Craig Kelly (Hughes, Liberal Party) Share this | Hansard source

I can see some head-nodding. Compensation for the carbon tax will be permanent; I believe that is correct. What we have to understand is that the starting price of $23 a tonne goes up and up every year. Therefore, the compensation that we will need to find for this carbon tax also needs to go up and up every year. At $23 we have little more than a money-churning exercise. But, as the carbon price goes up and up and up, if it is to be an effective tax and if it is to change the behaviour that this government talks about then companies will avoid the tax and use other forms of electricity generation. So what will happen is that there will no money going into the pot for compensation but the permanent costs will be there. We have to work out how we are going to fund this shortfall. Then, once we get to the emissions trading scheme, we find that 50 per cent of the cost of buying permits will be sent offshore, so again there is not going to be the money in the pot to fund the compensation. These are massive black holes that we are going to have in our taxation system, caused by this carbon tax. That is why we need to have a closer look at our tax reform. (Time expired)

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