Isra-Mart srl: Australian government to unveil carbon tax plan within days

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After numerous false starts, the Australian government is poised to unveil the final version of its controversial carbon tax plan within the next few days.

Speaking to reporters earlier today, Treasurer Wayne Swan said that details of the new tax, including the proposed price per tonne, the timetable for transitioning the tax into an emissions trading scheme, and the compensation mechanisms intended to support those adversely affected by the levy, will be announced on Sunday.

The final version of the plan, which is due to come into effect from mid 2012, follows months of intense negotiations between the ruling Labor Party and the Green and independent MPs on which the minority government will rely if it is to pass the controversial legislation.

The plans have been consistently opposed by the opposition Liberal Party, which has warned that the tax could cripple Australia's mining industry and result in higher energy prices for households.

Speaking today, Swan again argued that the tax would be narrowly targeted at carbon intensive firms, while accompanying tax breaks will limit the impact on businesses and households.

"This price on carbon pollution will apply to fewer than 1,000 of our largest polluters," he said. "It will not apply directly to households."

Swan added that 90 per cent of households would receive tax breaks or pension improvements to help cope with any resulting increase in living costs, while businesses that see their competitiveness affected by the new levy would receive specific assistance.

His comments came as The Australian newspaper reported that the government is putting in place a support package worth up to A$3bn to help carbon intensive firms shift towards cleaner technologies.

Citing anonymous sources, the paper said that the plan to be announced on Sunday will provide energy companies with lines of credit and loan guarantees to help reduce emissions and increase investment in renewable energy.

The Australian also reported that a separate Clean Energy Finance Corporation, backed by A$2bn of funding raised through the new carbon tax, could be used to leverage private sector investment in clean technologies.