I think the Gillard government's Carbon Tax is flawed to it's rotten core, and needs to be scrapped. We need to start again. This post explores why I think this, and outlines the approach I would like to see in legislation for future programs of this type.
DISCLAIMER: I am not an expert on legislation or tax law. Nor am I paid by anyone to put my view. I am an ordinary tax payer with real concerns about where my tax dollars go and how effectively they are spent. I am not affiliated with any political party.
Despite promising not to during the election campaign, the Gillard government commenced this tax in July 2012. It is a $23/tonne tax on the carbon (CO2) emitted by 300 of the top polluters in Australia. These taxed companies are permitted to on-charge the tax down the supply chain as they desire. There is no requirement for them to report the amount paid down the supply chain, but companies who do report their carbon tax impacts and are deemed to have misrepresented that impact will be prosecuted to the full extent of the law, risking massive penalties. The Gillard government waged a savage campaign against all businesses that dared to suggest any significant impact. In my view it bullied them into silence.
It's NOT a Carbon Price - it's a TAX
The Gillard government strenuously denies it's a tax. They say it's a price. I say it's a tax. Price is a value placed on something by the market. It is placed on all instances of that something. The price varies based on supply and demand as it is traded between entities. A tax is a levy imposed by governments from time to time. It has no constraints as to amount, or from whom it is collected. It is entirely determined by government decree. It's obvious that the carbon tax is exactly that - a tax. If it was a price, the market would set it and it would be on all carbon produced, not just that of a few companies.
Why Do Anything?
I support that we all need to reduce pollution wherever possible. Whether it's due to climate change or just because we want cleaner air, water and soil, I think it's important we do something. I support a broad-based tax that goes directly into Australia's effort as a country to improve the quality of our lives and make the future as clean as possible for our descendants. Most Australians want this, and I believe we are prepared to each make a small contribution to see that happen - as long as it's fairly distributed.
The Name needs changing!
I dislike the term 'Carbon Tax'. It should be 'Emissions Tax'. After all we are not just talking about carbon. Apart from the greenhouse effect, CO2 is arguably beneficial to plant life. It's all the other toxic chemicals emitted by our factories and fossil power stations that do the real damage!
The Spirit of the Thing
I want to play an active part in curbing unnecessary emissions that pollute my environment. I want to be able to see and measure my contribution, and to track how it's used. I believe most Australians want that too. We want our government to be the custodian of the process and the execution, and to provide legislative rigour to fair and equitable distribution of our collective contributions into worthy causes based on science, not politics or vested interests. Be it innovative energy sources or factory plans to reduce their emissions, I would like to see my tax money at work and to follow how recipients use it. That's the spirit!.
The Importance of Transparency
I know what you're thinking. You think I'm talking about transparency. Yes I am! The most important aspect of this tax is transparency. Governments of all persuasions talk it up in spades during election campaigns, but rarely get close to walking the talk. Every transaction that involves this money must show clearly the amount collected or claimed - right there on the invoice or receipt. No exceptions. We must encourage affected entities (people or businesses) to report their liability or benefit, not force them to hide it.
By making the tax liability calculations impossible to compute, making reporting non-mandatory, and by imposing outlandish penalties for affected entities that try but get it wrong, the Gillard government has effectively made it impossible for anyone to hold them and their policy to account. To me, that's a shameful, deceitful act by a government with serious failures to hide. I would respect a government that made a mistake and wasn't afraid for people to see it far above one that seeks to hide it away and lie about (spin) it.
Honesty is the best policy (and it might just protect you from those who would spin against you!).
Don't Demonise the Polluters - We need them!
Another aspect of this Gillard tax that I loathe is that it demonises the polluters. We as a nation have relied on these industries for many decades for jobs, energy, exports and manufactured goods. It abhors me that this tax hypocritically now penalises them in isolation for doing what they have been doing with our blessing for so long. We need a set of policies designed to help them develop cleaner ways of continuing their service, based on open transparency and mutual trust. No one want to see their costs spiral out of control forcing them to cut jobs or move offshore. A Labor government above all should recognise this!
Keep it Simple
I find this Gillard tax to be complex and dependent on too many things outside the control of government and the people it serves. The government needs to compensate people for a tax it levies on these polluters because otherwise the burden would be too high. But where does this money-go-round stop? The government can't keep compensating forever, and where's the real incentive for polluters to reduce their tax burden when they can just pass it on down the supply chain? I agree with the LNP on this. It is an unnecessary fiscal and regulatory burden on the taxpayers and businesses trying to compete on international markets.
A Better Alternative
This tax should be all about consumption. As we consume goods and services, we pollute our environment. We should have a tax that's low enough to bear, but high enough to make a difference. It should be simple and it should be transparent. I would like to see the GST increased to 11%, with the extra 1% to go directly into a federal fund for distribution by a government-business-scientific panel to innovations that reduce polluting emissions, fully accountable to the people. People and businesses come up with the schemes to reduce emissions, and apply for grants to the panel, who decides the amount based on sound scientific evaluation. Yes, some investments may not work out. We should all be prepared to accept that. But it must be transparent right down to the plans themselves and the money supplied.
Yes, I Know
I'm sure there are those out there who will supply all manner of reasons why this is unworkable. I don't accept ANY of them. The problems of systemic and prolonged pollution are obvious and very serious. If we have an honest, accountable, fearless, focussed and determined government, I know we can do this. Is it too much to ask? LET'S ASK ANYWAY.