Tuesday, July 26, 2011
Qld Taxpayers Warned about Carbon Tax
Queensland taxpayers will pay the price for state-owned power generators being devalued by the federal carbon tax, a Senate committee has been warned.
A committee scrutinising the proposed federal tax sat in Brisbane on Monday, where Queensland Resources Council chief Michael Roche argued Australia should not adopt a tax ahead of its international competitors.
The Bligh government has estimated the asset value of state-owned generators will decrease by around $1.7 billion.
Mr Roche said Queenslanders would likely have to prop up the generators after write-downs, although Premier Anna Bligh later told reporters that was a "furphy".
"In the case of government-owned generators, there's only one source of equity and it's the Queensland Treasury, it's the Queensland taxpayer," Mr Roche told the committee.
"Or other programs will be cut to fund the injection into the government-owned generators."
Mr Roche said the carbon tax was expected to comprise up to half of the operating costs of the state-owned generators.
But Labor senator Doug Cameron attacked the ACIL Tasman modelling Mr Roche quoted, saying it had proven unreliable.
The other potential impact on taxpayers was a predicted $1 billion loss in coal royalties to the Queensland government by 2020 due to the premature closure of mines, Mr Roche said.
"I would have thought that the Queensland government would see the risk for their single largest source of revenues outside of grants from the federal government," he said.
But Ms Bligh told reporters the industry had a "very strong future", with almost $60 billion worth of mining applications in the pipeline.
She said federal treasury modelling showed an expected 47 per cent growth by 2020 would only drop to a 45 per cent growth at worst.
"Let's be realistic here, the Queensland coal industry has taken some 40 years to get to where they are now and they expect to increase by almost 50 per cent in the next eight years," she said.
"I think the bigger question frankly is whether the industry itself, with or without changes in federal government regulations, is capable of that sort of expansion."
The committee heard Queensland Chamber of Commerce polling shows the tax will make 10 per cent of the state's small to medium-sized businesses unviable by raising power, transport and supply costs.
"Anybody with a power point, with an engine, with a gantry crane, a mig welder, will pay more for what they do," the chamber's David Goodwin said.
"Right across our economy we feel very, very exposed.
"We're not an economy which sits with a lot of head offices, sitting in buildings, working on computers.
"We are an economy which actually does stuff, and because of that we will be in the eye of the storm."
Senator Cameron ridiculed the chamber for relying on its own surveys rather than Queensland Treasury estimates, which predict strong growth after the recovery from summer's floods and cyclone.
"You're the Tony Abbott of the business community, you're the weathervane, are you?" he said.