Carbon tax is enough to leave you speechless

June 6th, 20125:10 am @


Nobody thinks the carbon tax is a piece of reform. For generations, the phrase “tax reform” has meant an effort to simplify tax, make it more efficient and minimise imped-iments to economic growth.

The GST was a tax reform because it replaced nine other taxes that were abolished, reduced the weight on income taxes and allowed Australia to help its exporters. The carbon tax replaces nothing, applies to a narrow and inefficient base and will detract from growth.

Nobody puts forward the carbon tax as an economic measure. The case for it is purely environmental – it is designed to arrest the increasing concentration of carbon dioxide in the atmosphere and thereby arrest climate change. Rudd called climate change the “great moral challenge of our generation”.

No one has suggested a carbon tax would be good for jobs or the economy, or a method by which to increase family tax benefits and pensions. We were told we had to do this because, if we didn’t, the planet would heat up, the seas would rise, the polar caps would melt and the polar bear would be threatened with extinction.

As we come up to the date for the start of the carbon tax, all the government wants to talk about are benefits and payments. But this tax is not being imposed to fund benefits and payments. It is being done to save the planet. Why won’t the government tell us that the pain is worth it? Why can’t it mention the word “tax” and tell us how much our pain will contribute to global survival? Surely the justification to burden industry and households is that we must rise to this great moral challenge?

It looks to me that the overblown claims of the climate change lobby have been exposed – from the melting glaciers of the Himalayas to the prolonged droughts where the dams would never fill again, the government has lost the faith – bit by bit. They no longer spruik the threat of imminent damnation. Yet they still recommend the same way to salvation.

We keep hearing that Australians will cope with the carbon tax just as they coped with the GST. But there is a big difference. One had an economic purpose. The other does not. This carbon tax is not just the tax that will not speak its name. Now it is the tax that will not speak its purpose.

Peter Costello was federal treasurer from 1997 to 2007.

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