Dried river basin sends warning, says PM

Josh Gordon and Melissa Fyfe 

The Age Online, July 6, 2008

• http://www.theage.com.au/environment/dried-river-basin-sends-warning-says-pm-20080705-32a9.html
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THE Government is pressing ahead with efforts to convince a financially stressed public that doing nothing on climate change is not a viable option, as the Opposition demands that motorists and jobs must be put first.

Prime Minister Kevin Rudd yesterday visited the parched Lower Lakes region of the Murray River, warning that failure to act would inflict far greater economic and environmental costs than the introduction of an emissions trading scheme.

After trudging across the dried lake-mud with Environment Minister Penny Wong, Mr Rudd said the situation facing the Murray-Darling Basin illustrated the perils of society burying its head in the sand.

"If you want to see an example of stress from climate change and where it could go over time, look at what's behind us here in terms of the Murray-Darling system," Mr Rudd said. "Therefore, the challenge for us is not to bury our heads in the sand and pretend this problem will just go away."

His comments followed Friday's release of Ross Garnaut's climate change report, which called for a comprehensive emissions trading scheme and warned that climate change could devastate farming in the Murray-Darling Basin and the Barrier Reef.

While Mr Rudd was talking up the challenges, Opposition Leader Brendan Nelson was focusing on public anxiety, accusing the Government of rushing ahead with the scheme at the expense of the economy.

"What's important here is that we do not destroy our economy in order to save our economy," Dr Nelson said. "Mr Rudd needs to explain to Australians whether he's got a new tax which applies to petrol."

Meanwhile, one of the Prime Minister's top social welfare advisers has urged him not to exempt fuel from the new carbon scheme, even though such a move is likely to push up petrol prices.

The Brotherhood of St Laurence's Tony Nicholson, who sits on the Government's social inclusion board, told The Sunday Age that any exemption for petrol would put more pressure on electricity prices.

Mr Nicholson said the new scheme should be as broad as possible so the impact of a carbon price was widely spread. If too many industries were compensated and petrol exempted, households would end up paying more for energy, he said.

"We've thought about it carefully because there are transport issues for low-income households and we certainly do recognise that a lot of people are worried about petrol," he said. But excluding petrol meant shifting the impact on to other goods, so "you'll be paying much more for electricity even if you are paying less for petrol".

The Brotherhood's research shows that if the carbon price was $25 a tonne, $670 could be added to the annual cost of living for Victoria's poorest households. This would potentially push another 206,000 of the state's households below the poverty line. At $50 a tonne, 409,000 households would be pushed into poverty, according to the same research.

In his report, Professor Garnaut suggested that half the money be used to compensate low-income households through tax or social security adjustments, or to make households more energy efficient.

Former state environment minister John Thwaites, who has worked with the Brotherhood on this issue, suggests that Australia should adopt a target of "climate proofing" its 1 million low-income households over the next five years.