Just another CON from the master of spin and more spin in his desperation to be popular.
How much will this con cost us as tax payers?
Watch out for Kevin Rudd fiddling the books to hide a huge budget black hole from his latest carbon tax backflip.
Simon Benson:
KEVIN Rudd has punched a $6 billion hole in the budget by confirming he will fast track the introduction of an emissions trading scheme to replace the carbon tax
…
Treasury modelling released by the government claimed it would be a “one-off” for consumers, with the price dropping from the expected $25.40 a tonne to a probable floating price of around $6 a tonne…
Treasury forecasts in the budget paper, however, estimate that the carbon price under an emissions trading scheme would still rise to $38 a tonne by 2018-2019.
Actually, those aren’t forecasts at all. They are assumptions - and ill-founded, as Henry Ergas has already demonstrated in analysing the 2015-16 carbon price estimates:
Combet has not provided any information supporting that “forecast”, instead pointing to Treasury’s carbon tax modelling. But contrary to Combet’s assertions, that modelling does not “forecast” a $29 price in 2015-16.
Rather, it calculates that $29 price as the lowest global carbon price in 2015-16 that would be consistent with the government’s aspirations for cutting emissions. The $29 figure was therefore not a prediction of likely prices in 2015-16; it was merely the minimum price needed for deep global emissions reductions to occur.
So as well as having to find a way to plug the immediate $6b hole, if the PM’s fair dinkum he’ll revise the forward estimates to account for the difference between the fanciful $38 a tonne in 2018-2019 and a more realistic, single-digit figure. That will have huge budget implications of course: the lion’s share of the Gonski and NDIS spends have been backloaded into that fiscal year.
Alternatively, if the PM honestly believes we’ll be paying $38 a tonne by 2018-2019, he should be honest with people: the cost-of-living pressures he claims he’ll relieve will only be temporary, with the worst of the carbon price yet to come.
Ergas today warns Rudd will be sending billions of our dollars to foreign green speculators:
If Treasury’s modelling is to be believed, once prices get to European levels, achieving the emissions cuts Rudd pledged would require purchasing 80 per cent or more of abatement to 2025 from the European ETS. But even at today’s European prices, that entails a transfer of more than $8bn from Australian businesses and consumers
to the speculators who bought the emissions permits of bankrupt eastern European producers of coal, iron and steel.
What environmental gain could possibly come from that transfer, which taxes Australians to pay Europeans for emissions cuts they made long ago? And there will of course be the damage to the budget, with a fall in the carbon price to $10 reducing revenues to 2016-17 by about $14bn.
