Credits Trader: Many Would Back Repealing Carbon Price

Half the country supports Opposition Leader Tony Abbott's stance that he would overturn the carbon pricing scheme should the coalition with the next election, a news survey shows.

The weekly online Essential Research survey released on Monday shows the prospect of a coalition election win remains clear cut, with only a minor increase in support for Labor recorded in the latest week.

Credits Trader: Many Would Back Repealing Carbon Price

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.

Costs of Climate Tax 'Could Drive Farmers From the Land'

Carbon tax costs could push farmers off the land and raise the price of agricultural productivity, a Senate committee has been told.

Sitting in Brisbane, the Senate select committee on the scrutiny of new taxes heard that the Queensland government would forgo $1 billion in royalties in the coming decade because of the tax.

Queensland Farmers Federation chief executive Dan Galligan said the extra costs would put more pressure on farm profits, and called for industry-specific economic modelling.

"The analysis is too broad to give us a clear understanding of how many farmers this will affect to a point where they may well leave the industry," he said. "That may well happen for many farmers -- that loss in profit margins, associated with a number of other issues, will be enough reason for them to leave the farm."

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Under questioning from Labor senators, Mr Galligan acknowledged the government exemptions on agriculture emissions and fuel were helpful. He said the Coalition's direct-action plan to pay $10 a tonne of soil carbon abatement would be insufficient.

But he said the Gillard government's carbon reduction scheme could have the "perverse effect" of stalling farm productivity because improvements relied on power use, which would be more expensive under the carbon tax.

"The mitigation options under the carbon farming initiatives may in fact further constrain a farmer's ability to increase productivity, which would be their usual mechanism to fight against a reduction in margins," he said.

Also appearing before the Coalition-dominated committee, Queensland Resources Council chief executive Michael Roche said taxpayers could be forced to compensate the $1.7 billion asset writedown in state-owned coal-fired power generators.

He queried why the Bligh government had not highlighted an estimated $1bn in lost coal royalties between 2012 and 2021. "I would have thought the Queensland government would see the risk for their single largest source of revenue outside of grants from the federal government," he said.

But Queensland Premier Anna Bligh said the coal industry had a "very strong future", with almost $60bn worth of mining applications in the pipeline.

Next week, the committee will visit the northern NSW town of Tamworth, in Tony Windsor's federal electorate, before moving to the Queensland coalmining centre of Bowen.

Credits Trader: Emotional PM Defends Carbon Tax Plan

The Prime Minister Julia Gillard became emotional today during an address to the National Press Club, on the Government's carbon tax plan. Ms Gillard's voice wavered as she talked about her nature of being a shy, reserved school girl. But she was unwavering in her answer to what she thought of the reporting of her Government's carbon pricing plan

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Credits Trader: Emotional PM Defends Carbon Tax Plan

Credits Trader: Emotional PM Defends Carbon Tax Plan

The Prime Minister Julia Gillard became emotional today during an address to the National Press Club, on the Government's carbon tax plan. Ms Gillard's voice wavered as she talked about her nature of being a shy, reserved school girl. But she was unwavering in her answer to what she thought of the reporting of her Government's carbon pricing plan

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Credits Trader: Emotional PM Defends Carbon Tax Plan

Carbon trading has its risks including fraud, warn experts

CARBON trading experts say there is potential for fraud in the global market, but checks and balances are improving.

Under the government's carbon pricing plan announced on Sunday, more than half of the emissions abatement to 2020 will come from companies buying it from overseas, at an estimated cost of $3 billion, with the remainder coming from Australian carbon farming and other initiatives.

A new body called the Clean Energy Regulator (CER) will determine companies' carbon price liabilities and operate the national register of emissions units, and work alongside the Climate Change Authority headed by former Reserve Bank chief Bernie Fraser.

Already more than 30 Australian-based brokers and companies, such as the Commonwealth Bank and Origin Energy Electricity, are registered with the CER.

But the fledgling global carbon trade has seen its share of fraud and corruption, with such problems as companies buying into non-existent forests or renewable energy projects that don't get off the ground.

The Australian Federal Police also will have a role in investigating allegations of fraud or corruption.

GreenCollar Group chief James Schultz, who advises companies on carbon trading, told AAP much had been learned in the past decade.

"Rigour is important," he said.

"One of the lessons is the need for the market to understand what they are buying.

"It takes a while to be sophisticated about what is a shonky product - like a tree plantation that doesn't exist - versus something that has been rigorously audited."

