News | 17th Jul, 2014

Australia dumps carbon price, as repeal passes Senate

17 July 2014
Sophie Vorrath, Renew Economy

The Abbott government’s quest to abolish Australia’s carbon pricing scheme and unravel its renewable energy support mechanisms is finally complete, with the federal Senate voting this morning to pass the Carbon Tax Repeal Bill and seven related bills through the upper house without amendment, 39 to 32.

The vote’s outcome – which gives Australia the dubious distinction of becoming the first country in the world to remove a price on carbon established to combat climate change – was greeted by rather limp applause from the cross benches, as well as a couple of celebratory outbursts from Tony Abbott’s Coalition of climate deniers; and was roundly condemned by Labor and the Greens, who variously described it as an “appalling” day for Australia and a failure of leadership.

“A vote for the abolition of the clean energy package is a vote for failure,” said Greens leader Christine Milne ahead of the Bill’s third reading. “A failure to understand that the future is going to be powered by renewable energy.”

Tasmanian Labor Senator Lisa Singh said it marked a fundamental moment when Australia was going backwards.

“This is an appalling day for Australia, when a government, rather than lead in the …race to the future, is determined to stick with the past,” she said.

“This will be a short-lived victory for the Abbott government, because Australians will not stand for it. People will understand very quickly that the supposed benefits of repealing (this Bill) will not be realised.”

Liberal Senator Ian McDonald, meanwhile, seized the moment to fly his party’s true colours on climate:

“As one who at the very beginning of this debate crossed the floor against my own party at the time, I would just like to say a couple of words on the final debate on this long running issue.

"First of all, you’ve heard from the Greens political party – the ultimate of hypocrisy. The Australian people clearly at the last election voted on what everyone knew was a referendum on the carbon tax to get rid of the carbon tax.

"It’s typical that the Greens think they know better than everyone and want to guide everyone.

"If there is global warming, notwithstanding that in Brisbane on Saturday morning we had the coldest day in 113 years – but I have always indicated, Mr deputy president I have an open mind on this.”

National Party Senator Barnaby Joyce continued in the same vein: “You look at the weather today. Look at the way you’re dressed. No one thinks it’s too hot,” he said after the vote.

Abbott, himself, stayed away from comments about the weather, sticking – in an email to supporters entitled “the Carbon Tax is gone!”– to his well worn script that about this being a win for Australian families and small businesses.

“Scrapping the Carbon Tax will save the average family $550 a year,” Abbott wrote. “You’ll see the benefits in coming power bills.”

But will we? Labor and the Greens (not to mention a number of fairly prominent economists and analysts) have serious doubts.

“Not only will households have to deal with global warming, but the $550 they now think they’re getting? Forget it. It’s a mirage,” said Greens Leader Christine Milne on Wednesday.

“In the Senate today, Finance Minister Cormann couldn’t answer even the most basic questions about what the legislation will do. Either he doesn’t know or he doesn’t care.

“Clive Palmer’s amendments have turned out to be a yellow tape mess that will be a big shock to households and business.”

Richard Denniss, director of The Australia Institute, said that any businesses wanting ”certainty” on climate policy – and which therefore argued for the repeal of the carbon tax – had not got what they wanted.

“The irony is that for all their talk about the need for certainty all they’ve done is lengthen the time for uncertainty,” Denniss said. “There will be a carbon price in Australia in 10 years’ time. I just don’t know whether there will be one in three years’ time.”

Leader of the Opposition, Bill Shorten, responded to today’s vote with a joint statement from the shadow minister for environment, Mark Butler, saying that the Abbott Government was “determined to hurt Australians,” with its unfair Budget and by refusing to tackle climate change.

“History will judge Tony Abbott harshly for refusing to believe that action is needed on climate change,” the statement read. Tony Abbott will do anything to try and ignore the science of climate change. It’s clear that he still thinks it is – in his own words – ‘absolute crap’.

“With the clean energy package now on Tony Abbott’s growing scrap pile of good policies, renewable energy is now in his sights.

“Tony Abbott is attempting to abolish the Australian Renewable Energy Agency and Clean Energy Finance Corporation and undermine investment in renewable energy by spreading myths about the impact of renewable energy on the cost of electricity.”

Today’s vote was the Carbon Tax Repeal Bill’s third time around in the Senate, after various motions for amendments from the cross benches – namely the Palmer United Party – and the Greens muddied proceedings.

A PUP-proposed amendment which was passed as a result of last week’s chaos imposes the ACCC’s powers to enforce the passing on of reduced energy prices not just on big energy retailers but also on “any entity that produces electricity.”

Amendments moved by Labor to move to an emissions trading scheme, and to stop huge cuts to ARENA, both failed, as did a Greens amendment attempting to ensure that houses with solar panels aren’t caught by the regulator’s new powers to ensure that electricity prices fall as a consequence of the carbon tax repeal.

Outside of political circles, Climate Institute CEO John Connor described the successful repeal as “an historic act of irresponsibility and recklessness.”

“The last seven years have been a sorry and sordid tale of greed, incompetence and rotten luck, which has reduced Australian policy making to scaremongering, self-interest and reckless short termism,” said Connor.

“With the Senate’s vote today, Australia not only lurches to the back of the pack of countries taking action on climate, but sees the responsibility of emission reductions shift from major polluters to the taxpayer.

“Today we lose a credible framework of limiting pollution that was a firm foundation for a fair dinkum Australian contribution to global climate efforts.”

“What we are left with as potential replacement policy rests on three wobbly legs – a Government fund subject to an annual budgetary arm wrestle, uncertain non-binding limits on some company emissions, and a renewable energy target under assault.”

Environment Victoria’s Mark Wakeham said: “The Abbott Government has today made every existing and proposed renewable energy project in Australia less profitable. It’s a great shame that Clive Palmer and Ricky Muir, who have both talked about their love of renewable energy this week and the need to maintain the renewable energy target and agencies, sided with the Coalition to damage the clean energy industry today.”

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