Rudd says trading scheme will raise living costs

ABC News Online, Posted 35 minutes ago

• http://www.abc.net.au/news/stories/2008/07/06/2295705.htm
• Video: Emissions trading scheme to reap $4billion (ABC News)
• Video: Barrie Cassidy speaks to Kevin Rudd (Insiders)

Prime Minister Kevin Rudd says the Federal Government acknowledges its emissions trading scheme will put more pressure on the cost of living.

The Government wants to introduce an emissions trading scheme in 2010, and will release a discussion paper on possible models later this month.

"Any adjustment at a time when households across Australia are under real financial pressure with rising mortgages, rising rents, the impact on petrol and the impact on food, I think any adjustment costs will be difficult," Mr Rudd told ABC1's Insiders program.

"That's why we've got to be very mindful about how we provide adjustment and support to households during that process."

Climate economist Ross Garnaut, who released a draft report on Friday and is advising the Government on the emissions trading scheme, says the Government could reap at least $4 billion in revenue from the scheme.

The Government has pledged to use all the money raised from putting a price on carbon to help low-income families and businesses adjust to the savings.

Professor Garnaut has told Channel Nine that complex modelling work is currently being finalised on the price that should be set for carbon emissions.

"Don't take what I'm going to say as an indication of price, because we've got a lot of hard work going on, and we'll be revealing the results of that at the end of August," he said.

"If the carbon price was $10 a tonne, the Government would be getting upwards of $4 billion.

"If it was twice that it would get twice as much, if it was four times that it would get four times as much."

Tough and complex

Federal Climate Change Minister Penny Wong says the Government recognises there is a long way to go before people understand the implications of an emissions trading scheme.

Senator Wong has told Channel Ten that businesses and the community will be thoroughly consulted, before the changes are brought in.

"I recognise, the Government recognises, this is really tough and complex reform, and we do have a long way to go in terms of explaining to the Australian people what it is we're asking them to do," she said.

Job risk

Family First Senator Steve Fielding says the Government must ensure its emissions trading scheme does not force jobs offshore.

Senator Fielding is now one of two independents who hold the balance of power with the Greens in the Senate.

But speaking on Channel Ten, Senator Fielding has not yet committed to supporting the Government's timetable.

"Time is running out, but at the same token let's not rush it through in such a way that we do just push jobs offshore and what happens is greenhouse gases go up because they [other countries] are dirtier than we are to a certain extent," he said.

"So we've got to be very careful that we look at this very, very carefully, and I think before we make any decision on actually what we do, that we all know what we're getting into."