Climate change wealth redistribution tax.

Cartoon: Bill Leak.

Its official.

The government’s climate change czar Ross Garnaut wants half of the revenue raised by the Gillard/Brown carbon tax to be redistributed to the poor and middle class. For those of you who consider yourselves to be ‘middle class’ and therefore better off, think again. Whether or not you are in fact middle class will depend on Gillard’s definition, not yours.

He has called for $5.75 billion worth of income tax cuts for low and middle income earners in the first year of a carbon tax. This he said will generate ‘positive effects on income distribution’ as well as national productivity. He pointed out that overall, middle income earners would be better off directly as a result of these arrangements.

He also called for a separate safety net for disadvantaged households, including pensioners and the unemployed, who were unable to improve their energy efficiency without extra help.
There are a grab bag of policies designed to give money to industries the government approves of, marginal seats in disadvantaged areas, (which are referred to as regions likely to have loss of livelihood as a result of the implementation of a carbon price,) and so on. Basically it boils down to total government regulation of production, distribution, and exchange, whereby success or failure will depend on government patronage.

Garnaut is calling for the tax, which he calls market based to be in the order of $26 per ton which will increase average household power bills alone by $300 per year without taking into account other increases that are already a daily reality or those caused by this tax. This figure is not realistic as several major conservation lobbies as well as the Greens already oppose it. All are claiming it is far too low. Gillard will be depending on the Greens to get this passed, so the figure will probably be around double what he is asking.

Food prices are rising worldwide owing to ethanol mandates, which have resulted in around 20% of the world’s corn being diverted to this purpose as well as other grain crops.

To exacerbate this he is proposing, that about 15 per cent of the revenue should be used for carbon farming which he waxes lyrical in claiming it would create the equivalent of a new wool industry for the rural sector in carbon offsets. Carbon farming in the commonest use of the term is the removal of large swathes of productive land from food production into growing trees.

It is widely favored by the same spivs who were the promoters of jojoba, aloe vera, ostrich farming, olives, and tax forests, all of which were given breaks as new generation industries, and all of which have burned most of the investors.

Governments simply do not have the competence to handle such matters as cyclical climate change, especially this one. These are the people who tried to insulate houses and burned them down and killed people plus leaving in their wake a host of other failed schemes.

If in fact they were able to affect the world climate I shudder to think of the result.