Prime Minister Tony Abbott’s conservative coalition government angered environmental activists and soothed voters by making good on its promise to ax Australia’s unpopular carbon tax on Thursday.
The tax on energy producers was a product of the left-of-center labor government that passed the 24.15 Australian dollar ($22.60) tax per metric ton of carbon dioxide a few years ago. Conservatives rose to power in part by opposing the trickle down tax that would hit industries and ultimately consumers.
The Australian Senate voted 39 to 32 to remove the tax as conservative lawmakers burst into applause when the final tally was announced. The repealed tax was in effect for about two years.
Prime Minister Tony Abbott’s coalition government campaigned on ridding the nation of the carbon tax burden, reminding voters that the tax failed to reduce pollution while inflating the household electric bills of consumers already burdened by high taxes.
For their part, many left-leaning politicians in favor of the tax found that supporting it was the surest way to have voters show them the exit door to the political stage.
Mr. Abbott and his coalition government promised not to abandon the fight to reduce pollution. He plans to replace the measure with a taxpayer-financed AU$2.55 billion fund to pay industry incentives to use cleaner energy.
In theory, his plan gives industries a reason to cut pollution without instituting a tax which simply raised the price of electricity for everyone.
"Today, the tax that you voted to get rid of is finally gone: a useless, destructive tax which damaged jobs, which hurt families' cost of living and which didn't actually help the environment," Abbott told reporters in Canberra.
The Labor Party led by former Prime Minister Julia Gillard early on said it would not introduce the tax on carbon emissions. However, after leading her Labor party to power in 2010, she reached out to the minor Greens party to form a government.
Turns out, the move was the beginning of the end for her odd-fellows coalition. The tax was passed but as Australians' household power bills soared, Gillard’s shaky coalition plummeted in popularity. Proponents of the tax claim the tax was only part of the reason for increases.
However, voters were not buying it, and instead voted in Prime Minister Tony Abbott’s conservative coalition on the promise it would get rid of the tax. Abbott said Thursday that families will see AU$550 in savings each year since the tax is gone.
Heavy industry and big business supported abolition of the tax, including the Australian Chamber of Commerce and Industry, which referred to the levy as a dead weight on the Australian economy.
"It really did impact on the competitiveness of many Australian businesses and of course it put up the price of power," the group's CEO Kate Carnell said. "So it's a good step forward for competitiveness and also for employment in Australia."