They argue that Labor proposed to ''terminate'' the tax at the last election and to simply block its repeal would allow the government to continue to punish it politically. Labor is considering supporting the scrapping of the carbon tax to allow for a wider argument for action against climate change. Credit:Paul Jones Mr Shorten is also worried that continual focus on the tax will distract from serious flaws in the government's $3.2 billion ''direct action'' policy, which Labor will oppose. Under direct action, taxpayer dollars are used to pay polluters to reduce emissions and to fund other initiatives in forestry, carbon capture and recycling. A survey of economists by Fairfax Media found only two of 35 supported direct action over an emissions trading scheme, which uses a floating carbon price driven by the global market.

Labor will continue to back some form of carbon pricing but reserves the right to deliver its policy closer to the election. Meanwhile, it will scrutinise direct action. Illustration: Ron Tandberg. Independent analysis of direct action suggests it will not be able to reduce emissions by the bipartisan target of 5 per cent by 2020 without more funding - which has been ruled out by Prime Minister Tony Abbott. A senior Labor source said the party would not countenance weakening the target, amid concern that the legislation to repeal the carbon tax will change the status of the 5 per cent target from a legally enforceable cap to merely an aspiration. ''We are happy to get rid of the tax but we do think there should be a cap on pollution,'' said one Labor insider.

Mr Abbott has made the repeal of the tax his legislative priority when Parliament resumes in two weeks. He has urged Labor to ''repent'' and support the government. A number of Labor sources acknowledge there has been a shift in sentiment since the election. Even so, the shadow cabinet is yet to finalise Labor's position and wants to see the final shape of the government's legislation before making any commitment. Labor's climate change spokesman, Mark Butler, hinted strongly at the weekend that the option of backing the repeal bills was being considered, saying that the final policy ''will be informed by the fact that we took to the last election a commitment ourselves to terminate the carbon tax''. John Scales of JWS Research said polling showed that the carbon tax had dominated the climate change debate in recent years and undermined support for action. Loading

He said the tax was widely seen through the prism of former prime minister Julia Gillard's broken promise when she introduced the impost, and through its impact on electricity and other prices. Mr Abbott has already begun to call Mr Shorten ''Electricity Bill'' as he goads him to support the repeal of the tax. With it gone, Mr Scales said Labor would have clear air to make direct action its target and to develop its alternative.