Abbott vows to repeal carbon tax

Opposition leader Tony Abbott has renewed his pledge to repeal the carbon tax, which passed through the House of Representatives yesterday, in a move that could compromise SMEs’ long-term plans.

Labor MPs broke into applause as the bills passed through the Lower House, with 74 votes in favour and 72 against.

The bills will go to the Senate next month, where Labor has the support of the Greens, before the legislation comes into effect on July 1, 2012.

But the tax could be short-lived; Abbott has vowed to repeal the laws if he wins the next election, despite the certainty of such a move being blocked in the Greens-controlled Senate.

“We can repeal the tax, we will repeal the tax, we must repeal the tax,” said Abbott.

“I am giving you the most definite commitment any politician can give that this tax will go. This is a pledge in blood.”

While today’s development will enable businesses to start planning for July 1, Abbott’s words throw into doubt the longevity of the tax.

Peter Anderson, chief executive of the Australian Chamber of Commerce and Industry, says the carbon tax debate highlights the uncertainty that comes with a minority government.

“Central to the economic debate is the position of small business,” Anderson says.

“Despite the community consensus being in the other direction, legislation is being pushed through the Parliament,” Anderson says.

Anderson also attacked Labor for sending mixed messages to the business community.

“In June they were told by the Prime Minister… to pass the costs on to consumers, yet hours later the Government announced a beefed up ACCC ready to penalise any business that passes on more than the Government thinks right,” he says.

While Anderson continues to lament the lack of certainty surrounding the tax, others have welcomed today’s development.

Kevin Noonan, a research director at research firm Ovum, says with the bill’s passage through both houses “virtually assured”, it is time to refocus on the business and IT opportunities.

“There are new industry assistance programs to be designed and implemented, and a new regulatory environment to be delivered,” Noonan says.

“The Government has no room for slipups and will need to be laser focused on every detail.”

However, Noonan also raised doubts over the lifespan of the tax.

“Should the Government win the next election, there will be ongoing work in delivering the proposed ETS,” he says.

“Should Labor lose the election, Mr Abbott is committed to unpicking the legislation and compensating some impacted sections of the community.”