DE LACY - CARBON TAX 'GREATEST ACT OF SELF-HARM'

A FORMER Queensland treasurer warns the Federal Government’s new environmental tax will erode the economy and foreign investment into Australia with no negligible effect on reducing greenhouse gases.

Nimrod Resources chairman Keith De Lacy (pictured) believes the Gillard Government’s carbon tax represents the ‘greatest act of self-harm’ a nation could inflict on itself.

“Economic reform is supposed to bring greater simplicity and wealth to all. However, this tax will hit the most productive parts of the economy,” he says.

“It will affect investment in Australia, lower the standard of living and impact on national wealth, but it will not make a difference to global emissions. We will be a laughing stock and the world will clap its hands and say ‘good old Australia’.”

The former chairman of Macarthur Coal also expressed concern about the increasing bureaucratic hurdles imposed on sovereign investment into the Australian resources sector.

De Lacy made the comments at an Australia-Israel Chamber of Commerce carbon tax forum in the Hilton Brisbane hotel.

“The worst thing about the carbon tax is its levies on diesel and fugitive emissions. These will affect the three owners of coal mines, including those who own, farm and produce it,” he says.

“China’s carbon tax is just playing games with the world. The country is building a coal power plant every week. There is no way they will develop their affluent society without increasing fossil fuel consumption.”

Ecospecifier CEO David Baggs believes economic impacts of the tax will be temporary.

“It will create a short-lived inequity, but the carbon tax is a small step towards addressing the world running at 147 per cent of our ecological capacity – projected to grow to 300 to 500 per cent by the year 2050,” he says.

“Businesses and governments won’t be the driving factor in solving the issue; it will be led by consumer markets. People can buy less stuff to eliminate the bulk of emissions.”

AECOM economics director David Adams views the carbon tax a market scheme that will not be as big or disruptive as the Goods and Services Tax was when introduced by the Howard Government in 2000.

“With a carbon price of $23 a tonne the consumer price index impact by 2013 will be 0.6 per cent. About one third will come from electricity price rises, one sixth from higher food costs and the remainder from other things. The total value of carbon permits will be $8.5 billion,” he says.

“Businesses should pass the cost onto consumers. The ACCC won’t complain a lot about the higher prices so long as there is a reason.”