Monday, July 11, 2011

The Carbon Tax Fiasco

The Australian government is currently in the process of introducing a new carbon tax. The purpose of this tax supposedly is to bring down carbon emissions. 

They “explain” this in the following diagram:


But I don’t understand how it works. I am just a normal run-of-the-mill stupid taxpayer.

What they claim to be doing, is as follows:

Tax the 500 largest carbon-polluting companies in Australia, (like energy producers). Use half of that tax and refund it to the public in the form of a tax cut or a payment to make up for the increase in costs that will be passed on to the end-user.

Somehow, this will make these large companies reduce their emissions. It will also make the “greener” alternatives more attractive and competitive on a cost basis, and therefore we will all live happily ever after.

What they don’t say is that no one actually has to reduce their carbon output. To me, this looks like a way for the government to collect more tax revenue and pass it on to the tax-payer, creating a more socialist state. Depending on how you position yourself, this could be a good or a bad thing, but actually has nothing to do with pollution!

My point here is that even though things will cost more, the government is supposedly going to hand out rebates so that the average Australian can cope with these costs. Which means that the coal-powered power station can keep on polluting as it always has, and because they now pay more tax, they are justified in increasing their electricity prices, for which the good old government will refund the average household. How easy.

The basic reason for all of this is that so-called greener alternatives are much more expensive than burning coal. The government wants us to get used to paying much more for our electricity bills (and anything else for that matter) than we need to, and they’re forcing up the price of existing technologies just so that green alternatives can become synthetically competitive.

Imagine this scenario: the power generators actually start reducing their carbon pollution footprint. This means that they pay less carbon tax, which means our wise government does not have the tax revenue to pass on to consumers, even though the average consumer will now still be paying much more for almost everything they consume. The government will run into even more debt or will stop the rebates.

Not exactly a win-win situation if you ask me. The logic that is being applied here is based on way too many assumptions. Only politicians can come up with stupid ideas like these. Politicians who only worry about the next election and the current status quo.