CANBERRA, July 16 (Bernama) -- Australia will terminate the carbon tax and switch to an emissions trading scheme (ETS) with floating price system from July 1 next financial year, Prime Minister Kevin Rudd announced on Tuesday.
According to this decision, the Australian government will move from a fixed carbon price of 24.15 AU dollars (almost US$21.94) a tonne to a floating price of about six AU dollars (almost US$5.45) by July 2014, China's Xinhua news agency reported.
Speaking at a press conference in Townsville, Queensland, Rudd said that terminating the carbon tax will cost the budget 3.8 billion AU dollars (almost US$3.45 billion) over the next four years. According to him, it will save an average family 380 AU dollars (almost 345.25 U.S. dollars) a year.
Australian households would continue to receive financial assistance but handouts to affected businesses would be cut when Australia moves to a floating price emission trading scheme next year.
"The nation's 370 biggest polluters will continue to pay for their carbon pollution but the cost will be reduced meaning less pressure on consumers," Kevin Rudd said.
And this ETS will "boost business competitiveness which will aid the transition from the mining investment boom toward a situation of more broad-based growth", he said in a statement.
The government will make up for the lost revenue through savings, including 1.8 billion AU dollars (almost US$1.64 billion) from changes to fringe benefits tax arrangements relating to employer-provided cars.
Treasury modelling showed moving to a floating rate a year ahead of schedule will ease the cost of living by 7.20 AU dollars (almost US$6.54) a week per family. The impact will be greatest on electricity and gas bills.
This move is expected to save the average household around three AU dollars (almost US$2.73) a week, or over 150 AU dollars (almost US$136.3) in the year, on its electricity bills and around 1.10 AU dollars (almost US$0.99) per week, or 57 AU dollars (almost US$51.79) over the year, on its gas bills.
The Australian government will continue to "maintain strong policies" alongside the emissions trading scheme to drive clean investment through the Renewable Energy Target, the Clean Energy Finance Corporation and the Australian Renewable Energy Agency, a statement from Prime Minister said. Climate Change Minister Mark Butler also confirmed that the government's renewable energy programmes would be "absolutely untouched" by the saving measures. Renewable energy sources such as solar and wind were "utterly central to the programme to combat climate change," he said.