Isra-Mart srl: Aussie carbon tax 'a challenge' for NZ

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A new carbon tax in Australia will set New Zealand a challenge to look again at its Emissions Trading Scheme, Australian Greens leader Bob Brown says.

At the New Zealand Greens conference in Auckland today, Brown said a tax was likely to be levied on around 1000 of the biggest polluting companies across the Tasman, rather than on households.

From July his party will hold the balance of power in Senate, and to a lesser extent in the lower house, and are negotiating with Julia Gillard's Labour government over carbon pricing.

New Zealand has a compulsory ETS with different "entry dates" for various sectors. Agriculture joins in 2015, but a review is due to be finished at the end of the month which is likely to push that out.

Brown said the proposed Australian Greens system would be more efficient and cost less.

"It's interesting looking at the New Zealand system. It's not a cap-in-trade system like we are looking at. It was made to include forests which are not going to included in the Australian system.

"If we are successful with the carbon price system covering the whole of the economy in Australia, as we hope to, I think it will be a more efficient system than the one that New Zealand has at the moment."

But a move to a carbon tax in Australia would not directly impact on New Zealand, he said.

"But it will challenge New Zealand to look again at the structure of the trading system that there is in New Zealand. I would expect ours is going to be tighter and it's going to be more targeted."

The Greens preferred system in Australia is "a tax on the biggest polluter," he said. But he admitted it would impact on households.

"That would be passed on in some ways as increased power prices. But nowhere like the power price increases we are seeing coming through due to increased cost of fuels and transmission."

He criticised Liberal leader Tony Abbot, who has pledged to repeal any carbon tax.

"The opposition is saying they will take a different mechanism. We will take taxpayers money and fund the big polluters to reduce their pollution. They looking at a centralised way of dealing with carbon. Taking the taxpayers money and paying the polluters that will be costing $20 billion over the next decade and will cost A$720 a household by 2020.
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"We are doing the reverse. We are moving towards putting our carbon price onto the polluters and with the money raised then compensating householders so they won't have increased costs as a result of the carbon price.

"It's quite a reverse, we've got the conservative opposition looking at a government funded mechanism and a Labour party looking at a market mechanism."

The Greens will meet with Gillard on Wednesday to thrash out the deal. They hope to reach a decision by July 1st.

On the table are what the price of carbon will be, and if they can move to a carbon trading system with three to five years time. Also up for discussion is whether petrol is included in the levy, which the Greens want to see.

"The details of that have not yet been worked out."

And while the Greens are in an influential position, they would have to compromise.

"If you go into politics you can't - unless you are a majority government - get exactly what you want. So it is compromise."

He said the move would "possibly be the biggest economic transformation in Australia in many decades".

"Certainly since the goods and services tax was brought in a decade ago by the Howard government."

Gillard's popularity has nosedived since she announced her government would pursue a carbon tax but without outlining the details.

The opposition has been backed by a strong mining lobby and the influential Rupert Murdoch-owned press.

The Australian today ran a poll which suggested 60 percent were opposed to the levy.

However, tens of thousands rallied across the country in support of moves to tackle climate change.

Simultaneous rallies were held in cities as part of the "Say Yes" campaign which was launched last week by the actors Cate Blanchett and Michael Caton.