| Sourced From |
The Organisation for Economic Cooperation and Development (OECD) has given the Government a thumbs up for the idea of a minerals resource rent tax, but has warned the tax rate is too low.
The organisation is recognised around the world as the group to turn to for advice on achieving sustainable economic growth and raising living standards.
It says Australia should adopt a carbon price sooner rather than later, saying delays have increased uncertainty in the energy sector.
Prime Minister Julia Gillard says she will consider the recommendations of the report on board.
But she says she has already made an agreement with the miners.
“I entered an agreement with Australia’s biggest miners about the way in which this tax would be constructed,” she said.
“We have got the policy transition group working on the details. I am certainly intending to hold to the agreement that I made.
“We have, obviously, worked through to get a consensus in difficult circumstances, and I will hold to that consensus.”
The Coalition is opposed to the tax and the Government will have to get support from the independents in the Lower House to pass it.
From July next year, the Government will need the support from the Greens in the Senate if it wants the tax passed.
Greens Leader Bob Brown says the report will help in political negotiations over the tax.
“We will be now armed with the OECD report in negotiations with the Treasurer and the Government leading to their legislation on the minerals tax next year to try to get them to go back to the prescription from Treasury and the Rudd Government to have a 40 per cent level of taxation,” he said.
“But also to put it into a sovereign fund for the nation’s future for things like high speed rail, the rollout of increased funding for education and health in the nation’s future.”
Greens Senator Christine Milne says the OECD report card should shame the Coalition into supporting a cross-party push to put a price on carbon.
She says subsidies are necessary to help encourage renewable energy development.
But she says the organisation’s support for a carbon price puts more pressure on the Opposition.
“It’s a critical time in Australia, but it’s a big time of opportunity as well because a price on carbon will push the transformation in Australia to renewable energy with all the jobs and manufacturing opportunities that that should bring,” she said.
“This is a big time of transition, of transformation.
“The OECD recognises the urgency, the climate science says the urgency is critical, but more importantly this is a time to face a different future in Australia, one that is not so dependent on fossil fuels.”
Impressive economy
The OECD report does give the Government some ammunition on its key policy for tackling greenhouse gas emissions.
It warns that regulatory measures, like those proposed by the Opposition, are too expensive for the economy – potentially double the cost of market-based approaches like an emissions trading scheme.
The OECD also called on the Federal Government to put more money into infrastructure and housing.
The Paris-based OECD says the Government’s handling of the global financial crisis was impressive.
It says its stimulus packages were possible due to the successive surpluses. Its omits to say they were left by the Howard Government.
As the economy recovers, the organisation warns inflation will pose a risk and it says the Government will struggle to keep its promise of a 2 per cent spending cap.
It says rationalising subsidies to the automotive sector and cutting drought assistance could help the Government keep within the cap.