The Price on Carbon

11 July 2011

Professor Michael Dirkis says the Carbon Tax is effectively the Emissions Trading Scheme (ETS) that was advanced by former Prime Minister Rudd with some minor changes around the edges.

In a response to The Conversation, Professor Dirkis writes that the bigger changes are in the area of the compensation package and the changes to the tax law.

"The government has been careful to say it's a price, not a tax.

"It's a permit system whereby people pay per tonne and what we see in three years time will be the full a cap and trade system come on board.

"In that sense, it remains an ETS.

"The levels of compensation couldn't have been achieved if we had gone down a pure carbon tax model because of issues with the World Trade Organization and compensation for trade-exposed emissions-intensive industries.

"The thing that is of greater interest is the government taking an opportunity to clean up the tax rates and, in one sense, simplify the overall feel of Australia's income tax system."

In another interview with AFP (Agence France Presse), Professor Dirkis said the reform was the biggest for Australia since the introduction of the Goods and Services Tax more than a decade ago.

"The potential impact across all the whole of the Australian business and the community at large is potentially quite large," he said.

View the articles:

The carbon tax: the experts respond - The Conversation

Contact: Greg Sherington

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