Australia Has A Carbon Tax: Like It or Not

The highest estimates I could find have Australia contributing about 1.5% of the carbon being spewed into the atmosphere by human industrial activities. The lowest estimate puts it at 0.2%. So I guess the truth lies somewhere in between.

Depending which paper you read on which day in the lead up to Carbon Tax Sunday (the 10th of July) somewhere between 60 and 80 percent of Australian’s would have voted against a carbon tax had they been polled. But they weren’t and now the Labour government has rammed through carbon tax legislation to take effect as from 1st of July 2012. So like it or not we now have to face the consequences and it is hard, very hard, to find a positive story relating to the carbon tax in any of the popular press publications—and yes, I have looked.

Basically the carbon tax—along with the income tax ‘reforms’ buried in the legislation—is going to impact every Australian financially, despite all the measures being implemented by the government to try and cushion the cost to “the average family”. But you can be very sure that the government will do everything it can to hide and shield any negative collateral caused by the carbon tax, at the same time turning the rose coloured spotlight on even the tiniest of positive outcomes—assuming any such outcomes (that are real and not made up) should actually occur.

But there is one thing that all the experts seem to agree on. The carbon tax will not reduce the amount of carbon being released into the atmosphere by Australian companies by a single milligram. In fact, as many companies will now need to produce more outcome to sell to cover the cost to their businesses of the carbon tax, the net effect is more likely to be that the carbon tax will cause additional carbon to be produced.

Another somewhat interesting side effect that is being discussed is that the carbon tax is going to cause somewhere between 3 and 5 billion dollars to be spent overseas every year. This is because in-scope carbon producing companies are going to be forced to buy renewable carbon credits from overseas sources.

I guess only the next three or four years will reveal the truth, but the view from ‘here and now’ is not an optimistic one.

ShareMarketCould it be the carbon tax that will push Australia back into recession?

The Australian share market fell 72 points today (~1.6 percent) so Carbon Tax Sunday was certainly not taken as good new by investors.