Government attacks Coalition over warning to SMEs on carbon compensation

The Government has attacked the Coalition after it warned businesses to avoid buying more carbon credits than they need, as it plans to scrap the entire carbon tax scheme if it wins office at the next election.

That warning came alongside a separate threat the Coalition would issue a white paper after the election regarding its own policies, which place a higher emphasis on market-driven investment for renewable energy and for businesses that prioritise clean energy.

Shadow Minister for Climate Change Greg Hunt told the Australian Financial Review the Coalition believes its own $3.2 billion policy would be able to reduce emissions by 5% through 2010.

“We think the costs are likely to be lower than those that were allocated,” he said. “I think we have more spare capacity than I imagined”.

The Coalition would look at repealing the tax legislation merely weeks after it potentially wins office, with legislation of its own introduced shortly afterwards. The white paper will hold more information on the Coalition’s policies, including information on penalties for businesses that go over emissions baselines and the details of the Emissions Reduction Fund.

Hunt says the Coalition will focus on abatement, noting a price of $12 per tonne. He also said penalties to business would not be so significant that costs would be passed on to consumers.

Meanwhile, the Government has attacked the Coalition for telling businesses that by buying carbon credits they may not be eligible for compensation if it wins Government.

On the weekend, deputy leader Julie Bishop told the ABC that businesses shouldn’t need to buy credits before 2015, and mentioned that SMEs wouldn’t necessarily have to be refunded.

“There is considerable doubt about a property right that is susceptible to variation or deduction being able to be compensated,” she said. “I’m saying that you cannot necessarily assume that a carbon credit would be able to attract the property right of just compensation.”

Treasurer Wayne Swan has attacked those comments, warning businesses that “when this piece of legislation goes through the Senate it will be the law of the land”.

“What I would advise the business community and people generally is to follow the law of the land,” adding that he felt the comments were “deeply, deeply irresponsible”.

The carbon tax legislation has already passed the House of Representatives, and is yet to appear before the Senate.