Australia's carbon tax is set to become law after the lower house of parliament passed the government's historic but controversial set of bills to establish the world’s most broadly based carbon pricing scheme.
Against last-minute efforts by the opposition to delay the passage of the bills and 11th hour pleas for amendments by some business groups, the government passed its 18 pieces of legislation by a vote of 74 to 72 just before 10am.
The vote in the lower house, which was applauded by Labor MPs and spectators in the public gallery, was the crucial test for the government given its wafer-thin majority. The bills will now go the Senate for debate but will pass comfortably with help from the Greens, probably in November.
After the vote, Prime Minister Julia Gillard embraced Climate Change Minister Greg Combet, who had the difficult job of steering the policy, and even exchanged a peck on the cheek with Foreign Minister Kevin Rudd, whose reported ambitions to retake the leadership are proving a headache for the Prime Minister.
The passage of the bills are a crucial victory for Ms Gillard, whose popularity has steadily fallen since last year. The legislation means that about 500 of the biggest carbon-emitting companies in Australia will pay a price for each tonne of carbon. Most of the biggest emitters are electricity generating firms, mining companies and heavy industry manufacturers.
To compensate households, the government is cutting income taxes and boosting payments such as pensions and other benefits, as well as offering various lump sum payments.
The average household is expected to pay about $9.90 a week in extra living costs, including $3.30 on electricity. However this will be offset by an estimated $10.10 in extra benefits and tax breaks. The Australian scheme will cover about 60 per cent of Australia's emissions, making it the most broad-based in the world.
Shortly before the vote, Mr Combet told ABC radio today was the culmination of a long and often gruelling debate.
"Look it's been very bruising political argument, that's quite right," he said. "If you fast forward 12 months time and the legislation is through, the carbon price, emissions trading scheme is in place and the economy is managing to deal with the reform, the cost impacts are modest as we have been saying, we'll have applied tax cuts and increases in the pensions and family tax benefits, nine out of 10 households receiving some assistance to adjust with this reform."
Opposition Leader Tony Abbott has vowed to repeal the legislation if he becomes prime minister, though the government has insisted he will not be able to manage that.
The bills were passed with help from crossbench MPs Rob Oakeshott, Tony Windsor and Andrew Wilkie, as well as Greens MP Adam Bandt.
The lower house also passed the government's Steel Transformation Plan, which will deliver $300 million in assistance to steel makers who are considered especially vulnerable to international trade.
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10.52am: Conservation groups have predictably welcomed the passage of the climate bills. Here's a few:
"This has been an ugly and very long debate and we congratulate those who backed this legislation in the House of Representatives and urge the Senate to pass the legislation as quickly as possible." - Climate Institute CEO John Connor.
"Today our MPs have voted yes to creating a stronger economy, yes to new jobs in clean industries and yes to giving our wildlife a fighting chance." - WWF-Australia CEO Dermot O'Gorman.
"Today's vote is historic for the millions of Australians who, in the face of well-funded scare campaigns, have tirelessly urged successive Australian governments to take action on climate change." - Australian Conservation Foundation CEO Don Henry.
10.23am: Herald Canberra reporter Jacqueline Maley makes a good point:
The government members will have to strike a tricky balance today. They will be triumphant they got such a big - and badly needed - win, but gloating is a dangerous activity given the carbon tax is still incredibly unpopular in the electorate, and they know it.
10.19am: How has business reacted to today's announcement? The carbon tax had been flagged and largely priced in by the market, said CMC markets chief market strategist Michael McCarthy. But now the prospect of the Liberals, led by Tony Abbott, repealing the tax extended the uncertainty felt by businesses in planning and investment.
"We now enter a period of uncertainty on an up to two-year time horizon, the tax will be in place but could well be repealed after that period," said Mr McCarthy. "Given the finely balanced nature of the parliament, if we do see an election before it's scheduled, repealing the tax could come earlier. It's now a very difficult choice for Australian business leaders as to which path they take."
10.09am: The carbon tax passage is enough to even bring old adversaries together.
Photo: Andrew Meares
10.02am: MPs have also taken to Twitter to broadcast their thoughts at the carbon tax pricing.
