The carbon tax in Australia: impacts on income distribution, employment and competitiveness

Rahman, Mohammad Mafizur (2013) The carbon tax in Australia: impacts on income distribution, employment and competitiveness. Academy of Taiwan Business Management Review, 9 (3). pp. 12-19. ISSN 1813-0534

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The carbon tax in Australia, which is implemented from 1 July 2012, has become a controversial issue to the policy makers and people regarding its potential effects on the economy and society. Therefore, this paper analyses the various effects of the carbon tax with particular attention to Australian income distribution, employment and international competitiveness.

The carbon tax will increase the inequality between the poor and the rich, as the poor will be adversely affected because of increased price of almost all essential items even in the presence of the government support program; regional disparity is also likely to increase. Employment will be reduced especially in coal, mining, steel, automotive and other manufacturing industries which will cause the shrinkage of GDP. The international competitiveness of Australian industries will also be reduced, as these industries will suffer because of higher production cost compared to foreign competitors. Some policy options such as reduction of goods and services tax (GST), a tax free allowance for essential use of energy, a lower carbon tax rate, border tax adjustments, permanent financial support to the poor may be considered to reduce the regressive effects.

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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Publisher Version restricted in accordance with copyright policy.
Faculty / Department / School: Current - Faculty of Business, Education, Law and Arts - School of Commerce
Date Deposited: 22 Mar 2014 00:00
Last Modified: 14 Sep 2017 22:55
Uncontrolled Keywords: carbon tax, Australia
Fields of Research : 14 Economics > 1402 Applied Economics > 140205 Environment and Resource Economics
14 Economics > 1402 Applied Economics > 140202 Economic Development and Growth
Socio-Economic Objective: D Environment > 96 Environment > 9607 Environmental Policy, Legislation and Standards > 960702 Consumption Patterns, Population Issues and the Environment
B Economic Development > 91 Economic Framework > 9199 Other Economic Framework > 919901 Carbon and Emissions Trading

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