ETS to slow wages growth: Treasury

ABC News Online, Posted Thu Apr 30

• http://www.abc.net.au/news/stories/2009/04/30/2556889.htm
• Audio: Carbon cuts brawl (AM)
• Related Story: ETS a 'black hole of uncertainty'

The Federal Treasury says wages growth will be slightly slower under the Government's proposed emissions trading scheme (ETS).

A Senate inquiry in Canberra is taking evidence on climate change policy and the Government's plans for carbon pollution reduction.

Meghan Quinn from the Treasury's Climate Change Modelling Unit says the impact on wages growth is forecast to be up to 2 per cent slower than current levels.

But she says a much smaller impact is anticipated, because wages overall are expected to be higher as the economy grows.

"Just looking at mitigation costs alone, the introduction of an emissions price in Australia will ultimately reduce Australia's GDP slightly and would reduce real wages as a consequence," she said.

Meanwhile, the Federal Opposition is calling on the Government to make changes to its emissions trading scheme.

The Government wants the bill passed by the end of June, but faces a battle in the Senate.

The Coalition's emissions trading spokesman, Andrew Robb, has released a report today from an independent economist.

"His report establishes very clearly that the Government has got serious work to do to fix this deeply flawed scheme that they've put in place," he said.

"No one is saying it's all or nothing; what we're saying is go round back and do the work, fix up the flaws, do not put in jeopardy tens of thousands of Australian jobs."

But Climate Change Minister Penny Wong says the Opposition has not finalised its own position yet.

She says the Government made an election promise to introduce the scheme and she is determined to see it passed by Parliament.

Senator Wong says business and industry want to know what form the scheme will take.

"Business wants certainty; they want certainty on climate change policy. Unfortunately the only thing we're all certain of is that [Opposition Leader] Malcolm Turnbull is not up to this challenge," she said.

"You've had not only the 10 years in government but many months since the election of the Rudd Government to come up with a policy."

Greens on the offensive

Meanwhile, the Greens say they suspect the Government and the Opposition are being pressured by the coal industry to agree on an emissions trading scheme.

Greens Senator Christine Milne says the Government's plan is too weak and will make it harder to transform the economy away from coal.

The Government has taken a tougher line against the Greens in recent days, saying that their call for a stronger target is economically irresponsible.

Senator Milne says that is a sign the Government and Opposition will do a deal.

"It is very clear that the big parties and the big polluters are lining up against the climate and the community," she said.

"We are now seeing the shift that the Greens have been expecting for some time, and that is the coal industry starting to put pressure on the Coalition and the Government to get together, because they will never have a better deal than they have got now with the Government's proposed scheme."