A second round of Labor personal income tax breaks will be scrapped but power and gas prices should fall, under new federal coalition legislation to repeal the carbon tax.
Prime Minister Tony Abbott has released a consultation paper and draft bills to fulfil his election promise to abolish the carbon pricing regime that began on July 1 last year.
The bills, due to be introduced when the new parliament sits for the first time in the second week of November, aim to end the scheme from mid-2014.
“The people of Australia understandably want lower costs of living and they want more secure jobs. This bill gives them both,” Mr Abbott told reporters in Canberra on Tuesday.
When the laws are passed, the coalition forecasts households to be around $550 a year better off as power prices fall by nine per cent and gas prices by seven per cent.
The Australian Competition and Consumer Commission will be given tougher powers to oversee prices and ensure companies pass the benefit of scrapping the tax on to consumers.
The government confirmed it would not go ahead with annual tax breaks worth at least $380 a year for persons earning up to $80,000 per annum from mid-2015.
But it will continue to pay out other compensation, including family payments, pensions and allowances linked to the tax.
Until the repeal laws go through parliament, the 371 companies directly affected by the tax must maintain compliance for this 2013/14 financial year.
While the coalition has a comfortable majority in the lower house to pass the legislation, Labor and the Australian Greens could combine to oppose it in the Senate and thwart Mr Abbott’s plans.
The prime minister continued to pressure Labor, saying new opposition leader Bill Shorten must not deny “the mandate of the Australian people”.
“We are giving the Labor party the chance to repent of its support for the carbon tax,” he said.
If the legislation isn’t passed before July 1 next year, the government won’t extend the carbon tax into the new financial year.
This can be done through an administrative order not to collect the tax, or by refunding the tax to businesses, experts say.
It would allow Mr Abbott to secure the support of anti-tax crossbenchers in the new Senate, when the upper house changes over in July 1 next year.
Opposition climate spokesman Mark Butler said Labor remained committed to its pre-election promise to move from a fixed carbon price to a floating price emissions trading scheme (ETS).
“The coalition instead will throw the baby out with the bathwater, and leave Australia with no credible policy on climate change,” he said.
Greens Deputy Leader Adam Bandt described Mr Abbott as a “climate-change criminal”.
Climate Institute chief executive John Connor said the government must show how it can meet a target to cut emissions by five per cent by 2020 without an ETS.
Environment Minister Greg Hunt said the coalition’s Direct Action plan would achieve a five per cent cut in emissions by 2020, with separate consultation on the design of the plan expected in the future.