The Green Party-backed Labor prime minister Julia Gillard imposed a carbon tax in Australia in 2012, dubbed the “Clean Energy Act.” The carbon tax was an instant debacle and those responsible were promptly kicked out of office by voters. Then-candidate for Prime Minister Tony Abbott said, “More than anything, this election is a referendum on the carbon tax.” He was right. Citizens protested the carbon tax, and voters kicked the carbon taxers out of office in September 2013. The carbon tax was repealed in 2014.
“It became really clear that it was very damaging to Australian living standards. It was raising electricity prices particularly, and it was raising the cost of basic household consumables,” said Dr. Chris Berg, adjunct fellow at the Melbourne-based Institute for Public Affairs.
Here’s a recap:
In August 2010, Green Party-backed Labor prime minister Julia Gillard said she was against a carbon tax: “There will be no carbon tax under the government I lead” before the election but quickly flip flopped in October 2011 after she had won the election. “This is a significant day for the Australian nation, not just for today but for the generations to come,” she said.
The burden of the carbon tax was borne by households. Companies just passed on their higher costs to households. The tax increased the cost of electricity for the average family by 10% in the first year.
The carbon tax hurt workers. The Australian job market had previously been stable, but after the introduction of the carbon tax, the number of unemployed workers increased by more than 10%.
Businesses suffered massive losses. Other industries that are highly competitive such as airlines suffered massive losses. Virgin Australia alone reported about $25 million in losses in just six months. The tax also made Australian exports globally less competitive, intensifying the country’s recession. Approximately 75,000 businesses paid the carbon tax directly or paid a penalty as an equivalent.
Cost of living went up. The introduction of the carbon tax was estimated by the Treasury to have increased the cost of living of households by around AUD 9.90 per week on average, and increased the Consumer Price Index by 0.7 percent.
Electricity bills for employers went up. The impact was more significant for small and medium sized businesses with up to 30% higher electricity bills.
July 8, 2010 — Green Party-backed Labor prime minister Julia Gillard rules out carbon tax
“There will be no carbon tax under the government I lead.”
February 24, 2011 – Gillard flip flops, unveils carbon tax plan. Opposition declares it a “historic betrayal.”
Prime minister Julia Gillard unveils plans for a carbon tax. Opposition leader Tony Abbott describes it as a “historic betrayal” given Ms Gillard’s promise before the election that her government would not implement a carbon tax.
Tony Abbott predicts the public will respond in a “people’s revolt.” He confirms the Coalition will repeal the carbon tax if it wins the next election.
“If the Coalition wins the next election you can be absolutely confident there will be no mining tax and no carbon tax.”
July 1, 2012 — Carbon tax imposed
The carbon tax starts on July 1, 2012 and raises $3.8 billion in its first six months.
July 14, 2013 – Government claims it will “terminate” carbon tax
After returning to the prime ministership in June, Kevin Rudd again changes the Government’s stand on carbon emissions, announcing it will “terminate” the carbon tax a year earlier than planned. Opposition leader Tony Abbott points out the government is not really abolishing the tax but merely changing its name. He says the election will be a referendum on the carbon tax.
September 7, 2013 – Anti-carbon-tax coalition wins federal election
Tony Abbott says legislation to abolish the carbon tax will be before Parliament within 100 days of his victory. On September 7, the carbon taxers were booted out of office by voters and Abbott was sworn in as Australia’s 28th Prime Minister on September 18.
On July 1, 2014, the carbon tax was repealed.