Carbon crusade: Labor’s climate plan to hit blue-chip firms

JOE KELLY
APRIL 2, 2019
The Australian
Scott Morrison has branded Labor’s climate change policy economically reckless, and declared it would impose a “massive tax” on a swathe of Australian companies, including Coca-Cola Amatil, Telstra, Boral and Arnott’s Biscuits.
The Prime Minister signalled that he would turn Labor’s push to cut carbon pollution by 45 per cent on 2005 levels by 2030 into a frontline election issue, challenging Bill Shorten to reveal the ­impact on the economy and jobs.
“Bill Shorten does not have a plan, he just has another tax. That’s all this is,” Mr Morrison said. “What we’ve got here is a ‘re-Rudd’ of a failed policy that costs jobs (and) that costs businesses.”
He also claimed that Labor’s plan to allow only the limited use of international offsets could result in $35 billion being sent offshore by 2030 to foreign carbon traders. “Carbon credits for Kazakhstan — that’s what this is for,’’ Mr Morrison said.
Labor also came under attack yesterday over its pledge that 50 per cent of new-car sales would be electric ­vehicles by 2030. A PwC study referred to by Labor, which was released in ­November, suggested it would take $3.2bn in public and private investment to build the network of charging ­stations to support the electric ­vehicle target.
Business and industry challenged Labor over why it opted not to use Kyoto carry-over credits to achieve its higher targets. Business Council of Australia chief executive Jennifer Westacott said the decision was “concerning”.
“Recent modelling has demonstrated that this will have a significant impact on the rate of economic growth and ultimately the size of our economy,” Ms Westacott said. “We strongly ­encourage the Labor Party to ­re-examine this decision in the coming weeks”.
Energy Minister Angus Taylor said yesterday that the Labor overhaul would have imposed further economic pain on up to 147 companies in 2017-18 for little environmental benefit, arguing the scheme was a new carbon tax.
According to the government list, these included Coca-Cola Amatil, Aldi Foods, JJ Richards & Sons, DP World Australia, McCain Foods and Arnott’s Biscuits among others.
The Opposition Leader said the costs of inaction would be greater than the economic pain imposed by his climate overhaul, saying that extreme weather events had inflicted a national damage bill of $18bn last year alone.
The Labor plan would expand the already ­operational “safeguard mechanism” by applying an emissions cap on companies that produce more than 25,000 tonnes of pollution each year, instead of companies that produce more than 100,000 tonnes of pollution. The effect would be to establish an effective “baseline and credit” system for larger polluters.
Clean Energy Regulator advice to government indicates that there were 255 companies producing emissions above the 25,000-tonne threshold in 2017-18 that would have been captured by the Labor policy. This compares with only 108 companies that the government says would be captured if the policy kicked in at the 100,000-tonne threshold.
“Labor’s climate hit on an additional 147 companies, which produce less than 2.5 per cent of total emissions annually, will at most deliver around 5 per cent of the total reductions they need over the decade to 2030,” Mr Taylor said.
Opposition climate spokesman Mark Butler said the economy would grow by about 23 per cent in real terms over the course of Labor’s plan. “If anything, energy costs under our target will be lower ­because there will be much bigger drive into energy efficiency and there will be a substantial positive investment under our policy as well,” he said. “The difference though is that we’re taking action consistent with expert advice about what is necessary to keep global warming below 2C.”
Mr Butler did not accept the government analysis, saying the safeguard mechanism had been embraced by the Liberals.
“We’ve listened to business who want stability and that’s what this offers. We will consult with industry on the baselines and we will work with entities on their trajectories,” Mr Butler said.
“It says it all that instead of talking about their own budget, the Liberals are attacking Labor’s policies for more renewables and cheaper power. The Liberals want Australians to keep paying more for energy and more for petrol.”
Minerals Council of Australia chief executive Tania Constable said that climate policy should “use all available means — including internationally recognised Kyoto credits — to reduce emissions and to meet our international obligations at least cost”.
Australian Industry Group chief executive Innes Willox sounded concerns about the plan to expand the safeguards ­mechanism, arguing it should be accompanied by easy access to least-cost abatement from “anywhere in the domestic economy, and from credible international options”.
“Moving to a 45 per cent ­emissions-reduction target for 2030 would be a tough ask for many ­industries including those covered by the current safeguard ­mechanism which Labor proposes to ­expand and attach a specific 45 per cent target to as well,” Mr Willox said.
Australian Chamber of Commerce and Industry chief executive James Pearson said his focus was on Labor’s “more ambitious” emissions reduction target, compared with the ­Coalition’s, in terms of “getting power prices down and keeping them down”.