While the details of the Australian system were yet to be fully spelled out, he expected it would be consistent with "international norms".

"Audit is an essential part of the process. You need a national standard, which at the moment is the Kyoto protocol," Schultz says.

"The carbon farming initiative is another standard.

"Auditors say: 'Have you adhered to the standard, have you told us the truth?' And if all those things stack up then you now have a climate change benefit."

Nationals senator Barnaby Joyce, who opposes the system, says despite $382 million being spent on a new climate change bureaucracy there were bound to be rorts as $3 billion went overseas on abatement.

"(It's) like those dodgy emails you get from the West African coast, only your government will actually start replying to them with your nation's bank account details," he said.

Taxpayers' money would be "cast like confetti around the world".

But Treasurer Wayne Swan says Australian governance arrangements will be effective.

"We're setting up a whole series of arrangements in our Climate Change Authority to make sure that governance is first class and world class," he said.

Opposition Leader Tony Abbott earlier this month told an industry forum that a "dependable carbon cop" would be needed if the scheme was to have any credibility.

The Australian Federal Police has been examining the issue since an ETS was first raised as a serious proposal four years ago.

Former AFP chief Mick Keelty told a forum at that time that any carbon trading scheme had the potential to be undermined by "corruption or fraud".

In April 2010, AFP deputy commissioner for national security, Peter Drennan, said carbon trading "may in time provide opportunities for organised criminal syndicates to exploit new markets and engage in fraudulent activity".

An AFP spokesman told AAP this week the final design of the scheme's governance was still being developed by the climate change department.

"The AFP has commonwealth responsibilities in relation to the investigation of serious fraud in government programs and in addressing organised crime," the spokesman said.

"It is too early to speculate on any potential criminal risks or the size and impact of any obligations for the AFP.

"However, the AFP will work closely with the relevant agencies ... to address identified risks, enhance the scheme's overall integrity, and manage any law enforcement resourcing impacts."

GreenCollar chief Schultz said carbon trading was becoming like buying any other commodity, but some companies will find that investing in Australian-based abatement projects, such as forests and farms that cut their use of fertilisers, is better than looking overseas.

"Some product is cheaper than others and some has a higher or lower risk profile than others," he said.

"There is significant upside for companies that are able to invest directly into the primary market - companies that create credit, create the project itself as opposed to buying on the secondary market, which is cheaper but has a higher risk."

Schultz said the public could trust the auditing system as "these are the same people who tell you ships won't sink and planes won't fall out of the sky".

"The same level of audit is brought to this, and in fact it is more rigorous," he said.

The public concern was driven largely because in many cases "you are trading something that didn't happen", Schultz says.

"Most of what you are trading is an avoided emission. You are trading something that didn't happen, like stopping deforestation. It's not planting trees but has a great impact," he said.

"By not chopping down a forest that is however many millions of tonnes of CO2 that goes into the atmosphere and that compensates another activity."

Suffocating the Economy One Tax at a Time

If implemented, Julia Gillard's proposed carbon price starting at $23 per tonne will push us closer to economic stagnation.

If the Government wanted to make the 159 million tonnes saving in 2020 it seeks, it would not attempt to do this with a domestic tax. According to the Government's Securing a Clean Future report, half of the saved emissions are domestically derived.

If the price is $30 per tonne this will involve an annual cost of $2.385 billion incurred in overseas buying. The cost of achieving the emission reduction locally if the price is $30 per tonne is incurred on all the remaining emissions (336 million tonnes). That comes to $10.08 billion. This begs the question that since carbon dioxide is the same the world over why not buy all our emissions overseas? At $30 per tonne, 159 megatonnes of emissions costs $4.77 billion, which is far less costly than striving to do it with the mix of local ($10.08 billion) plus overseas ($2.385 billion) giving a total of $12.465 billion.

Even without a carbon tax, Australia's energy price regulator has reported an expected increase of 30 per cent in electricity prices over the next three years, largely due to higher 'poles and wires' costs. For New South Wales, the state's pricing tribunal has announced a 17 per cent electricity increase for next year, a third of which is for "green schemes".

Against this backdrop last month's Productivity Commission (PC) report, Carbon Emission Policies in Key Economies examined over 1,000 abatement reduction schemes across eight countries. These are overwhelmingly focused on electricity, and the PC converted them into carbon tax equivalents.

The PC's analysis illustrates that taxes are high and substantial abatement is taking place in the European Union (EU). In Germany and the UK carbon dioxide emission programs bring increases of 12-17 per cent in electricity prices (though the recent slump in the EU carbon price will reduce this considerably).

