Carbon tax puts more pressure on energy prices as blackouts loom

31/08/11

The Gillard Government has been caught out downplaying the true extent of the price rises that its carbon tax will cause, Shadow Minister for Energy and Resources Ian Macfarlane said.

“Reports today quote modelling from the Energy Supply Association of Australia which shows that the energy market uncertainty that the Gillard Government’s carbon tax will cause could translate into a price hike of up to 60 per cent for the largest electricity users, over and above the direct impact of the carbon tax,” Mr Macfarlane said.

“Yet Government Ministers expect Australians to believe there will be no pain from the introduction of a carbon tax.

“The Gillard Government has already been exposed for dancing around the fact that the main objective of its carbon tax is to jack up the price of electricity and to make everyday activities such as heating or cooling homes or running equipment for businesses more expensive.

“Now this research provides more evidence of how destructive the carbon tax will be because it will force power generators to pay up front for permits and lead to a downgrade to supply contracts.

“The evidence just keeps piling up to show that the carbon tax will do nothing but undermine the Australian electricity sector.

“State electricity assets in Queensland and New South Wales are facing multi-billion dollar write downs in value because they are ineligible for compensation.

“On top of that, the Australian Energy Market Operator has warned that Queensland, Victoria and South Australia are facing the prospect of blackouts within the next two to three years unless there is more investment in power generation.

“Yet the Gillard Government wants to put more pressure on the energy market and discourage investment by implementing its carbon tax.

“The Gillard Government is now faced with a mountain of evidence that shows just how damaging its carbon tax will be for the Australian economy.

“It’s time to dump the toxic tax.”