http://www.abc.net.au/pm/content/2011/s3265860.htmELEANOR HALL: Joining me now is our economics correspondent Stephen Long.
Stephen will the Government's plan be effective in transforming Australia's economy and reducing carbon emissions, or are there too many exclusions?
STEPHEN LONG: I think the answer is yes and yes Eleanor.
In an economist's ideal world you would have no exclusions. You would put a carbon price on all activity that generates pollution in the form of carbon emissions and let the market work. But we don't live in an ideal world. The political reality is there's going to be exclusions, there's going to be subsidies. That's the way it works.
Will it have an impact on reducing emissions? Well clearly it will.
On the Treasury's modelling - the equivalent of taking 45 million cars off the road. And it will do that by essentially putting a price on carbon and shifting activity away from high polluting industries to lower polluting industries and consumption, capital labour to those industries through the price mechanism, it does make sense.
and
ELEANOR HALL: So what is likely to be the overall effect on jobs?
STEPHEN LONG: The overall effect of jobs is there will be some jobs foregone compared to not having a price but there'll still be huge growth in employment even with a carbon tax. By 2020 we're looking at having about 1.6 million more people employed in Australia than we do now.
On Abbott’s crap non-policy:
http://www.abc.net.au/pm/content/2011/s3265879.htmELEANOR HALL: Now back to our economics correspondent Stephen Long.
Stephen we heard earlier that the Coalition leader Tony Abbott is not letting up on his fight against this carbon tax, but is Nathan Fabian right when he says this will be very difficult to roll back once it's in place?
STEPHEN LONG: I think he is because once big business and global businesses have made investment decisions on the basis of this, if it's overturned it will damage Australia's reputation internationally and I don't know of a government in Australia's history and very few governments overseas that have overturned a major policy in this way.
ELEANOR HALL: Tony Abbott's got some of his lines already in place though. This afternoon he said this was all economic pain for no environmental gain. Is he right?
STEPHEN LONG: No. In short, no. If the Treasury estimates are right and of course that's a caveat but they look credible, you're going to have a situation where the increase in cost of living is relatively modest and the revenue that the carbon price generates will more than offset that for a large number of households.
On the Treasury's modelling you're looking at more than four million households - and bear in mind there's less than nine million households in Australia - who will receive more than the cost, about 20 per cent more than the cost out of their purse and about six million who will be left roughly the same.
So he's not right but there's an issue with the tax thresholds, which I know you're aware of, which means that he'll have a very strong line of argument to sell to the public that this is going to be a tax increase.