Abbott’s carbon claim ‘not wrong’

August 6th, 2013

Tony Abbott, with wife Margie and the candidate for Dobell Karen McNamara (on left) talk about the cost of living with the Florimo family.
Source: News Limited

TONY Abbott’s claim that axing the carbon tax will save “average families” $3000 over the next six years is not “wildly wrong”, a leading economic modeller says.

The Opposition yesterday released a nine-page document called “The Coalition’s Policy to Scrap the Carbon Tax and Reduce the Cost of Living” that restated getting rid of a price on pollution would be its “first order of business” should it win Government.

The policy document does not contain any explanation of how the $3000 saving is determined. When Mr Abbott’s office was asked to substantiate the claim, it initially said the figure was based on the Gillard July 2015 timetable for moving to an Emissions Trading Scheme, or ETS.

However, since returning to the prime ministership, Kevin Rudd has vowed to switch to an ETS more quickly. An ETS uses a market or “floating” price for carbon – not a fixed price.

At the moment, the market price of carbon is about one quarter of the fixed price on which the carbon tax is operating.

A spokesman for Mr Abbott initially rejected the relevance of Mr Rudd’s plan because it would only apply if Labor won on September 7.

“There’s no law that says there will be a floating price from next year – there’s none,” the spokesman said. “It’s a moot point.”

However, two minutes later the spokesman said the $3000 figure did factor in an early move to an Emissions Trading Scheme and was calculated used Treasury modelling.

The Opposition would not release the calculations. It would not say was an “average family” was.

National Centre for Social and Economic Modelling principle research fellow Ben Phillips said: “$3000 would probably be an upper estimate and it would probably not be wildly wrong.”

But it all comes down to the future market price for carbon, he said.

“No one’s got a clue, really, to be quite frank about it,” Mr Phillips said.

The Coalition also declined to respond to queries about a table in its “Scrap the Carbon Tax” policy document which compares the differences between it and the Government. The table appears to use incorrect percentages.

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