The Federal Government and the Opposition last night agreed to several amendments to the proposed Carbon Pollution Reduction Scheme (CPRS), including a doubling of assistance to the coal industry.
The Australian coal industry will now receive $1.5 billion in compensation from the Government over the next five years, up from the $750 million that was initially promised.
In addition, electricity generators will have their assistance increased by $4 billion to a total of $7.3 billion.
While welcomed in principal, coal industry representatives are far from satisfied with the proposed amendments.
“The ‘concession’ in the CPRS package will mean that the Australian coal sector will pay $12.5 billion rather than $14 billion in carbon costs to 2020,” Minerals Council of Australia chief executive Mitch Hooke said.
“The short-term assistance on electricity prices, while welcome, will provide only fleeting assistance, and will not address the entrenched competitive disadvantage that the CPRS will impose ahead of matching action by other nations.”
Queensland Resources Council chief executive Michael Roche said the coal industry was ‘profoundly disappointed’ at the minimal reduction in taxes.
“This is a disappointing result for the coal industry that still leaves big risks hanging over jobs in regional Queensland for no environmental benefit,” he said.
“Even with a doubling of assistance to ‘gassy’ mines, the risk to jobs will re-emerge more strongly as assistance dries up after 2015.”
Hooke said that no other major coal producer around the world will face the same carbon reduction costs that the Australian industry will.
He also warns that export industries remain exposed by the scheme.
“Even after the amendments, only 10 to 15% of Australian minerals exports, which operate in fiercely competitive global markets, will receive any shielding from the world’s highest carbon costs,” Hooke said.
Roche agrees that the CPRS will pose a major disadvantage to the Australian industry in the international market.
“Every tonne of coal not produced in Australia as a result of to this tax will simply be produced by our competitors who are not being penalised in the same way by their governments,” he said.
The proposed amendments amount to extra spending of $7 billion over 10 years, including $1.1 billion to create a new program to reduce the impact of electricity price rises on small and large businesses.