Carbon tax scrapped: PM Tony Abbott sees key election promise fulfilled after Senate votes for repeal

Updated

Australia no longer has a carbon tax, after the Government finally secured enough Senate support to kill it off, fulfilling a key election promise for Prime Minister Tony Abbott.

The final vote to scrap the carbon tax was won by the Coalition 39 to 32, with the micro-party senators, including those from the Palmer United Party, voting with the Government.

It was the Government's third attempt to repeal the tax since introducing the legislation last November.

Mr Abbott has campaigned for years to rid Australia of a carbon pricing scheme, arguing the tax is "toxic" and has been hurting ordinary people.

He says households will benefit on average by $550 a year from the repeal, with gas prices to fall by 7 per cent and electricity prices by 9 per cent.

On ABC's 7.30 tonight, Mr Abbott said the drop in the price of power will flow through to other products.

"Because the price of power is a component of just about every price in the economy, when the price of power falls, other prices should go down as well," he said.

"And we'll have the ACCC there as a policeman. The ACCC is currently monitoring some 570 businesses to ensure that their prices go down commensurately with the abolition of the carbon tax."

He said the end of the carbon tax will boost confidence - but would not put a figure on the resulting economic growth.

"I certainly think it's good for confidence when governments get a very significant part of program through the Senate, particularly after all of the sound and fury that we've seen from the Labor Party in the last few months," he said.

"It will be good for confidence - the abolition of the carbon tax. It will be a sign to the Australian people that this is a government which does keep its commitments."

And he dismissed the suggestion the carbon tax savings for households would be cancelled out by the tax increases announced in the budget.

"This is all part of a fairly comprehensive economic plan, all the bits go together," he told 730 host Sarah Ferguson.

Future of PUP's emissions scheme to be resolved

But the vexed debate, which has contributed to the political demise of no less than four political leaders in recent years, is set to live on.

In heralding the demise of the carbon tax, Mr Abbott has failed to rule out ever having a price on carbon.

"Well, what I'm saying is that we've just scrapped the carbon tax," he said.

When pressed if he would ever introduce any carbon-pricing mechanism, Mr Abbott again left open the possibility.

"We certainly will not do anything that damages our economy or puts our people and our businesses at an unfair competitive disadvantage," he said.

Abbott claims scalp of 'toxic tax'

Will Tony Abbott's deal with PUP to axe the carbon tax come back to bite the Government?

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"We're never, ever going to do that."

The Palmer United Party, whose three senators hold crucial crossbench seats, has demanded an emissions trading scheme be put in place.

The PUP scheme would sit as an empty framework that would only come into effect when Australia's major trading partners, including India, introduce an ETS.

PUP senator Jacqui Lambie says the Coalition has "absolutely" ceded to the request and that Clive Palmer will "enjoy" moving the amendment when Parliament resumes in August.

"I would expect that to go through in next sitting of Parliament. We don't want to be mucking around with it because we don't want to be leaving big business in instability," she said.

"It is an iron-clad guarantee but we've seen many lies produced already out of the Abbott-led Government.

"We'll be pretty disappointed if he doesn't run with an ETS, it would be a really bad career move from Mr Abbott to do that."

But a spokesman for Senator Lambie has since said that no deal has been done and a spokesman for the Environment Minister Greg Hunt says the PUP senator is wrong and the Government has not negotiated a deal on an ETS.

Labor will take ETS policy to 2016 election

Regardless of how those discussions end, the issue will continue to play a part in the nation's political debate, with Labor on Thursday morning confirming, for the first time, that it will take a policy of bringing back an emissions trading scheme to the 2016 election.

Opposition Leader Bill Shorten has labelled the Government's alternative Direct Action policy a "climate sceptic" approach.

"We believe that to take effective long-term action on climate change, an emissions trading scheme is the best way to go," he said.

The Greens have also vowed to campaign to bring back "rigorous" laws to address climate change.

Leader Christine Milne said it was a "tragic day" and the Senate vote had left her "distraught".

Senator Lambie wants the mining tax dealt with as soon as possible, too.

"That'll be a good worth of work for us this week. So you beauty, one to go."

Senator Lambie also revealed that the PUP demand for supporting the mining tax repeal - that the SchoolKids bonus is not axed - has also won Coalition support.

"The SchoolKids bonus will stay. That's an absolute assurance. Yes, that's in one of our amendments."

Sorry, this video has expired Video: The Senate debates and repeals the carbon tax (ABC News)

Topics: government-and-politics, federal-government, federal-parliament, emissions-trading, australia

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