Kevin Rudd confirms government to scrap fixed carbon price
Source: The Age, 14 July 2013
Prime Minister Kevin Rudd has confirmed the federal government will move to a floating price on carbon one year earlier than expected but says the details of where the money will come from are yet to be finalised.
Mr Rudd said the government wanted to make the change because it would ''take the cost of living pressures off Australian families and still act on climate change''.
However, the government has not released any details about what the exact amount the change in policy will mean for the budget bottom line.
It has not denied speculation the figure would be in the order of $4 billion and $5 billion.
The federal government has promised to keep the household compensation package.
''We have still got a lot of budget work to do,'' Mr Rudd said in Cairns on Sunday before leaving on a trip to Papua New Guinea.
Such a significant saving suggests the government would have to make significant cuts in order to deliver on its commitment to deliver a balanced budget by 2015/16.
Treasurer Chris Bowen earlier confirmed the federal government would stick to its timetable for the return to a balanced budget despite bringing forward changes to the carbon price worth billions of dollars.
Mr Bowen said on Sunday the government had agreed to scrap the fixed carbon price and move to a floating price on carbon on July 1 next year - one year earlier than scheduled.
"I think families will see a big benefit in what we are bringing forward," Mr Bowen said.
Mr Bowen would not provide an exact figure on the cost of the decision but confirmed it would be in the order of several billion dollars.
He said other savings would have to be found in order for Labor to deliver a balanced budget in 2015/16.
Mr Bowen told Channel Ten there would be no change in the household assistance package designed to help consumers with any price changes brought about by the scheme.
The decision marks another step away from policies instituted by former prime minister Julia Gillard since Kevin Rudd returned to the leadership less than one month ago.
Mr Rudd flagged his concern with the fixed price phase as soon as he was returned to the prime ministership late last month. He has also suggested there will be changes in immigration policy.
The change would see the current fixed $24.15 per tonne carbon price dumped in favour of a floating price of between $6 and $10 per tonne.
The government will be hoping the change will result in a drop in electricity prices which would allow it to say it was helping people with the costs of living.
In a statement the Opposition Leader Tony Abbott repeated his promise to repeal the carbon price if he is elected to government later this year.
"Mr Rudd can change the name but whether it is fixed or floating it is still a carbon tax," Mr Abbott said.