The carbon tax, first introduced two years ago, has placed a $1.2 billion burden on the mining industry countrywide.
In Queensland alone, the net cost of the tax on the resources sector has been estimated at about $700 million this financial year.
Unsurprisingly, the Queensland Resources Council was among the more outspoken industry groups welcoming the tax’s repeal.
QRC chief executive Michael Roche said the tax was a “double-fail” and one of the biggest public policy mistakes in decades.
“It failed to achieve its environmental objective of reducing greenhouse gas emissions while loading the Australian economy with costs over and above anything imposed on minerals an energy export competitors,” he said.
“Report after report found that energy-intensive industries were likely to shift out of Australia to countries without an onerous tax on carbon.”
Roche maintained that without global alignment in emissions management, the imposition of a carbon price damaged the domestic economy without environmental benefit.
“An effective policy response to managing climate change requires a global agreement on greenhouse gas abatement including comparable emissions reduction commitments from all major emitting nations, substantial global investment in low emission technologies and mechanisms to encourage the lowest-cost abatement,” he said.
Meanwhile, the Chamber of Minerals and Energy of Western Australia emphasised the benefit of cutting the tax on its prime focus of lowering the high cost of doing business in Australia.
“The carbon tax repeal marks a milestone in delivering on the Abbott government election commitment to abolish unnecessary taxes and realise the resource sectors true economic potential,” CME chief executive Reg Howard-Smith said.
“The imposition of the world’s highest fixed price on carbon has placed a cost burden on Western Australian resource projects.”
The Australian Mines and Metals Association joined the CME in stressing that the repeal should be considered on the first step in a broader process of restoring the resource sector’s international competitiveness.
AMMA chief executive Steve Knott said the Senate decision put Australia back on a level playing field with its competitors, but stressed the need to follow up with a repeal of the mining resource rent tax.
“Repealing the carbon tax removes one of two ideologically driven, flawed taxes imposed by the former government that have added unnecessary costs and risk to investing and doing business in Australia,” Knott said.
“We need to remove the impediments that stand in the way of further development of our resources sector and secured the association employment opportunities and economic growth.
“Following that, as a nation, we need to get back in the business of long-term, sustainable workplace relations reform that will address deeper issues of productivity and competitiveness and bolster our reputation in the international marketplace.”
The Association of Mining and Exploration Companies put the repeal in the context of budget issues for companies in operating in the bush.
“The carbon charge through reduction in diesel fuel tax credit has meant all AMEC members are paying more for their energy,” AMEC chief executive Simon Bennison said.
“Due to their remote location, they do not have access to the power grid and therefore rely on diesel fuel as the primary source of power.”
Environmental groups reacted negatively to the decision, noting that Australia no longer had any working policy to cut pollution.
The Australian Conservation Foundation said that since the carbon price was introduced, pollution from electricity had dropped 10% while renewable energy increased by 37% in the last year along.
“Now we have no comprehensive scheme to stop big polluters from going back to the bad old days of free-for-all polluting and treating the air we breathe like an open sewer,” ACF chief executive Kelly O’Shannassy said.
“This backwards step makes Australia an international embarrassment.”