Poll Shows Carbon Tax Needs Sale of the Century to Change Voters' Views

THE government's task of selling the carbon price to voters when it begins on July 1 remains difficult, with a poll showing entrenched negative attitudes towards the policy.

The latest Herald/Nielsen poll shows support for a price on carbon at 36 per cent, with 60 per cent opposed.

Just over half of voters - 52 per cent - believe they will be worse off, even though low- and middle-income earners will get $15 billion compensation to cover cost-of-living increases.

Another 39 per cent believe it will make no difference to their cost of living, while 5 per cent feel they will be better off.

The poll of 1400 voters was taken from Thursday night to Saturday night last week, after Labor's crushing defeat in the Queensland election.

The Opposition Leader, Tony Abbott, sought to implicate Julia Gillard's broken promise not to introduce a carbon tax as a factor in that defeat.

The numbers in the latest poll have barely changed in more than a year. Before Ms Gillard announced the carbon policy in February last year, the poll found support for putting a price on carbon evenly split. After the announcement - and opposition claims she had broken her promise - support fell to 35 per cent and opposition rose to 56 per cent. The levels have altered little since.

In July, the government revealed details of the household compensation, which will be worth $15 billion in the first four years. It would be paid as tax cuts and welfare and pension increases. In many cases, those on very low incomes would receive more in compensation than their increase in cost of living as estimated by Treasury.

The Herald poll taken then showed 53 per cent felt they would be worse off, 37 per cent felt there would be no change and 6 per cent felt they would be better off. These numbers are almost identical to the latest poll.

Ms Gillard has rejected calls from business to reduce the impact of the carbon price by cutting the fixed starting price of $23 a tonne roughly in half, to bring it in line with the carbon price in Europe.
Yesterday, she said voter anxiety with her government had been fuelled by the Coalition's ''hyper-partisanship''. She said it had ''force-fed for many months a diet of completely outlandish scare campaigns about what carbon pricing is going to mean''.

She repeated that employment would still grow, the cost-of-living impact would be less than 1 per cent and the compensation would be in place.

Mr Abbott has promised that, if elected, his first act as prime minister would be to unwind the price on carbon. Ms Gillard told Channel Ten's Meet the Press program this ''chest-beating'' would ''prove to be incredibly hollow''.

By next year, the carbon price would be a year old, the economy would have started to adjust and ''people would have got the money in their hands''.

''Mr Abbott, I think, will find it very difficult indeed to pretend to the Australian people that he is going to seriously dismantle all that,'' she said.

Alumina Rejects Wagerup Carbon Tax Claim

Alumina Ltd says the high cost of construction in Western Australia rather than the carbon tax is a key reason that the expansion of its Wagerup alumina refinery has stalled.

WA's Environmental Protection Authority on Monday granted AWAC, Alumina and Alcoa's joint venture company, an extension until September 2016 to substantially commence the expansion that was first given environmental approval in 2006.

The Australian newspaper this week reported an Alcoa spokeswoman as saying the company would not revisit the expansion until it had a clearer picture of the full impact of the carbon tax, due to start on July 1.

The media report also cited the need to secure energy supplies, which Alumina chief executive John Bevan concurred with on Thursday.

But, Mr Bevan said, it was 'not the case' that the carbon tax was the key reason the project was not yet going ahead.

'The capital cost of building in WA is high, as seen with BHP's Worsley (refinery),' Mr Bevan told a conference call for analysts.

The cost of expanding BHP Billiton's Worsley alumina refinery in WA has blown out substantially due to factors including inflationary pressures and the stronger Australian dollar.

This had prompted analysts to speculate recently that the asset may be sold by the mining giant.

Alcoa last week announced that AWAC could close one of its two Australian aluminium smelters, Point Henry in Victoria, in the face of continuing difficult global economic conditions for the industry.

The company warned in January that it planned to close or curtail about 12 per cent of its global smelting capacity to improve its competitiveness amid falling aluminium prices and escalating raw materials costs.

The Point Henry announcement triggered a parliamentary furore, with federal Opposition Leader Tony Abbott blaming the possible closure on the government's carbon tax.

Prime Minister Julia Gillard labelled his comments a disgrace given that 600 jobs at the smelter hung in the balance.

'It (the potential Point Henry closure) is really not firm at this stage,' Mr Bevan said on Thursday, adding that Alcoa's global curtailments would occur in the next four or five months.

In delivering a near fourfold surge in full-year net profit on Thursday, Alumina said costs at Point Henry and its other aluminium smelter in Portland, Victoria, were last year pushed up by increased alumina and coke prices, and the rising Australian dollar.

Alumina booked a net profit for the 12 months to December 31 of $US127 million ($A119.16 million), up from $US35 million ($A32.84 million) for the 2010 calendar year.

Mr Bevan said margins rose after the company moved to price some of its alumina on an index/spot basis.

Morningstar analyst Mark Taylor said a 55 per cent rise in underlying earnings to $US128 million beat the investment research firm's forecast of $US113 million ($A106.02 million).

The company to maintain its full year dividend at six cents per share.

Mr Bevan said the company was cautious on the outlook for 2012, reflecting volatile pricing conditions, a strong Australian dollar and high input costs.

Conditions deteriorated towards the end of 2011, with prices for Alumina's products falling significantly.

Shares in Alumina closed up 1.5 cents, or 1.3 per cent, at $1.17.