Carbon price to have marginal impact on economy, income: Swan

The Government is expected to reveal Treasury modelling today showing a carbon price would have a marginal impact on incomes and the rapidly growing economy over the next 40 years, and describe its plans for a price on pollution as the “next crucial frontier.”

According to reports, the figures predict a carbon tax would cut one-tenth of a percentage point off annual growth in income for every Australian until 2050.

The release of the modelling, which is based on a $20-per-tonne starting point, has been criticised by the Greens and crossbenchers, who say they should have been privy to the information beforehand as they negotiate with the Government on the introduction of a carbon tax next July.

Treasurer Wayne Swan is expected to release modelling showing 1.1% average annual growth in real national income per capita until 2050, despite a carbon tax being in place.

”As a result, real national income per person would be 16% higher than current levels by 2020, which is an increase of more than $8,000 in today’s dollars. By 2050 the increase is about 56%, or more than $30,000,” Treasurer Wayne Swan will tell the National Press Club.

Swan is also expected to draw attention to the economic benefits of taking action on climate change, such as protecting the Murray Darling Basin and the key tourism destinations of the Great Barrier Reef and Kakadu, and ask Australians to imagine how the country would be positioned had the Hawke-Keating Governments not brought down tariffs.

And he will strike back at opponents, saying: ‘We can’t let Australia become a country incapable of reform – a country where the deniers, the dinosaurs, the vested interests and partisan commentators destroy the reforms we need to prosper together.”

Swan will add that reforms once described as a potential disaster for the economy have in time reaped “big dividends for the country, helping secure two decades of uninterrupted economic growth.”

According to The Age, government sources say the Treasury modelling will also show 1,700% growth in the renewable electricity sector by 2050 under a carbon price.

The speech follows video footage on yesterday’s Q&A television program, showing Opposition Leader Tony Abbott describing in 2009 the benefits of a price on target.

“If you want to put a price on carbon, why not just do it with a simple tax?” Abbott says in the video.

“Why not ask electricity consumers to pay more? Then at the end of the year you can take your invoices to the Tax Office and get a rebate.”

“It would be burdensome – all taxes are burdensome – but it would certainly… raise the price of carbon without increasing in any way the overall tax burden.”