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Published 08 May 2013 08:20, Updated 09 May 2013 11:28
Greg Combet said the tax cuts would be deferred until the carbon price recovered to $25.40 after it was linked with the European carbon price in 2015. Photo: Alex Ellinghausen
Federal Minister for Climate Change Greg Combet has confirmed the government will defer $1.4 billion of tax cuts that were supposed to be funded by revenue associated with the carbon tax at next week’s budget.
Combet said the tax cuts would be deferred until the carbon price recovered to $25.40 after it was linked with the European carbon price in 2015.
The Australian Financial Review reported on Wednesday that the tax cuts would be dumped and there would be cuts to clean energy initiatives as steep falls in the projected carbon price hit forecast government revenues.
Combet said the extra tax cuts scheduled to come into place in 2015, when the carbon price morphed into an emissions trading scheme, were no longer necessary thanks to a fall in the projected price of permits.
He confirmed next week’s budget would include an official revision of previous forecasts that the price would be $29 a tonne in the 2015-16 financial year.
“A lower carbon price also means a lower cost to households and businesses to cut our pollution,” Combet said. “It means we will still achieve our targeted greenhouse gas emission cuts.”
“Because there will be no additional anticipated increase in costs to households in 2015-16 with a lower carbon price forecast, the budget will defer an additional further round of additional related tax cuts.
“When the carbon price rises again in the future, and there will be regular reviews as I said, those tax cuts will still be implemented at that point in time.”
Combet also confirmed there would be cuts to the clean energy package, which he said would remain “broadly budget neutral” in this year’s budget.