Carbon price to exclude petrol, retirees to get cash compensation

Archived News, Posted on 04 Jul 2011

Carbon price to exclude petrol, retirees to get cash compensation

AAP

Prime minister Julia Gillard has confirmed her carbon tax won't apply to petrol, thanks to the intervention of independent MP Tony Windsor.

"Petrol prices will not be touched by carbon pricing," she told ABC Television today.

"Families, tradies, small business people do not have to worry about a petrol price increase."

The confirmation is the latest in a series of announcements by the government as it teases out details of a mechanism to price carbon, still subject to talks with the Australian Greens and independent MPs.

The prime minister acknowledged that one of those independents, Tony Windsor, played a major role in the decision to exempt petrol.

"He has put forward a powerful case for people in country Australia who have got no choice but to jump in their cars to get places."

Ms Gillard said the exemption would not be a temporary measure.

"Petrol will be out now and out for the future."

A $25 a tonne carbon tax would have added about six cents a litre to the cost of petrol.

Ms Gillard said the exemption also was good news for people living in the outer-urban areas of capital cities, like her own seat of Lalor in Melbourne, who relied on a car for transport.

It is unclear whether the Greens are happy with the decision, having consistently argued against petrol's exemption from a carbon tax.

Ms Gillard would not say whether the minor party had backed down over the issue.

"There's still some discussions and conversations to come," she said.

The prime minister also confirmed that self-funded retirees holding a commonwealth health care card will get the same assistance as pensioners, under a compensation package aimed at limiting the impact of a carbon tax on households.

The assistance will be delivered quarterly, but a start date for the first payment and tax cuts for other Australians is not yet clear.

"You'll see all of these details after a carbon price is finalised," Ms Gillard said.

The multi-party climate change committee was still working to get every detail right, Ms Gillard said.

But the prime minister is still refusing to reveal a timetable for an announcement about a carbon pricing mechanism, despite the government's own self-imposed deadline of early July.

"I'm not here to confirm the date, we're working hard to finalise the scheme."

The decision to exempt petrol removes a key plank from opposition leader Tony Abbott's campaign against a carbon tax.

"He's being trying to persuade Australians that petrol prices will go up, that's not true," Ms Gillard said.

As well, Mr Abbott had been claiming a carbon tax would be permanent and that a compensation package would not provide adequate assistance for households.

"And he's been trying to say to Australians, somehow he's got a magic pudding and everything he does comes for free.

"Well it doesn't, it comes at a cost of $720 a year."

Ms Gillard was referring to the coalition's direct action package that it says will match Labor's carbon reduction target by 2020.