Coal industry fears thousands of regional job losses from carbon tax

The Australian reported that mining giant Anglo American, which has led the coal sector's strong opposition to the tax, says a $1.3bn assistance package announced by the government yesterday represented less than 10% of the carbon tax bill the Australian coal industry faced over the next nine years, compared with the 94.5% the government offered other trade-exposed industries.

The carbon price, to be paid by about 500 of the biggest polluters in Australia, will start at $23 a tonne next July, rising by 2.5% a year in each of the first three years before being set by the market. The mining sector will also be the most affected by the off-road diesel fuel rebate being pared back by six cents a litre, which the industry says is a 16% increase in the fuel tax.

But airlines and electricity companies are also hit hard by the new tax. In an attempt to ease industry concerns, the government announced a $9.2bn package to provide assistance to the most emissions-intensive industries and a $300m compensation package for the steel sector.

Anglo American's metallurgical coal business chief executive, Seamus French, said that coal investment projects, which were already being hit by the mineral resources rent tax, received no transitional assistance, whereas other trade-exposed export industries would.

"The tax bill on fugitive emissions alone will account for more than 75% of revenues to be raised from the coal industry, totalling around $13bn over the next nine years," he said, referring to gases such as methane, released from coal seams during mining.

"The coal industry has engaged with the government in good faith, putting forward constructive ideas such as the phasing-in of fugitive emissions, but we have been ignored."

Rio Tinto managing director, Australia, David Peever said it was an unfair tax on Australian exporters.

Australian Coal Association executive director Ralph Hillman said the carbon tax would cost thousands of jobs in regional communities. "Coal earns for Australia $50bn each year and the economic effects of the Gillard government's carbon tax package will be felt across the economy, costing the coal industry alone $18bn."

Employment commentator Matthew Tukaki, CEO of the Sustain Group, said that a price on carbon is "equally as necessary for business certainty as a job is for an individual household".

Tukaki added that as unemployment continues to trend down over the next 12 months, any skilled workers should be able to transition into other sectors or roles where there is still demand for that skill. "It stands to reason that if we do experience challenges in one or other sector that appropriate re-skilling occurs. I would also caution companies in making statements about such matters as it could in fact have an adverse impact on the commercial bottom line especially for publicly listed companies."

Source: Human Capital