[View the story "Carbon Tax MP reaction" on Storify]
9.58am: Tony Abbott's "pledge in blood" to repeal the carbon tax legislation if the Coalition wins office has been scoffed at by Finance Minister Penny Wong.
"It's a bit dramatic isn't it really, it's like something out of a Boy's Own manual," Senator Wong told ABC television. She said Labor's legislation, which passed the House of Representatives, would provide business certainty.
"I think Mr Abbott is going to have a great deal of trouble if he were to become the leader of the country (in) repealing this," she said. Mr Abbott made the pledge on ABC radio ahead of the vote on the government's bills.
9.55am: Here's a sample of online reaction on the Twittersphere to the passing of the tax:
View "Carbon tax reaction" on Storify
9.49am: What's likely to get the bigger headline tomorrow? The passing of the carbon tax or the fact that the government was so keen to get a win that Julia Gillard actually kissed Kevin Rudd amongst the celebration. Have your say below.
9.41am: The carbon tax explained. It's a big ask but here's the nuts and bolts about the legislation. The biggest question on many people's lips is how much they will receive in the assistance package being rolled out to offset the new tax. Work out an estimate of your figure here.
9.37am: Much applause, hand shaking and congratulations all round as the Clean Energy Future bills pass the lower house. The government secured the passage of the 18 bills with the support of key crossbench MPs, winning the vote 74 to 72.
The lower house also passed the government's $300 million steel transformation plan bill.That vote was won 75 to 71 with Queensland independent Bob Katter joining fellow independents Rob Oakeshott, Tony Windsor and Andrew Wilkie, and Greens MP Adam Bandt, in backing Labor.
9.34am:The Coalition would never be able to repeal Labor's carbon tax, the Prime Minister, Julia Gillard, predicted as Tony Abbott maintained total opposition to all aspects of the plan yesterday. Read Lenore Taylor's latest report from this morning.
9.24am: The Clean Energy Future bills have just been passed by 74 votes to 72 in the lower house. The house is now voting on the government's $300 million steel industry assistance package.
9.21am: The federal parliament has started voting on amendments to Labor’s carbon tax legislation to clear the way for a final vote on the package of 19 bills.
First up, the lower house split on the government’s proposed changes which, among other things, will exempt small rubbish tips for at least three years and make it easier for airlines to "opt-in" to the carbon price. The house will then deal with opposition and crossbench amendments before holding a final vote on the bundle of bills.
The government won the first vote on its amendments 74 to 72. The government also won a vote to sink Opposition Leader Tony Abbott's proposed amendment that would have delayed the start of the carbon tax until after the next election. Labor, with the support of key crossbench MPs, won that division 74 to 72.
The lower house then similarly defeated West Australian Nationals MP Tony Crooks's amendment that would have allowed many businesses in rural areas to keep their diesel fuel rebates. The house then moved to a final vote on the 18 carbon tax bills. There will be a separate vote on the associated $300 million steel transformation plan bill.
9.15am: The politicians are seated and debate is about to begin in the House of Representatives over the government's proposed carbon tax.
The government's job in passing the bill has been made a little easier today with the 24-hour suspension from Parliament last night of opposition innovation, industry and science spokeswoman Sophie Mirabella.
The government also won a vote to sink Mr Abbott’s proposed amendment that would have delayed the start of the carbon tax until after the next election.Labor, with the support of key crossbench MPs, won that division 74 to 72.The lower house then similarly defeated West Australian Nationals MP Tony Crooks’ amendment that would have allowed many businesses in rural areas to keep their diesel fuel rebates.The house then moved to a final vote on the 18 carbon tax bills.There’ll be a separate vote on the associated $300 million steel transformation plan bill.The government also won a vote to sink Mr Abbott’s proposed amendment that would have delayed the start of the carbon tax until after the next election.Labor, with the support of key crossbench MPs, won that division 74 to 72.The lower house then similarly defeated West Australian Nationals MP Tony Crooks’ amendment that would have allowed many businesses in rural areas to keep their diesel fuel rebates.The house then moved to a final vote on the 18 carbon tax bills.There’ll be a separate vote on the associated $300 million steel transformation plan bill.
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