For Australia and New Zealand the emission control programs currently bring electricity price increases of 1-2 per cent, while in China, US, Japan and South Korea the effect is negligible. And Australia's main scheme, the 20 per cent Renewable Energy Target, is only just gearing up to cost levels that by 2020 will be perhaps tenfold those of today.

Australia's trading rivals are among the 170-odd other countries which the PC did not examine. In fact, exporters of fuel and raw materials in Canada, South Africa, Brazil, Indonesia, India and the Middle East face negligible carbon abatement costs and already have tax advantages over Australia's exporters. Carbon taxes figured prominently in the Canadian Liberal Party's platform in that country's recent election and the party suffered its worst defeat in a century.

Although no country has a carbon tax, the PC's material demonstrates that cap-and-trade market mechanisms offer cheaper means of bringing about abatement than specified regulatory measures like renewable programs. Thus Germany's costs under the European Union's cap-and-trade carbon tax were about $20 per tonne of CO2 (for shifting from coal to gas) but costs under specific measures requiring wind and solar use on average $137 per tonne.

Australia's schemes involving feed-in tariffs for small scale renewable systems come at a CO2 price of up to $425 per tonne. Wind farms cost $37-69 per tonne.

The PC estimates that a carbon tax set at $9 per tonne could replace all existing Australian measures and notes that a tax is less inefficient than 'direct action' approaches favoured by the Opposition.

However, the current abatement measures requiring renewables are also direct action approaches and the Government wants these to be retained alongside a carbon tax. Moreover, it is negotiating for another direct action proposal, involving closure of Victoria's Hazelwood power station. That closure could reduce emissions by 3 per cent but only in the unlikely event that the station's output is not replaced by output from other fossil fuel sources.

The Productivity Commission estimated the cost of Australian emission reduction programs at $473-694 million in terms of total subsidy equivalent. But this excludes direct government subsidies. The Department of Climate Change and Energy Efficiency (DCCEE) provides an "A to Z" of (Commonwealth) Government initiatives. Ranging from Advanced Electricity Storage Technologies to the World Bank Clean Technology Fund, these comprise 93 separate programs. DCCEE put Australia's budget expenditures on abatement measures totalled $1.069 billion in 2009/10. The Government's package budgets for $4.2 billion in 2014/15 in the Clean Energy Finance Corporation and other supports for green energy and conservation.

In addition to excluding direct budgetary spending in estimating Australia's carbon tax rate, the PC also does not count the effects of a range of standards. A previous commission report had put the annual costs of greenhouse abatement measures embodied in the national five/six-star building standards at $3 billion a year.

Clearly Australia outlays much more than the $473-694 million the PC used to estimate Australia's greenhouse abatement costs. Our expenditures are much higher than those of our competitors and the carbon tax would further increase the baggage we have to carry.

The outcome would be a spiralling down of our living standards relative to those of other resource rich countries.

But the carbon tax is only the latest blow. To restore the nation's competitiveness, a future Coalition government must both revoke any carbon tax that is introduced and purge the economy-killing measures that have been gathering moss over the past few years.

To start this ball rolling, the O'Farrell Government is calling for the repeal of the Commonwealth's 20 per cent Renewable Energy Target. And the Nationals Senator Ron Boswell has made similar moves in the Coalition party room by seeking to have support for the target reviewed by a policy committee.

With his 'direct action' approach Tony Abbott expects to achieve the Government 5 per cent reduction in emissions but at a lower cost than a carbon tax involves. That is implausibly optimistic. But more significantly he has announced a review of policies for 2015, an action which foreshadows an unwinding of the green juggernaut.

Alan Moran is the Director, Deregulation at the Institute of Public Affairs.

Carbon tax: Heat rises as voters reject Julia Gillard's plan

ANGRY Australians have vowed to vote Julia Gillard from office at the next election after yesterday's controversial carbon tax announcement.

Scores of voters rejected the plan soon after details of the $24.5 billion package to tackle climate change were revealed, with more than 80 per cent who voted in a national News Limited online poll saying Australia shouldn't have a carbon tax.

Almost 100,000 people voted across four polls in the national plebiscite by 5pm yesterday, with 87.1 per cent saying they planned to change their vote at the next election in light of the tax.

More than 70 per cent of voters, or 15,866 people, said they now planned to vote for the Coalition at the next election while just 8.51 per cent said they would support a Labor government.

Just 13 per cent of voters said they wouldn't change their vote at the next election.

