Chapter 1
Inquiry into a carbon tax
Terms of reference
1.1
On Thursday, 30 September 2010, the Senate established the Select
Committee on the Scrutiny of New Taxes to inquire into a broad range of matters
relating to taxation, such as:
(a) new taxes proposed for Australia, including:
(i) the minerals resource rent tax
and expanded petroleum resource rent tax,
(ii) a carbon tax, or any other
mechanism to put a price on carbon, and
(iii) any other new taxes proposed
by Government, including significant changes to existing tax arrangements;
(b) the short and long term impact of those new taxes on the
economy, industry, trade, jobs, investment, the cost of living, electricity
prices and the Federation;
(c) estimated revenue from those new taxes and any related
spending commitments;
(d) the likely effectiveness of these taxes and related
policies in achieving their stated policy objectives;
(e) any administrative implementation issues at a
Commonwealth, state and territory level;
(f) an international comparison of relevant taxation
arrangements;
(g) alternatives to any
proposed new taxes, including direct action alternatives; and
(h) any other related matter.[1]
1.2
Given the extensive scope of the terms of reference the committee resolved
to report to the Senate on a subject by subject basis as each matter referred had
been inquired into.
1.3
This report sets out the committee's findings of its inquiry into a
carbon tax.
Conduct of the inquiry to date
1.4
Following its establishment and the resolution to inquire into the terms
of reference on a subject by subject basis, the committee advertised its
inquiry into a carbon tax in the national press (The Australian) and
invited written submissions by 29 April 2011. Details of the inquiry were
published on the committee's website.[2]
The committee also wrote to a large number of stakeholders inviting submissions.
Given the strong interest in the inquiry, submissions continued to be lodged
after the closing date.
1.5
To begin with, the committee received 61 submissions. After the release
of the government's climate change plan, which included a carbon tax, on
Sunday, 10 July 2010, further submissions were received. In total 102
submissions were received. A total list of the submissions received can be
found in Appendix 1.
1.6
Initially, five public hearings were held in Perth, Melbourne and
Canberra between March and June 2011. Following the announcement of the Clean
Energy Future Legislative Package on Sunday, 10 July 2011 a further series of
public hearings were held in Sydney, Brisbane, Tamworth, Mackay, Canberra and Geelong.
1.7
The witnesses who appeared before the committee at its hearings are
listed in Appendix 2.
Acknowledgement
1.8
The committee extends its sincere thanks to all parties who contributed
to, and participated in, the inquiry process by making submissions and/or
appearing before it.
Structure of the report
1.9
This report into a carbon tax is comprised of 10 chapters.
-
Chapter 2 provides an introduction and background into
Australia's emissions profile, as well as a brief history of recent events in
Australia's climate change policy. It charts the recent development of the Rudd
and Gillard Labor governments' climate change policies.
-
Chapter 3 contains an overview of the carbon tax.
-
Chapter 4 looks at the impact of the carbon tax on Australia's
emissions-intensive trade exposed sectors. These industries are the ones that
contribute so much to Australia's economic prosperity and include the mining,
steel, aluminium industries as well as manufacturing industries.
-
Chapter 5 considers the needs of the electricity industry under
the carbon tax. As a fundamental part of modern Australian life and key input
into Australia's key industries, the ongoing effectiveness of the electricity industry
is too important to be put at risk by the carbon tax.
-
Chapter 6 provides an overview of the impact of the carbon tax on
regional and rural Australia.
-
Chapter 7 provides an overview of the impact of the carbon tax on
households and the cost of living. This chapter highlights the risk to the
budgets of everyday Australian's under a carbon tax.
-
Chapter 8 looks at the impact of the carbon tax on Australia's
economy and the Budget.
-
Chapter 9 looks at the impact of the carbon tax on Australia's
transport industry.
-
Chapter 10 assesses the Treasury modelling.
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