Repeal of the carbon tax

The Palmer United Party (PUP) Senate team will back the repeal of the tax only if legal guarantees are in place to ensure energy companies pass on savings to consumers.

Mr Palmer said that the climate tax sets a price on carbon high above the international price and in doing so “disadvantages Australians and that is why it should be repealed”.

• Palmer and PM talk carbon tax over breakfast
• Strange bedfellows: Clive Palmer and Al Gore

New emissions trading scheme

The PUP also wants a new emissions trading scheme drafted with a zero-dollar starting price, plus the retention of key climate bodies.

Abbott’s position on carbon tax

Mr Abbott came to office in September 2013 promising to abolish Labor’s carbon tax and replace it with a $2.5 billion Direct Action plan, but from July 1 will need the support of six out of eight crossbench senators to pass the repeal and abolish climate-related bodies.

Mr Palmer will support the repeal, with conditions.

Direct action plan

The central feature of the government’s Direct Action Plan for climate change is the Emissions Reduction Fund, which will commit $2.5 billion to reducing Australia’s carbon emissions to 5 per cent below 2000 levels by 2020.

Palmer wants to axe the Direct Action Plan and calls it a “waste of money”. His ETS would be activated only when Australia’s global trading partners, such as China, the US and Japan, enact a carbon price.

Clean Energy Finance Corporation and Climate Change Authority

The PUP will oppose the abolition of the Clean Energy Finance Corporation (CEFC) and the Climate Change Authority and allow the renewable energy target to continue until at least 2016.

CEFC is a $10 billion loan facility created by the Gillard Government which invests in renewable energy projects. The Coalition Government does not support its operation and has asked it to stop making loans.

The Climate Change Authority advises the government on the setting of carbon pollution caps.

Labor’s response

A spokesperson for opposition leader Bill Shorten said that it was now time for Tony Abbott to “acknowledge the flaws in his expensive, inefficient and ineffective Direct Action policy”, according to a report by the Sydney Morning Herald.

“Whether or not Clive Palmer’s proposal delivers an effective scheme remains to be seen. The ball is in Tony Abbott’s court – he’s the Prime Minister.”

Government’s response

Environment Minister Greg Hunt said that Palmer’s announcement was “good news” and looked forward to working with the PUP, according to a report by The Australian.

“We welcome the fact that the carbon tax will be repealed – that’s the unambiguous message from tonight,” Hunt said after the press conference.

Green’s response

Speaking on ABC’s 7:30 program, Greens leader Christine Milne said that she welcomed the fact that Palmer supported the Renewable Energy Target, the Clean Energy Finance Corporation and the Climate Change Authority.

“I don’t know whether Clive Palmer actually understands we’ve already got an emissions trading scheme, that’s it’s legislated, that it’s already linked with the European Union and it’s working,” said Milne.

Interest group responses

The Australian Industry Group, the Minerals Council of Australia and the Business Council of Australia said that the cost of delaying a repeal of the carbon tax, one of the highest in the world, would hurt business.

“The groups are urging senators, many of whom were elected on a platform of repealing the carbon tax, to honour their commitments to their constituents and remove the impost which is making our key industries less competitive every day it stays in place,” they said according to a Financial Review report.