The federal opposition has seized on new details of the government’s planned carbon tax, saying the government can’t be trusted to compensate taxpayers and pensioners properly.


Climate Change Minister Greg Combet on Wednesday revealed more than 50 per cent of revenue from the carbon price, to be imposed from July next year, would go to compensating households and said millions of people would be better off under the scheme.

But while Mr Combet said the assistance would be permanent, he did not commit to maintaining the “more than 50 per cent” level over time.

Opposition Leader Tony Abbott, who has pledged to scrap the tax and the compensation if elected, said Prime Minister Julia Gillard could not be trusted to deliver ongoing support.

“First, she said there would be no carbon tax, now she says it won’t hurt you,” Mr Abbott said.

“You couldn’t trust her then, you can’t trust her now.”

He said while the tax would be permanent, “any compensation will be very temporary indeed”.

Mr Combet told the National Press Club the more than 50 per cent level would apply in the first year of the carbon price “and over a period of years”.

Asked later on ABC television whether this meant it would be wound back, Mr Combet said:

“Lots of things could happen in years to come, but what we intend doing is making sure that the assistance to households is not only permanent but is more than 50 per cent of the revenue for a considerable period of time to come.”

Mr Combet said the government would undertake reviews to ensure the assistance “remains adequate and met the policy goals that had been set”.

“We will make sure it remains relevant and if it’s delivered through a pension increase for example, pensions are increased and they take into account increases in the cost of living,” he said.

The Australian Council of Social Service’s Dr Cassandra Goldie said the commitment was welcome, but household compensation should come at a standard dollar rate, adjusted every year, rather than a percentage of income.

Gillard stressing benefits

Ms Gillard, who visited a power station in southwest Queensland on Wednesday that uses solar energy and coal, said people would receive “more household assistance than the price impacts they will see in the things that they buy”.

She also welcomed support from a group of 21 companies including GE, AGL, Linfox and Fujitsu who backed the carbon price, saying it is needed to provide business certainty and boost jobs and investment.

Opposition treasury spokesman Joe Hockey said the carbon tax risked redistributing wealth, rather than changing people’s behaviour to address climate change.

But Mr Combet said the main behavioural change being sought was to get big polluters to cut their emissions.Climate Institute chief executive John Connor told the ABC that Opposition is “missing the point.” He said it was much more about getting big carbon-emitting industries to take responsibility for their pollution.

“It’s about changing investment and power generation decisions which has consequences that are passed down the chain to households,” Connor said.

Mr Combet said in his speech that Mr Abbott was more a “mobile scare campaign” than an alternative leader and would wind back tax cuts and pension increases if elected.

The minister said the government was aiming to legislate its scheme in the third quarter of this year and it would be budget neutral.

In the coming weeks he would be talking to the coal industry about assistance measures, Mr Combet said.