Carbon tax job warnings overblown: Academic

Warnings a carbon tax could lead to massive job losses have been dismissed by a new academic report, as rallies were held over the weekend in support for action on climate change.

The report, entitled How many jobs is 23,510 really?, debunks claims made by the Minerals Council of Australia in 2009 that a mooted emissions trade scheme would result in 23,510 fewer jobs in Australian mining.

The report, written by Professor Bruce Chapman and Kiatanantha Lounkaew of Australian National University on behalf of the Australia Institute, says a “seemingly large fall in employment of 23,510 is in reality an insignificant proportion of total employment and total unemployment, although it will obviously be a much larger proportion of mining sector employment.”

It concludes the “projected job losses from the ETS are in a statistical sense close to invisible with respect to employment and unemployment stocks, and trivial with respect to aggregate flows in the labour market.”

“Also, it is apparently the case that with respect to mining sector employment the projected losses are a very small proportion of overall inflows to and outflows from mining,” it says.

“Further, it seems to be the case that those leaving mining in a period of growth are not then entering protracted periods, or perhaps any period at all, of unemployment.”

The report stresses that the result should not be interpreted as arguing that economic policy reform is “costless to all employees”, adding that there remains “clear roles for Government to minimise the personal costs for those affected”.

Still, its findings are politically sensitive, given industry’s comments about job losses on the one hand and the prospect of large-scale government-funded compensation on the other.

Professor Chapman, who was also author of the Higher Education Contribution Scheme, was not available for comment this morning.

The Government has promised individuals will not be worse off when the carbon tax is introduced next July, to be transitioned into an emissions trading scheme down the track. Business bodies have called for greater information on the scheme, which has yet to be priced. The Government’s climate change adviser Ross Garnaut last week advocated a carbon price of $26 per tonne.

The comment follows weekend rallies across cities in support of climate change action, although a Galaxy Poll commissioned by the Herald Sun newspaper has found that 58% of the respondents were opposed to the carbon tax, 28% supported it and 14% were uncommitted.

According to the Australian Financial Review, the Government is expected to release Treasury modelling this week on the likely growth in gas-fired power at the expense of coal-fired power, under a carbon price of under $40 per tonne.