Despite government claims that 90 per cent of Australians would receive compensation, and that 40 per cent of households would be overcompensated, voters said Julia Gillard had signer her fate at the polls.

"They're calling it 'Carbon Sunday' but I like to refer to today as 'Suicide Sunday' for a PM and three independents,'' one reader wrote.

"I cannot wait until the next election. The Labor Party the Greens and the Independants will answer to the Australian people for what they are inflicting upon us. Revenge is a dish best served cold,'' wrote another.

Eighty per cent of voters described the tax as "disgraceful'' while others said it was "inadequate''.

Just eight per cent of voters said they were confident it wouldn't affect their hip pocket.

An anti-carbon tax group said its website crashed after being overwhelmed with people trying to sign up to a campaign rejecting the tax.

The organisers of the site, no-carbon-tax.org, said the site crashed because of the "sheer numbers of people signing up.''

Credits Trader: Alan Jones speaks to Lord Christopher Monckton about carbon tax and climate change.

Credits Trader: Alan Jones speaks to Lord Christopher Monckton about carbon tax and climate change.

Credits Trader: Lord Christopher Monckton interview with Adam Spencer

Credits Trader: Lord Christopher Monckton interview with Adam Spencer

Jobs at Risk From Carbon Tax: CSR Chief

The chief executive of CSR, one of the country’s largest building materials companies, has hit out at the federal government’s proposed carbon tax, saying it will not reduce world carbon emissions and would ultimately drive Australian manufacturing jobs offshore.

With the government set to announce details of the tax this weekend, Rob Sindel used his address to shareholders at CSR’s annual meeting in Melbourne to add to the chorus of business leaders in heavy industries critical of the tax.

He said trade-exposed industries must be given adequate assistance or a mass exodus of manufacturing jobs would result.

‘‘Our message to government is clear,’’ Mr Sindel said.

‘‘All trade-exposed industries must receive full transitional assistance until the rest of the world imposes a similar carbon cost.’’

Shares in carbon-intensive steel producers like BlueScope and OneSteel have rallied sharply in the past week over growing speculation they and other heavy polluters will be almost fully shielded from the carbon tax in the first few years through transitional assistance.

Mr Sindel said CSR’s glass and aluminium businesses was also likely to receive the highest level of transitional assistance but said the rate at which the assistance would be phased out was a critical factor.

‘‘The decay rate is the real sleeper in this,’’ he said.

If the assistance was phased out too quickly, Mr Sindel said 1 million manufacturing jobs, including 4000 from CSR, would be at risk.

‘‘We will fight to protect Australian industry and these jobs,’’ he said.

The country’s largest brickmaker, Brickworks has also made its stance clear against the tax, saying it will increase the cost of housing and spark an exodus of manufacturing jobs and foreign investment.

Mr Sindel said if the government was serious about carbon reduction, it would do more to increase energy efficiency in the building environment. Mr Sindel said buildings accounted for 30 per cent of the country’s energy consumption, of which 40 per cent was wasted.

The Gillard government's carbon tax is expected to start at $23 a tonne and be paid by 500 companies rather than almost 1000 liable under earlier estimates after it decided to remove fuel from the pricing scheme.

pwen@fairfaxmedia.com.au

Carbon Trading Scheme: Andrew Wilkie Says Julia Gillard Must Improve Carbon Tax Sales Job to Regain Public Confidence

TASMANIAN independent Andrew Wilkie has told Julia Gillard to improve her carbon tax sales job amid plummeting public support for the measure.

As fellow crossbencher Rob Oakeshott played down the latest Newspoll - showing only 30 per cent support for the tax - Mr Wilkie said the government had to do something to restore public confidence in the measure.

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Carbon Trading Scheme: Andrew Wilkie Says Julia Gillard Must Improve Carbon Tax Sales Job to Regain Public Confidence

Andrew Wilkie Says Julia Gillard Must Improve Carbon Tax Sales Job to Regain Public Confidence

TASMANIAN independent Andrew Wilkie has told Julia Gillard to improve her carbon tax sales job amid plummeting public support for the measure.

As fellow crossbencher Rob Oakeshott played down the latest Newspoll - showing only 30 per cent support for the tax - Mr Wilkie said the government had to do something to restore public confidence in the measure.

“Clearly the government does need to do a better job at selling a price on carbon if it is to regain the broad-based support it enjoyed last year,” he told The Australian Online.

Today's Newspoll survey reveals 78 per cent of Australians believe in climate change but 60 per cent oppose Labor's proposed carbon tax.

