The Abbott government has struck a deal with the Palmer United Party to abolish the carbon tax but it still has to pass the Senate
The Abbott government is talking down a quick repeal of the carbon tax, despite reaching a deal with the Palmer United Party.
The lower house passed the repeal bills on Monday, sending them again to the Senate, after PUP leader Clive Palmer told parliament his party’s three senators would pass the bills.
Mr Palmer said his team had struck an agreement with the government in talks over the weekend and Monday morning.
“For Australia to act alone and impose a tax on carbon at this time will discourage investment,” he said.
However, his senators will also move to put in place an emissions trading scheme if Australia’s trading partners do the same.
The talks followed a chaotic Senate session last week in which PUP senators sided with Labor and the Greens to vote down the repeal.
Mr Palmer had been concerned the government had not honoured a previous deal to enforce electricity and gas price cuts with hefty penalties.
The government was also under fire from business for appearing to accept tougher penalties and higher compliance costs without consulting the sector.
Prime Minister Tony Abbott told parliament the bills had been “reworked” over the weekend to ensure compliance with the tax abolition won’t be a burden on business but will deliver savings.
“I am confident we have got the balance right,” he said.
Government Senate leader Eric Abetz told parliament he was “hopeful” the repeal bills would return to the Senate “later this week”.
Asked whether he consulted his cabinet on the Palmer amendments, Mr Abbott said: “Every time the cabinet meets we say we will get rid of the carbon tax.”
Environment Minister Greg Hunt, who reintroduced the bills, told parliament the amendments would ensure that only about 60 electricity and gas retailers and bulk importers of synthetic greenhouse gases would be covered by the price-cut guarantee.
The government has agreed to a penalty of 250 per cent of any cost savings that are not passed on.
While bulk importers of synthetic greenhouse gases are included, the laws won’t apply to importers of fridges, cars and air conditioners.
Mr Hunt said the Australian Competition and Consumer Commission would be able to expand the range of sectors covered “should any concerns arise” about prices.
“Every Australian should be better off,” he told parliament.
The government moved to gag debate saying the Australian people had already decided in September they did not want the carbon tax.
Labor frontbencher Anthony Albanese said it was curious the amendments had come from PUP and not cabinet or the coalition party room.
“This is a case of the PUP, wagging the tail, wagging the dog,” he said.
The opposition failed to amend the bills to establish an emissions trading scheme.
The coalition will need six crossbench votes on top of its 33 senators to repeal the tax.
Mr Abbott said he stood by his promise that households would save an average $550 a year due to the tax abolition.
“What went up with the carbon tax will come down when the carbon tax comes off,” he said.