7 Jun 2011

Carbon tax coming closer in Australia

7:33 am on 7 June 2011

Australia is a step closer to adopting a carbon tax.

In the past week, climate change adviser Ross Garnaut has delivered a report to the federal government advocating a price of between $A20 - $A30 per ton and rising 4% per year.

Mr Garnaut says the tax could raise about $12 billion in the first year, providing scope to compensate low income earners for the increase in energy costs.

While the opposition and miners vehemently oppose the tax, Radio New Zealand's Sydney correspondent says the government has received strong support from a group of 21 leading economists.

In an open letter, the group, which includes senior bank economists and a former Liberal Party leader, said a market solution to climate change is an essential structural reform for Australia.