Mr Oakeshott urged voters to recognise the “economic opportunity and economic importance” of the carbon tax.

“No-one in this business is trying to do anyone any harm,” he said.

“We are trying to do public good in the long term and sometimes that requires some difficult decisions along the way. Everyone is trying to do a public good here.”

Mr Wilkie also offered conditional support for the tax.

“I continue to support a price on carbon so long as the settings are right,” he told The Australian Online.

“Most relevant to me is that Tasmania's overwhelming reliance on renewable energy, and capacity to lock up carbon through forestry, be properly factored into the settings being developed.”

The government will need the support of both MPs, plus independent Tony Windor and Green Adam Bandt, if its carbon tax is to get through the House of Representatives.

As the government seeks business support for the plan, Nationals Leader Warren Truss today accused it of leaving families and small businesses out in the cold.

Mr Truss said the Prime Minister's dinner invitation to big polluters at Kirribilli House tonight showed she was increasingly out of touch with the needs of everyday Australians.

“While Julia Gillard cosies up to the big end of town tonight, wining and dining big business to woo carbon tax support, small business and families are on the outside looking in,” he said.

“Ordinary Australians are already struggling with rising household costs and now they face the prospect of a double whammy from the carbon tax and looming interest rate rises.”

Responding to a Newspoll survey in The Australian yesterday, which showed Labor's primary vote at 33 per cent and her own satisfaction rating at a new low of 38 per cent, Ms Gillard conceded she had “a lot of hard work to do as Prime Minister”.

Opposition Leader Tony Abbott, whose satisfaction rose six percentage points to 42 per cent in the past month, said the poll was “field evidence” of people's carbon tax concerns.

“I think it's the good sense, the common sense, of the worker which is coming to the fore here,” Mr Abbott said.

The Prime Minister seized on Newspoll's finding that 78 per cent of respondents believed climate change was real.

“What today's poll shows - and I don't normally comment on polls - but I'll say this if you look at today's poll it shows clearly that Australians believe climate change is real,” Ms Gillard said in Sydney.

“That's a pretty big contrast with Mr Abbott, who has said in the past it is absolute crap.”

She said she understood major reform made people anxious, but the public would soon have better information upon which to judge the plan.

“In the middle of this year we will be able to give everyone full details of how the carbon pricing system will work,” she said.

“They will be able to sit at their kitchen table and work out all of the dollars and cents for them.”

Treasury spokesman Joe Hockey said plummeting support for the carbon tax was “Labor's own handiwork”.

“The Australian people are smart,” he said.

“They look at a carbon tax and they say, yes, that means higher costs for me and everyday life. And the Australian people can see through the Labor Party. This is all of the Labor Party's making.”

theAustralian.com.au

Credits Trader: .Controversial climate sceptic Lord Monckton Set to Speak at National Press Club

CLIMATE sceptic Christopher Monckton has been offered a prime speaking slot at the National Press Club in Canberra on July 19, despite a spate of cancelled public appearances.

Lord Monckton - who recently accused Julia Gillard's climate adviser Ross Garnaut of “fascist” views - is set to debate the Australia's Institute's executive director, economist Richard Denniss.

Credits Trader: .Controversial climate sceptic Lord Monckton Set to Speak at National Press Club

Carbon Trading Scheme: Taxpayers Fund Focus Group Testing of Gillard Government's Carbon Price Campaign

TAXPAYERS are paying nearly $1 million for focus group testing of the Gillard government's carbon tax sales pitch.

The Australian Online has learned a major contract has been awarded to a Melbourne-based market research company to test the resonance of a planned “Clean Energy Future Campaign”.

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Carbon Trading Scheme: Taxpayers Fund Focus Group Testing of Gillard Government's Carbon Price Campaign

Andrew Wilkie Sets out Conditions to Support Carbon Tax

JULIA Gillard can secure the final vote she needs to pass the carbon tax if she promises to protect a zinc mine in Hobart.

Tasmanian MP Andrew Wilkie last night met the Prime Minister to discuss his terms after she won support from the Greens and independents Rob Oakeshott and Tony Windsor for the package.

Mr Wilkie also wants to make Tasmania a renewable energy hub and guarantee compensation for low-income earners.

Should there be an election over carbon tax? Tell us below

Ms Gillard last night called premiers to postpone a planned meeting next week on health reform. It will allow her to go on a national tour to sell the carbon tax.

Government MPs and staff yesterday were briefed to be on a "war footing" for a major campaign after the package was unveiled on Sunday. The PM will make a televised address to the nation on Sunday night.

