Wong backs Treasury on carbon modelling

29 Aug 2012, 6:52 am   -   Source: AAP
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Labor announced Australia's scheme will be linked to the European carbon market from July 1, 2015, saying the change was good news for businesses and households. (AAP)

Labor announced Australia's scheme will be linked to the European carbon market from July 1, 2015, saying the change was good news for businesses and households. (AAP)

Finance Minister Penny Wong says Treasury modelling of the carbon price has proved correct on some aspects already and should hold strong in the future.

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Finance Minister Penny Wong says she has faith in Treasury modelling of the carbon price.

She believes removing the floor price for an emissions trading scheme, as announced on Tuesday, won't cause a budgetary black hole for the federal government.

Labor announced Australia's scheme will be linked to the European carbon market from July 1, 2015, saying the change was good news for businesses and households.

But the budget bottom line could be affected if the international carbon price remains low - it's currently just under $10 a tonne - because of the potential impact on commonwealth revenues.

Businesses would pay less to pollute, although Australians would still receive guaranteed compensation via tax cuts and increased welfare payments.

The Treasury modelling predicts an international carbon price of $29 a tonne in 2015/16 is strong and has been backed by several senior ministers.

Senator Wong said the modelling had been proven correct on other aspects of the carbon pricing scheme, such as the impact on electricity prices.

"They've come in pretty much bang on where treasury estimated them to be," she told the ABC from Washington, DC.

"(It) remains the most extensive modelling on a whole range of aspects of carbon pricing including the international price."

The finance minister said while spot prices for carbon moved around like any other commodity, it was the longer term trend that was more important.

And she stressed the government had no plans to remove any parts of the household compensation package, which includes tax breaks, no matter what the carbon price does.

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Your Comments

Wong again Penny

James - from Nowra, 10 months ago

With all Europes financial woes it seems highly unlikely that even countries which donot rely on mineral exports to sustain their economies will be verry reluctant to increase the price on carbon emissions, but where does that leave Labour forcasts of a budget surplus Penny?

Paying for pollution = reducing pollution => some new Australian theorem...

Berengere - from Coogee, 10 months ago

Australian labor seems to forget that in Europe while the carbon pricing is not a new concept the efforts are made to actually reduce the emissions! You have to be dumb to think that pricing the pollution only will reduce the pollution, unfortunately doesn't look like that logic has reached the far land of down under... So please stop talking about Europe to justify your financial non sense! That same Europe you keep on despising otherwise...

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