Dr Dennis Jensen MP

The Labor government, desperate to regain some traction with the electorate following Gillard’s blatant lie, “there will be no carbon tax under the government that I lead”, have resorted to bribing the Australian people with a promise that simply does not add up.

We’re promised all of the money paid in the form of a carbon tax (in Labor Orwellian speak “carbon price”) will be returned to taxpayers in the form of compensation. Some have even been promised overcompensation for the impost they will be hit with under the Carbon Tax, in a feel good grab for votes.

This is simply not true. Since coming to power Labor has exponentially grown its commitments to the electorate and employed an additional 24,000 public servants to administer its programs, schemes and disasters.To redistribute wealth under the Carbon Tax the government will have to set up a significant bureaucracy, thousands of workers employed to shift money from taxpayers left pocket to their right. Every attempt at providing handouts, stimulus, subsidies and ‘welfare programs’ merely inflates the economy and places greater economic pressure on all Australians.

On Labor’s record, you can hardly call the Department of Climate Change, numerous multicultural councils, pink batts, over priced school hall, set top boxes and now the Department of Feel Good Compensation as wise use of Tax Payer monies.

However it is the issue of compensation and the level provided that is far more problematic. Calculating compensation for a fixed price on carbon dioxide is hard enough. The Government must determine the exposure of those low income earners to various price rises as a result of carbon dioxide taxes. Current predictions have the yearly cost to the Government at $6 billion dollars. But I doubt the government will be paying everyone for costs like the increased cost in constructing houses, on average $6000 dollars.

The more difficult question is, what happens when the Tax becomes a “market mechanism” or emissions trading scheme? It is difficult enough to determine compensation in cases of fixed expenses, but what about compensation in a market as volatile as that for carbon dioxide?

Take the European experience, highlighted in The Australian, June 28th. The article highlighted the volatility that has occurred in the market in the last two years. Yet a review of its entire history shows that this markets volatility is much worse than the last couple of years might indicate. The carbon price has varied between less than €1 to more than €30. How do you compensate fairly for this degree of price volatility?

Let’s put this experience in an Australian context. If the government decided to compensate based on an assumed price of $30 per tonne, and the price came in at $1 per tonne, then the government will massively overcompensate people. Receipts for the carbon credits will be nowhere near enough to pay for the compensation the Government must pay. Come in taxpayer, we will be needing a lot more taxes from you to pay your compensation, thank you very much!

On the other hand, if it is assumed that the price will be $1 per tonne, and compensated accordingly, then those who are supposed to be compensated will receive nowhere near the compensation required if the price came in at $30 per tonne. This will leave all Australians struggling unaided with higher bills. Obviously, these are extremes, but the inherent problem is clear.

In this unprecedented period of economic growth in Australia’s history, the Federal Government is wasting our finest opportunity. A passion for equality under their Carbon Tax sees rampant social justice and welfare spending make vain the hope for freedom and prosperity. The freedom I refer is freedom from taxation, freedom from social engineering and freedom from unjust wealth redistribution, for all Australians.

The simple fact is that the Gillard Government is being deliberately disingenuous on this issue, and they know full well that they will never be able to compensate people with the introduction of the ETS. Any attempt to spread prosperity “to every post code”, still ends up with existing disadvantage in Australia. They are more interested in buying votes in the short term, while in the long term the nation, far worse off as a result of this insidious policy.