Australians Will Embrace the Carbon Tax

By Julia Gillard

Australia's present prosperity is built on the hard work of every Australian and the hard decisions we have made, together, for reform. But many of the reforms we look back on today as necessary changes were deeply controversial at the time of their introduction.

Mabo and the divisive debate in this country about native title is just one example. It's also hard to imagine, for instance, that there was a time when a capital gains tax was considered a certain election loser by every political professional. It's just as hard to imagine a major party today going to an election promising to "roll back" the goods and services tax.

This has been just as true of reforms designed to protect our environment. In their time, protecting the Franklin River, Kakadu and the Daintree rainforest were big political debates with many predictions of economic catastrophe.

The real test for all policy reforms is the difference they make in the lives of every Australian, which is why the best judge for these reforms is the Australian people themselves. I have great confidence in the common sense and judgment of the Australian people. I know Australians set the bar high for politicians who want to make big reforms in our country, but Australians also set the bar high for politicians who make big statements that our country will be destroyed by reform.

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So now, Australians have a chance to see carbon pricing in action for themselves. Is it a wrecking ball, a python squeeze or is it a sensible policy to cut pollution? You decide.

Australians won't just see the carbon price in action from this week, they'll see the household assistance we are delivering as well. I am acutely conscious of the financial pressure felt by many Australians, not just families, but singles and pensioners as well. Ensuring Australians get their share of our prosperity is at the centre of my government's plans. The Schoolkids Bonus, the childcare rebate and paid parental leave, record pension increases and low interest rates are all making a difference. And now the carbon price is funding generous assistance to working Australians. Australian families and pensioners have already received an initial payment in May or June to help with their utilities bills. This pay day, all taxpayers with incomes up to $80,000 will get a tax cut, with most getting a tax cut of at least $300 a year. This week, the tax-free threshold is tripled, which means that almost a million people won't pay any tax out of their next take home pay, including 600,000 working women. Single pensioners will get $338 more every year and couple pensioners get $510 more every year combined.

Put it another way: the average impact of the carbon price on electricity bills will be $3.30 this week. And this week, we are providing an average of $10.10 to each household, in tax cuts and payment increases.

And Australians will see more important clean energy projects as well. Our carbon price will cut carbon pollution and it will strengthen our economy.

I can see the world changing to cleaner sources of energy right now and I know we must not be left behind. I don't want all the scientific and technical expertise we have, especially in solar research and development, only to benefit companies in China and India, Europe and the US. I want Australia to develop and benefit from new technologies, whether that's energy efficiency in our commercial and industrial buildings and our homes, whether that's on our farms and in our food processing factories, even in our landfills and down our mines.

Did you know the Chinese company Suntech, whose chief executive Zhengrong Shi was educated at the University of NSW, became the world's largest producer of silicon solar modules in 2010? Or that in 2010 global investment in generating renewable energy such as solar and wind power overtook investment in generating energy from fossil fuels?

Our price on carbon is driving the transformation of our economy to a clean energy future, creating investment in renewable energy and tens of thousands of green jobs over the next 20 years.

And we are doing it the Labor way by looking after those who need our help the most.

In the coming months, Australians will be able to make up their own minds about the true impact of this change. My view is that in this debate, like so many before it, we will one day wonder what all the fuss was about.

Julia Gillard is prime minister of Australia.

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