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The carbon tax and governance

Comments on Dennis Shanahan “Credibility joins carbon crusade”, 17/08/2011, http://www.theaustralian.com.au/national-affairs/commentary/credibility-joins-carbon-crusade/story-e6frgd0x-1226116270286
The government would sound more credible if it hasn't used the carbon tax as a way for wealth/income redistribution as it has proposed in its carbon tax package, and it got a border carbon adjustment to not distort and reduce Australians' comparative advantage in trade of goods and services with other nations.

These fatal shortcomings of the government's carbon tax bill are related to ALP Robin Hood ideology and its cowardice to confront other powerful nations in terms of equal treatment.
Of course, the compensations for businesses should not be as generous to recognise that businesses can pass the higher costs due to carbon tax either fully or at least partially as they are proposed in the bill, and more compensations should be for households on an equal per capita basis to remove the income distribution effects.

Further, it is hard to understand why it will be necessary to move from a carbon tax system to an ETS, given that the former is more efficient and involves fewer transaction costs. Of course, some financial market participants would like to have an ETS for the addition financial opportunities created by that to benefit from it. Further, bureaucrats would like it to create more government jobs and powers for them.

Taken together, it shows the government is incompetent, out of date and out of touch. This is another reason that it would be better for the government to seek a mandate for its carbon tax and ETS at an election. I should say I am not politically biased and is not pro or against any of the major political parties and I just would like to see fairness in politics and in governance.

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