17 Jul 2013

Australia drafting emissions trading legislation

2:34 pm on 17 July 2013

Australia will have draft legislation to bring forward an emissions trading scheme ready before the election, the climate change minister says.

Prime Minister Kevin Rudd announced on Tuesday Australia will move to a market-based emissions trading scheme (ETS) from July 1, 2014, one year earlier than planned.

The move to a floating carbon price will cost the budget $A3.8 billion over the next four years, of which $A1.8 billion will be made up from fringe benefit tax changes relating to salary-sacrifice and employer-provided motor vehicles.

The car industry has slammed the move, but Climate Change Minister Mark Butler says the changes are about ensuring tax concessions are properly targeted.

He dismissed claims from energy and gas companies that the change to a floating carbon price would send negative signals to international investors.

Mr Butler said draft legislation for the changes would be ready ahead of this year's general election.

"In the event that parliament were to resume before the election, I could take draft legislation to the parliament," he said.

"It may well be that legislation would be rejected by either house, in which case we would take it to the election seeking a mandate from the people."

Opposition industry spokeswoman Sophie Mirabella described the changes to tax concessions for employer-provided cars as a "slap in the face" for the country's struggling car industry.

Finance Minister Penny Wong defended the continuation of carbon tax compensation for households.

"I don't mind pensioners having a little bit more in their pockets," she said.