Expert Warns Carbon Tax Repeal Would Cost Millions

Professor George Williams warned Tuesday that a repeal of the carbon tax, as threatened by Opposition Leader Tony Abbott, would cost Australian taxpayers millions of dollars.

He said that by the time Abbott would be in power to abolish the carbon tax, the laws would be well entrenched by 2016. Williams added that only the High Court can decide if Abbott could repeal the carbon tax without paying compensation to companies that have invested under the clean energy laws.

"Parliament has created carbon units. They are described as property, and no doubt there could be a High Court test case whereby people could argue that if the legislation is repealed they must be given full compensation in return," Williams told Radio National.

The expert explained that the legislation defined the carbon units created under the law as a unit of personal property, which would make it harder for future national leaders to repeal the carbon tax law without compensation.

On the same day, the Greens warned also that Abbott would place jobs and future power stations at risk with a repeal.

"The problem we've got is that in the short term ... what he will be doing is driving up electricity prices, because we all know that if people can't hedge in terms of future investment it will drive up risk and drive up the cost of capital," SkyNews.com.au quoted Sen. Christine Milne.

"What (Abbott's) now doing is saying to all those people in rural and regional Australia, who are gearing up to invest in carbon in the landscape, that he will not honour that and that he will in fact undermine the prices they can possibly get," she added.

Besides repealing the carbon tax, opposition finance spokesman Andrew Robb threatened to stop federal funding for clean energy commitments.

"This will be a referendum, the next election, on the carbon tax and all of the associated reckless actions that this government has put in place including this $10 billion slush fund," Robb told The Sydney Morning Herald, referring to the planned Clean Energy Finance Corp.

In response to the continuing opposition threat to repeal the carbon tax, Prime Minister Julia Gillard pointed out that the group's climate change spokesperson hinted they would come up with a white paper on the carbon tax.

"That is code for they'd have an expert study to help them climb down from all the false promises they're now making about repeal to the Australian community," Gillard said.