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What is a carbon tax?
In theory it is an impost designed to reduce the emissions of the end user. ie carbon tax on coal is designed to reduce the burning of this product in the generation of power and the end user (us) from being wasteful.
There is a couple of effects to the introduction of a tax. Firstly the tax is passed on to the end consumer. Second the end consumer has less to spend overall as a result of the tax.
This is supposedly going to be offset by tax cuts and welfare payments to some elements of our society.
There is a big problem with this style of thinking though. It is circular. Nothing will ever get done to change what is happening while a tax like this exists. It is just pure revenue raising and nothing more than that. The government departments that will administer this tax will be huge and that will eat up what is left over from paying out people. The tax should be smaller and implemented to pay for new technology. Once said technology is working remove the tax.
It also affects the poor more than the rich (who are more likely to use more energy anyway and not care about the cost). Even with offsets the poor can hardly afford to pay the bills now. Pensioners are having to turn everything off now at night and go to bed early because they cannot afford to pay their bills because everything else is costing a lot too. The energy companies will increase the prices over the top anyway to offset any inconvenience this has to them. This minor increase will cripple the battlers and more importantly the middle income earners who will get virtually nothing from the deal. The middle income earners are paying for expensive housing with high interest rates. This will cause defaults to increase over what they are now. This in effect damages the economy because less money is entering the system. The economy then slows down and we enter a recession.
Next add the effect this will have on local industry. I take my industry for example. The construction industry has proprietary products made for ready use which require the use of carbon emitting manufacture. Steel framing, plasterboard and concrete are just a few fo the products we use. The price of these items will go up and I can tell you I will surely pass this onto the end consumer which is the clients building these structures. If construction costs go up there is less money in the pool to go around and this affects an already weakened construction industry which is one of the last manufacturing bases in our country. Which happens to employ many of the traditional labor supporters too. The industry will reduce in output and jobs will be lost. Businesses will be lost (those are the people who employ 90% of Australias workers).
So what is a carbon tax? It is a stupid idea that does nothing but cause harm. Sure have a small tax, but put it into science and technology to change the methods of power production. Then make industry change by giving them the technology or support to make the change. Don't make a huge tax that cripples the end consumer. Technology change will help to stop emissions here.
However, nothing will make a dent in general pollution while other countries just pour more out in a single day than we do in a year. Being able to stand up at conferences and say we did this and so should you is just never going to work.
The carbon tax is an infantile idea. When the second wave of the GFC arrives here this tax will get forgotten about. We are entering a recession now, so hang on to your hats.
I hope that answers your question Trevor.
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