Australia’s Carbon Tax Imperilled by Vice Scandal
Linking something as dull as ‘tax’ with ‘vice’ in a headline is a great opportunity – too good to miss – and rather spices up the otherwise dull and technocratic discussion related to legislating greenhouse gas emissions.
In the past few days Australia’s press has been preoccupied with the story of a Labor MP who is allegedly implied in a police investigation following improper use of a health union credit card (procuring escorts).
The Australian Government, led by Julia Gillard, currently has a majority of one seat. Should the MP in question be charged or further implied in the scandal, then a resignation and by-election will ensue. Commentators are predicting the fall of the Labor Government in that event (e.g. Rob Burgess at the Business Spectator – free subscription required).
At this blog, we have never had confidence that the unpopular carbon tax proposals would see the light of day. Since 2003 there have been two previous promises of emissions trading in one form or another – each of which fell at late stages.
It may not be third time lucky.
The main loser will be the renewable energy sector – who stood to benefit from over $10 billion of new funds over 5 years, recycled from tax revenue. The sector’s prospects would dim and share prices dive if the Government falls and that new funding becomes an impossible dream. Australia’s fledgling solar, geothermal, and wind technology groups would wither or move offshore.