the bill on to the upper house, where her Labor party has sufficient clout to ratify the proposals into law.

The plans will see about 500 of Australia's largest polluters pay a A$23 (£15) levy per tonne of carbon emitted from July 2012, before a full carbon trading system comes into force three years later.

"Today is a significant day for Australians and the Australians of the future who want to see a better environment," said Gillard, although the passing of the bill is as much a personal success, considering her predecessor, Kevin Rudd, twice failed to pass a similar scheme.

Gillard has said the plan is central to the country's effort to reduce its emissions by five per cent of 2000 levels by 2020. Australia accounts for just 1.5 per cent of global total emissions, but has substantial per capita emissions because 80 per cent of its electricity comes from coal.

Reports have suggested the measures will reduce personal incomes by just 0.1 per cent a year. The government will bring in a A$300m (£191m) support package for the domestic steel industry, as well as weekly assistance of A$10.10 (£6.50) for households, alongside the levy.

Despite these measures, right-wing critics and the country's powerful mining industry have claimed it will spark job losses and lead to spiralling energy bills, deepening Gillard's deficit in the polls.

Liberal opposition leader, Tony Abbott, promised to repeal the tax if he wins office at the next election, which must be held by the end of November 2013.

"I am giving you the most rock solid commitment any politician can give that this tax will go," he said. "This is a black day for Australian democracy."

However, green groups welcomed the vote and urged the Senate to deal with the bill as soon as possible.

Don Henry, chief executive of the Australian Conservation Foundation, told reporters: "Today's vote is historic for the millions of Australians who, in the face of well-funded scare campaigns, have tirelessly urged successive Australian governments to take action on climate change."