Here are the CTax questions I asked and the answers unedited from his email:
1. On QANDA, the PM suggested that the compensation packages will follow the price impact of the Carbon Tax. Does this mean Tax cuts will do the same? If so, does it also mean there will be tax increases if the price of carbon drops (although I'm sure you probably preferred I say the Tax cuts would 'end')? Insofar as I can tell, the EU price for a carbon permit per tonne is about $19 Australian and a forecast by 2020 of being just $29(2). Is this forecast the basis for the PM's claim that the anticipated floated price will be $29?
The Government has said the assistance provided to households through increases in Government payments and/or tax cuts will be permanent. Our reforms to the tax system mean that from 1 July 2012 over 1 million Australians will no longer have to lodge a tax return.
Combined with changes to the low income tax offset (LITO) no net tax is paid until an individual earns over $20,542. This change in particular will benefit part-time workers and students.
To cover the projected price impact of the carbon price out to the decade the Government will deliver a second round of tax cuts in 2015.
It is important to remember that the price impact of carbon price is modest. Modelling undertaken by Treasury shows 0.7% impact on the Consumer Price Impact (CPI) – less than a cent for every dollar spent. And infract for most items it will be even less – food will go up on average less than a dollar a week and clothing less than 10 cents.
What does this all mean for residents in Fraser?
The annual income for a typical family in North Canberra is around $89,800 per year. With 2 kids the expected average cost increase for this family will be $597 per year but this family will receive $819 in assistance through tax cuts and increased family assistance payments. This mean they will be around $222 better off per year.
In relation to your question about the transition to the floating price period:
The Government anticipates an average carbon price of $29 during the initial floating price period based on the advice provided by Treasury. The actual carbon price will be determined by the market.
The second round of tax cuts in 2015 is designed to assist households and the Government will review the household assistance closer to 2015 to determine if additional assistance is required but the assistance will not be reduced
2. I'm not an economist, nor am I stellar at my math. I do however, count that from the data available on the clean energy future website and from the crikey coverage(3) that the estimated income from the CTax is 9.2bn for industry alone. What is the total compensation for consumers, households and families?
The Government has been clear that over half the revenue raised from the carbon price will go to assisting households. The assistance being delivered through increased Government payments and tax cuts is approximately $14.9 billion. 3. On that note, the estimated revenue from the CTax is 8.6bn at most, 7.7bn at least, which is far less than the industry compensation. Where is the money coming from that makes up the difference between the revenue and the compensation? Will this affect Australia's debt and the commitment to eliminate it '3 years ahead of schedule'?
Unfortunately your figures are incorrect. The revenue raised from the carbon price is just over $24 billion. The total support for jobs is $10 billion and as I have said the assistance for households through tax cuts and increased Government payments is $14.9 billion.
The Treasurer has made clear that the Government will return back to surplus by in 2012-13. Our commitment has not changed. We will be back in surplus by 2012-13.
4. How many of the '500,000' new jobs in two years are going to be in Fraser?
Businesses in our electorate have the opportunity to take advantage of the investments in which the Government is making in clean technology. We have world leading institutions undertaking research and development which will be important for the clean energy future of tomorrow.
Earlier this year I was with Minister Ferguson at the ANU for the launch of a $10.7 million project to increase the efficiency of photovoltaic solar cells. The project secured investment from Trina, Chinese company which a world leader in global energy.
Late last year I helped open the Sustainability Hub at the Canberra Institute of Technology. The $9 million facility allows Canberrans to get practical experience in the latest green building applications, materials and new products for residential and commercial sectors as well as in renewable technologies.
Our city is already pioneering an electric car grid. In a few weeks charge spots where drivers can plug their electric cars to recharge will be up and running.
Being an economist I favour the market deciding where new industries and jobs will be created, but our region is well placed to take advantage of the growing clean technology sector.
5. Given that there will be no detectable difference in emissions globally because of the Carbon Tax-cum-ETS, at least according to Climate Scientist Richard Lindzen (4 and forgive me for linking Andrew Bolt, but that is indeed the source) this action, on the world stage, must be more about credibility than anything. What are the governments plans to use this to persuade nations who pollute far more than us in absolute terms?
We should help for the reason that we have always pulled our weight in world affairs. We give foreign aid even though we cannot solve world poverty alone. We have sent Australian troops aboard to fight for our values, even though they have often served as part of a large force. Similarly, we should work to reduce our carbon emissions through a market-based mechanism – an approach currently used in thirty two countries and 10 US States.
We should help for the reason that we have always pulled our weight in world affairs. We give foreign aid even though we cannot solve world poverty alone. We have sent Australian troops aboard to fight for our values, even though they have often served as part of a large force. Similarly, we should work to reduce our carbon emissions through a market-based mechanism – an approach currently used in thirty two countries and 10 US States.
Others countries around the world are planning to introduce a price on carbon too, including:
· China which has announced it will introduce emissions trading progressively, commencing in a number of key cities and provinces, including Beijing, Shanghai and Guangdong which covers well over 100 million people.
· California, the world’s eighth largest economy, will start a carbon trading scheme at the start of next year. California is also working with four Canadian provinces to progressively establish a regional trading market from 2012 onwards.
· Japan, South Korea and South Africa who are discussing putting a price on carbon.
· India which has a clean energy tax on coal that will raise half a billion dollars of revenue annually for clean technology development.
Tony Blair, a former Labor British Prime Minister, during his visit to Australia said:
Around the world right now people are moving towards a low carbon economy as the future. And that's what happening.
And the only way that you do that in the end is you put some price on carbon.
And the only way that you do that in the end is you put some price on carbon.
Mr Blair went on to say:
You inevitably are going to be in a situation therefore where you are going to have to adjust and change your economy.
So that's what we are doing in Europe, California, right round different parts of the world. Even China's doing it in its new five-year plan
So that's what we are doing in Europe, California, right round different parts of the world. Even China's doing it in its new five-year plan
The current Conservative Prime Minister of Britain, David Cameron, in a recent letter to Prime Minister Julia Gillard has said:
I was delighted to hear of the ambitious package of climate change policy measures you announced on 10 July and wanted to congratulate you on taking this bold step
Your announcement sends a strong and clear signal that Australia is determined to make its contribution to addressing this challenge.
It will add momentum to those, in both the developed and developing world, who are serious about dealing with this urgent threat.
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So that's mainly the party line, but of course I didn't expect anything more (i'd hoped =P).
I decided not to commentate at this point. Do you have any thoughts?
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