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tony abbott

Scrapping Carbon Tax Top Priority, Says Australia’s New Prime Minister

tony abbottVoters have elected Tony Abbott as Australia’s 28th prime minister in an election largely won on the Liberal National Coalition member’s pledge not to recognize the Labor Party’s 2007 mandate to implement an emissions trading scheme.

Abbott, who defeated Labor Party’s Kevin Rudd in the election, has demanded the upper house recognize his electoral mandate to immediately repeal the carbon tax.

The carbon tax, which took effect July 1, 2012 and requires about 300 companies to pay A$23 ($21.16) per metric ton of carbon emissions, has impacted businesses in Australia.

Airliner Virgin Australia indicated in its updated financial guidance for the year that ended June 30, 2013 that the carbon tax, among other things, was having a negative impact on the company’s performance. The company said the pre-tax costs of the carbon tax for the 2013 fiscal year were between $40 million and $45 million, and the costs were unable to be recovered due to a weak economic climate.

Abbott spent four years as opposition leader, a time marked by his campaign against Labor’s carbon pricing scheme, The Guardian reports. On his first day as prime minister-elect, Abbott restated his promise to scrap the unpopular tax on carbon emissions. In a statement issued Sunday, Abbott said “a very early item of business is scrapping the carbon tax,” the Wall Street Journal reports.

Former prime minister Rudd announced in July a plan to replace the country’s carbon tax with a market-based trading system one year ahead of schedule. The change is expected to sharply cut the July 2014 cost of carbon, from a projected $23.30 per metric ton to about $5.50, costing the government about $3.5 billion in tax revenue over the next financial year.

Photo Credit: Wikicommons

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