Ms Gillard said she would spend next week directly answering questions from the public.

"I will be wearing out my shoe leather, literally," she told Parliament.

Victorian Liberal Kelly O'Dwyer, from Higgins, challenged the PM to attend a town hall meeting in her electorate.http://www.blogger.com/img/blank.gif

Opposition Leader Tony Abbott said the PM was "running away from scrutiny" by refusing to announce it before Parliament began a five-week recess tomorrow.

He wrote to Ms Gillard and urged her to recall Parliament next week.

Liberal climate spokesman Greg Hunt said: "When it comes to cost of living, this will be Sunday bloody Sunday."

Source

Taxpayers Fund Focus Group Testing of Gillard Government's Carbon Price Campaign

TAXPAYERS are paying nearly $1 million for focus group testing of the Gillard government's carbon tax sales pitch.

The Australian Online has learned a major contract has been awarded to a Melbourne-based market research company to test the resonance of a planned “Clean Energy Future Campaign”.

A second contract has been awarded to an internet design company to develop a “Clean Energy Future Website”.

The contracts, worth $927,000 and $18,000, are expected to form part of a $12 million public information campaign.

Julia Gillard has admitted she faces an uphill battle to sell her carbon tax after she unveils details of the plan on Sunday.

The language of the contracts points to the likely theme of the government's campaign - a simple focus on a clean, green future with as little confusing detail as possible.

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Carbon Price Announcement on Sunday

AUSTRALIANS will learn how the proposed carbon tax will hit their back pockets when the federal government unveils its policy on pricing pollution on Sunday.

The announcement comes 136 days after Labor, the Australian Greens and two independent MPs first formed the Multi-Party Climate Change Committee (MPCCC) to investigate carbon pricing.

"This weekend the Gillard Government plans to announce a price on pollution as the central element of a comprehensive policy to tackle climate change, cut pollution and drive the transformation of the Australian economy to a clean energy future," Prime Minister Julia Gillard said in a statement on Monday.

"After hearing a report on the discussions of the Multi-Party Climate Change Committee, Cabinet agreed tonight that sufficient progress had been made to allow an announcement date to be set for Sunday 10 July 2011."

Ms Gillard said talks between MPCCC members during recent weeks had been fruitful.

The committee comprises Ms Gillard, Treasurer Wayne Swan, Climate Change Minister Greg Combet, Greens senators Bob Brown and Christine Milne, and independents Tony Windsor and Rob Oakeshott.

"While there will be additional discussions with the MPCCC this week, followed by further Cabinet consideration, it is expected that the remaining details will be finalised in these discussions ahead of Sunday's announcement," Ms Gillard said.

The scheme will start with a fixed price on carbon emissions on July 1, 2012, followed by an emissions trading scheme with a flexible price and an emissions target starting three years later.

The news comes after Ms Gillard revealed on Sunday that the carbon tax would not be placed on fuel for cars and light industrial vehicles.

The prime minister said Mr Windsor had been influential in that development, which blunts Opposition Leader Tony Abbott's argument that a carbon tax would increase petrol prices for motorists.

But Mr Abbott and other coalition MPs questioned the government in parliament on whether trucks, buses and boats would be exempt from the carbon tax, and how long the exemption would exist.

The impending announcement of the carbon policy was a great relief, Ms Milne said.

"Now at least we are in a position to be able to go out there and deliver on what we said we'd deliver at the time we signed the agreement with the Prime Minister Julia Gillard, saying we would have a multi-party climate committee, that it would deliver a carbon price mechanism and that the emissions trading scheme would begin on July 1, 2012," Ms Milne said.

But the Greens senator would not reveal any details about the carbon price.

Ms Gillard said last week nine out of 10 households would receive tax cuts or rises in benefits, and the three million lowest paid households would be over-compensated for increases in their cost of living due to the carbon tax.

Opposition Environment spokesman Greg Hunt said the government's announcement of its carbon price policy at the start of the five week winter break from parliament was a "cynical move".

"It is deliberately running away from the parliament and it is deliberately running away from scrutiny," he told AAP.

Mr Hunt said the government would not give the full impact on the costs of living up to 2020 on Sunday.

"The only thing that matters is the full impact on electricity prices, gas prices, on grocery prices, on general cost of living between now and 2020 because each year, every year the carbon tax is going to go up and up and up."

Commenting before Ms Gillard's announcement, Mr Abbott said a coalition government would finance its $10.5 billion carbon emission reduction scheme from Budget savings and not from an imposed tax.

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