Australia taxes patience of climate change perpetrators - and victims

The upshot of all the fires, floods and cyclones that have wreaked havoc over Australia in the past few months is that everybody has had more new taxes imposed on them, perpetrators and victims alike.

Powered by automated translation

Only a country that has no clear idea where it is heading could think of taxing the industry that is blamed for climate change, taxing the people who have been victimised by it, and then taxing the same industry again for being, well, too successful.
The upshot of all the fires, floods and cyclones that have wreaked havoc over Australia in the past few months is that everybody has had more new taxes imposed on them, perpetrators and victims alike.
If you believe the scientists, the catastrophes have an undoubted source - they are the devastating end product of global climate change. Nobody seems to disagree that the only industry capable of producing outsized carbon emissions is the hugely successful local mining industry.
The catastrophes that have beset Australia in recent months will together cost the country about US$8 billion (Dh29.38bn), and somebody has to pay. Where does the government go first? It has mandated that all those earning above the average wage of $50,000 will pay a flood levy to claw back $1.8bn the government says it does not have to clean up the mess and restore infrastructure.
Next it says it is doing the right thing by all Australians in imposing two new taxes on the alleged perpetrators of all these disasters - a carbon tax on the miners and a mining-wealth tax on their profits. The carbon tax will be imposed next year, to be followed at some point by an emissions trading scheme, where polluters can trade carbon credits.
The public relations in all this is not too difficult to spin. The mining tax will "reinvest" much of the natural wealth harvested by miners and spread it more evenly among the more distressed regions and sectors of the community. The carbon tax forces the bad boys to change their polluting ways.
Of course, the government is just finding excuses to set new taxes - hitting the mining industry for being dirty, and then hitting it again for being so successful. Can it have it both ways? Many remain unconvinced. They have reasons to be doubtful, as many say the carbon tax is not a levy on the polluters, but just another imposition on the population, through the back door.
A carbon tax will lead to higher electricity prices, but that is just the start of it. Small and medium-sized businesses will bear much of the brunt of the costs, which the big carbon emitters will pass directly along their massive supply chains.
The big carbon producers will also be forced to scrutinise all their suppliers - especially those who provide raw materials direct to them - to ensure their own carbon footprint will not being compromised at any level.
Suppliers to emitters that cannot measure their footprint or show that they are sourcing from "clean" materials may lose contracts. In other words, small businesses supplying the powerful carbon producers (the top three of which - Rio Tinto, BHP and Woodside Petroleum - make up 30 per cent of the top 100 share index by capitalisation on the Australian Stock Exchange) are likely to be the most heavily punished by both the carbon tax and the emissions trading scheme that follows it.
What about Mr and Mrs Everybody?
The tax on a tonne of emitted carbon dioxide will then be passed on again to the buyers of petrol, steel, glass, concrete and aluminium, products that are all "emissions intensive". Who loses most? Probably not the big emitters who will have already priced it all in as part of the cost of doing business, but the consuming public.
There is, of course, the final matter of the mining tax, which will flow directly from mining profits "for the benefit of all Australians". The mining industry waged a $22 million advertising campaign last year in an attempt to get the country behind scrapping the tax. It lobbied the politicians in Canberra, warning that the proposed mining tax would force them all to operate offshore.
The government baulked and watered everything down. The original tax, which was forecast to net $99bn in revenue over a 10-year period, will now claw in only $38bn. The mining industry's ad campaign, it's safe to say, got value for its money.
In the end, of course, everybody will be forced to pay something, but if the Australian experience is anything to go by, managing the world's most burning issue may end up becoming a disaster in itself.
 
business@thenational.ae