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Independent Windsor Yet to Back Gillard’s Australia Carbon Plan

Australian Prime Minister Julia Gillard
Australian Prime Minister Julia Gillard. Photographer: Olivier Douliery/Pool via Bloomberg

April 14 (Bloomberg) -- Australian Prime Minister Julia Gillard’s plan to tax carbon emissions may be in doubt after a key independent lawmaker Tony Windsor said he wouldn’t guarantee its passage in Parliament.

Gillard needs the support of Windsor and three non-party lawmakers to pass legislation through the House of Representatives, the lower house. Windsor said today he may not support the plan that will fix a price for carbon over a three-year to five-year period starting in July 2012.

“The prime minister doesn’t have the numbers,” Windsor said in an interview with Australian Broadcasting Corp. radio. “You can never guarantee something before it gets through a minority parliament.”

Gillard, who formed a minority government after the August 2010 election delivered the closest result in 70 years, will release details of her plan in the middle of this year. That will include the level of the fixed price, compensation to households and businesses and funding for clean energy projects.

The government is settling on a price of A$20 ($21) a metric ton, meaning electricity costs may rise about 10 percent, or A$2.70 a week, and gas prices increase 8 percent, or A$1.40 a week, the West Australian newspaper reported today, without saying whether it obtained the information.

Households will share a A$5.5 billion compensation package for the higher cost of living, the newspaper said. Permits under the European Union’s carbon trading system for December 2011 delivery closed at 16.64 euros ($24) a ton yesterday.

Consultation Process

“We are in an intensive consultative process to get the design of carbon pricing right,” Gillard told Australian Broadcasting Corp. radio today. “More than 50 percent of its revenue will go to assisting households, but we are continuing to consult on the details.”

Gillard’s Labor government wants to reduce greenhouse emissions at least 5 percent in 2020 in Australia, the world’s biggest coal exporter. It has also set a target of generating 20 percent of the nation’s energy from renewable sources like wind and solar by 2020.

The government, whose two-party preferred support fell to an eight-year low of 45 percent in a Newspoll survey published in the Australian newspaper on April 5, also needs backing from the Greens party, which will control the upper house Senate from July.

The Greens and independents Windsor and Rob Oakeshott are part of a multiparty climate change committee that is helping formulate the carbon strategy.

The opposition Liberal-National coalition doesn’t back the climate plan, with leader Tony Abbott calling the levy a “wallet cleaner.”

Treasury estimates a A$30 per ton carbon price would cost households an extra A$863 per year, the opposition said, citing documents released under a freedom-of information request.

To contact the reporter on this story: Gemma Daley in Canberra at gdaley@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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