From the start, the very idea of a " Carbon tax " was very " iffy " ! The basic principle was to increase the cost of creating pollution so that the polluter would have an incentive to move to a less polluting way of doing business. It was a typical " carrot and stick " approach.
It might have worked if the entire world had adopted this strategy, but the biggest polluters - The United States, India and China - opted out. Australia - and a handful of lesser economies - decided to push on with the scheme and this did a great deal of harm to their economic competitiveness.
Now the rationale that would make the scheme work has collapsed into a giant black hole. It was projected that carbon credits would be priced at about $ 29 a tonne but across Europe this has reached just $ 3 a tonne. For Australia, it is a wrecking ball hitting the Federal budget which will leave a budget gap of near $ 7 billion.
That leaves in it's wake - an unholy mess ! The carbon tax implementation pushed up electricity and gas prices and the public received compensation to the tune of $ 14.9 billion. If we dump this carbon tax, will these price surges return to previous levels ? And will the government claw back the compensation already delivered ? What happens to the industries that simply faded out of existence because the tax made them uncompetitive ?
It looks like we are facing an unpleasant budget revision to try and plug that gaping big black hole - and this is happening at a time when the commodity prices on which Australia relies for revenue are starting to slip. We no longer have a wide manufacturing base to spread the load. It seems that there are tough times ahead.
Hopefully, this may be the incentive to make Australia a competitive nation again. It certainly is not the time to force industry to cut back research and development work - because it will not be an allowable tax deduction. R & D is the backbone of innovation - and it is innovation that delivers new industries - and jobs !
It is also time to re-think the "loadings" that apply to working hours outside that old nine to five way of thinking. The world has evolved into a 24/7 economy and we can not be competitive if we continue to cling to the past. It is not a case of cutting wages. It is simply being reasonable and spreading the jobs over a time period which makes industries viable.
If Australia is to survive the damage that the carbon tax has inflicted, a lot of old union shibboleths are going to have to go out of the window. We badly need to drag our economy into the twenty-first century - and hard times are the incentives that make it possible !
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