Thursday, 13 October 2011

The long wait !

Yesterday, what the average Australian refers to as " the Carbon tax " passed through the lower house of parliament.   It seems certain to pass the Senate - and accordingly on the first of July, 2012 the five hundred biggest polluters in this country will be required to pay a tax of $ 23 per tonne on the carbon dioxide they emit.

We are assured that as the price for electricity, gas and other essentials increases,  this will cost the average household just $ 9.90 per week.   These costs will be reimbursed by the government to the extent of $ 10.10 per week, by way of pension increases and changes to the tax laws.

It sounds revenue neutral for the average family, but as with all things political - it is necessary to dig a little deeper to get the true picture.

Prime Minister Julia Gillard went to the last election with a promise of " no carbon tax from her government ".   She probably meant that at the time, but when faced with either loss of office - or form an alliance with the Greens - her lust for power overcame her principles.   She broke her word - and at the next election that will probably come back to haunt her.

So - what of this new promise that the " average " household will be no worse off under this tax forced on her by the Greens ?

Again, this is a " political promise " - and political promises have a limited time factor.  This promise is probably only good for the period from July 2012 to whatever date in 2013 the nation again goes to the polls.   If the government is re-elected - all bets are then off !

There is a time honoured way of slipping out of inconvenient promises.   Simply fail to index the promised benefits and allow inflation to run it's course.     Under that scenario the pension slips behind the cost of living increases and taxpayers find themselves moving into higher tax brackets.

This is a favourite ploy used by all incoming governments.  Rather than cause an outcry by cancelling a service or benefit - it is much simpler to just freeze funding and allow it to die a natural death further down the track.

Whether this carbon tax is a means of saving the world - or a disaster for both industry and average Australians - will not become clear until the passage of time reveals a result.

For most of us - it will be a long wait !

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