Lets have a post about the massive FRAUD that is the carbon tax and the greatest LIE ever told by a politician let alone our PM
Combet’s carbon system scheme rocked: Budget to lose billions
Europe’s carbon permits have crashed to record new low prices, leaving the Federal Government facing a budget hole of more than $4 billion a year from 2015.
The price of Europe’s Emissions Trading System permits dropped overnight to just $3.33. Australia’s price is $23 a tonne - by far the most expensive in the world.
This doesn’t just mean the Gillard Government is pricing business out of the market with a huge new tax. It also means the Government could be left with a gaping hole in its Budget in two year’s time, when Australian companies can buy cheap European permits instead of our own to offset their emissions.
The Government is counting on raising more than $9 billion a year with its carbon tax. But that tax take will be slashed by billions if Australian companies can buy European permits for around $4.
That now looks almost certain, after a plan to drive up the price of carbon dioxide emission credits was rejected overnight by the Europ...
European Union Parliamentarians rejected a scheme conceived by the European Commission last year that would have frozen a large portion of the bloc’s carbon emission credits…
The idea behind the measure was to reduce the available number credits in the EU’s Emissions Trading System (ETS) in an effort to drive up the price of the credits. That way, companies would have had a greater incentive to invest in more environmentally-friendly equipment.
However, the vote actually sent the price of the credits down, meaning companies are better off continuing to pay for the credits than investing in alternative technologies.
The price now?
The result of the vote has seen carbon prices drop 40 per cent to a record low of €2.63 a tonne [$3.33]…
Nor is a real recovery in prices expected for years to come:
But carbon analyst Stig Schjølset, of Thomson Reuters Point Carbon, said the plan was now “politically dead”. “We do not envisage prices rising much above the current €3 mark and they may well drop lower,” he added. “Certainly this vote makes the EU ETS irrelevant as an emissions reduction tool for many years to come.”
This exposes Climate Change Minister Greg Combet as either utterly incompetent or utterly mendacious. Or, perhaps, both.
With zero training in economics and no Treasury officials by my side even I could see months ago Combet was Australia’s biggest bull artist when he claimed his carbon trading system wouldn’t leave the Budget with a black hole.
Here is Combet in August, claiming the world’s price would actually be around $29 a tonne two years from now:
The federal government say Australia’s price of carbon from 2015 will be linked to the European Union emissions trading scheme (ETS)…
“This means that from July 1, 2015 Australia’s carbon price will effectively be the same as that that operates in our second largest trading bloc,” Mr Combet said…
Under the full arrangement businesses will be allowed to use carbon units from the Australian emissions trading scheme or the European Union Emissions Trading System for compliance under either system…
Mr Combet repeated he was confident of the Treasury modelling, which predicts a $29 a tonne carbon price in 2015/16.
He was asked if the government would face a budget shortfall, in contrast to the $9.4 billion of revenue it had predicted the floating price would generate in the 2015/16 budget.
“It is three years away and the Treasury modelling is something that we stand by,” Mr Combet said.
Combet needed to say that because if he admitted the price would fall, he’d have to admit also the Government’s compensation for a higher carbon tax would have to fall, too. Instead, he promised the handouts would keep coming:
The government would not reduce household assistance payments and tax cuts set up to compensate for the price impacts of the carbon tax.
“We will not be cutting any household assistance,” Mr Combet said.
Only in February did Combet hint that his scheme was collapsing:
Climate Change Minister Greg Combet flagged the federal government may cut revenue forecasts for the... in this year’s budget as the chairman of its Climate Change Authority, Bernie Fraser, said Treasury’s price projections were out of date and unrealistic…
He was responding to a report in The Australian Financial Review which said the government faces a revenue hole of up to $4 billion in 2015-16 from a collapse in the carbon price, which is now about $5 a tonne.
Australia’s carbon price is $23 a tonne and will continue to rise until 2015, when it will float.
The Financial Review reported the Climate Change Authority has acknowledged the possibility of a slump to $10.72 a tonne in the price of carbon in 2015-16.
Mr Fraser said he was sceptical of predictions the price of carbon internationally would recover and the Treasury modelling should be updated…
[Combet] said last August: “The Treasury modelling that was done is something that the government stands behind and we continue to adhere to, and that does predict a $29 a tonne carbon price in fiscal year 2015-16.”
On Wednesday he said: “The Treasury has done its forecast for that price, they are included in the budget forward estimates and if there is any update of them they will take place in the budget.”
That loss of $4 billion a year is now looking optimistic.
But so typical of this government. Even if the tax take falls, it promises not to cut the handouts that tax is supposed to fund:
Even if revenue slumped, Mr Combet said the government was committed to tax cuts legislated to occur in 2015-16 and intended to compensate for a higher carbon price.
The May Budget, I suspect, will show just how incompetent Combet has been, and how mendacious, too, in his promises.
http://blogs.news.com.au/dailytelegraph/andrewbolt/index.php/dailytelegraph/comments/combets_carbon_system_scheme_rocked_budget_to_lose_billions/
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