Labor Signals Qualified Support for Australia Carbon Repeal

The Australian opposition may support Prime Minister Tony Abbott’s bid to repeal the nation’s carbon tax if the government agrees to retain an emissions-trading program, Labor leader Bill Shorten said.

“We believe the best, most cost-efficient way to deal with carbon pollution is an emissions-trading scheme,” Shorten told reporters in Canberra today. Labor will look to amend legislation that Abbott has pledged to introduce when the new parliament meets this month, in order to keep a market-based emissions-trading system, now due to start July 1, Shorten said.

If Labor’s amendments fail, the opposition won’t support the repeal of carbon pricing, Shorten said.

Abbott, whose Liberal-National coalition was elected Sept. 7, has vowed to abolish the mechanism established by then-Labor Prime Minister Julia Gillard in 2011 as a step toward a carbon market, saying it has driven up energy prices and deterred investment. More than 300 of Australia’s largest emitters must pay an average $24.15 a metric ton for greenhouse gases this year.

While Abbott’s coalition has a majority in parliament’s lower house it doesn’t control the Senate, which has the power to block its laws. The prime minister told a meeting of party members in Hobart Oct. 26 that Shorten should support his bid to remove carbon pricing, calling it “socialism masquerading as environmentalism.”

Methodical Steps

Repealing the carbon-price program is “inevitable,” Environment Minister Greg Hunt told reporters today in Townsville, Queensland state. He declined to commit to a timetable or speculate on the government’s course of action should Labor block it.

“We will not stop until the carbon tax is repealed,” Hunt said. “Let’s see what the Labor party actually does in the parliament. We will take each step methodically and with complete intention.”

Gillard agreed to create a carbon price at a fixed rate for three years, starting in July 2012 at A$23 a ton, before market-based pricing commencing in mid-2015. After winning the Labor leadership by defeating Gillard in a June party room vote, then-Prime Minister Kevin Rudd announced a floating price linked to the European Union’s mechanism would be implemented a year earlier, in July 2014, at about A$6 a ton.

Abbott called the September election a referendum on Labor’s carbon policy. New Senators who won a spot in the upper house won’t take their place until July 1, leaving the balance of power in the chamber currently held by the Greens.

To contact the reporter on this story: Jason Scott in Canberra at jscott14@bloomberg.net

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net

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