CQU Professor John Rolfe.
CQU Professor John Rolfe. David Sparkes

Carbon tax 'more about politics'

THE carbon tax is being driven more by politics than practical considerations at present, a Central Queensland economics professor says.

CQUniversity Professor in regional economic development John Rolfe said the biggest impact on the region would be on industry, particularly coal, gas and minerals processing.

“Coal will be hardest hit because they lose some of the diesel excise rebate as well as having to account for emissions,” Prof Rolfe said.

“The current high markets for coal mean that the carbon tax won’t put producers out of business, but it might slow the rates of new development, and does leave the industry at more risk if markets fall in the future.”

He said there would also be impacts on the gas and minerals processing sectors, although these don’t “have the same level of emissions or use of diesel fuel as the coal industry”.

“Again, we are unlikely to see industry shut down, but it does increase costs and risks into the future,” Prof Rolfe said.

“Most other industries and households in Central Queensland should remain relatively unaffected, with some changes in power charges and other small price rises flowing through the economy.”

He said a key issue with the carbon tax was it would have some negative effect on the economy.

“This is unavoidable, given that it will redistribute income,” Professor Rolfe said.

“However, the government are offering substantial compensation packages to low income households and many exporting industries to compensate.

“Overall though, the tax will slow the economy to some extent.”

He said both sides of politics were arranging the facts to suit their case. “One problem with the Government case is that the carbon tax will achieve very little practical outcome at an international level, so emission reductions should only be undertaken if the costs remain low,” Prof Rolfe said.

“Turning to the opposition, some of the claims about the level of economic disruption from the carbon tax seem excessive.

“The opposition is correct to say that it will have a negative impact.The problem that the opposition has is that they are committed to the same level of greenhouse reductions, and that will involve a cost to the economy whatever policies are chosen.”

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