Australia PM fights to calm carbon tax fears

Julia Gillard, prime minister of Australia, with machine operators at a steel mill in Melbourne. She is on an election-style drive to win popular support for her carbon tax plans

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Julia Gillard swept into the heartland of Australia’s coal industry in the Hunter Valley north of Sydney on Tuesday intent on heading off opposition to her government’s unpopular carbon tax proposals.

In hard hat and orange fluorescent coat, Australia’s prime minister listened patiently to dozens of Centennial Coal miners who echoed widespread community fears that her carbon tax would destroy jobs, damage the nation’s lucrative mining and energy industries and push up living costs.

A little over a week after launching plans for a A$23 (US$24) tax for each tonne of carbon emitted by the country’s 500 biggest polluters, effective from July 2012, Ms Gillard is trying to convince a sceptical electorate of the merits of a reform that will place Australia nearer to the front of global action on climate change.

But her tax plan is so divisive in Australia that she has been forced to blitz the air waves and visit homes for the elderly, schools, factories, shopping malls and mines to shore up support in scenes more typical of an election campaign.

With a phalanx of TV cameras and photographers capturing her every move in the miners’ grubby muster hall, Ms Gillard took first-hand accounts of the workers’ concerns. Time and again she told the miners that the government would protect the coal industry with its A$1.3bn coal sector jobs package.

“We are confident in the future of coal,” she said. “Coal profits growth has been really strong.”

Ms Gillard also pointed out that the day after the carbon tax price was announced, Peabody Energy of the US declared its confidence in the industry by launching a A$4.7bn for Australia’s Macarthur Coal.

“Peabody’s interested in the biggest ever takeover of an Australian coal company because it knows there’s a great future in coal mining,” she said.

Centennial Coal is at the heart of Australia’s climate change dilemma. About 80 per cent of the nation’s electricity generation is fuelled by coal, which makes Australia among the highest per capita carbon emitters in the world. Coal is also at the top of the nation’s commodity exports and sales of the abundant fossil-fuel to energy hungry Asia have flooded Australia with wealth.

Doug Jones, a veteran of the Hunter Valley coal industry attending Ms Gillard’s visit, is in two minds about Ms Gillard’s carbon tax.

“By god we pump some shit into the air,” Mr Jones admits. “But I am coming to the end of my time here after 35 years and I have a son coming into this industry. I hope he can retire on a good note too.”

Col Fenwick, another coal miner, however has decided to back Ms Gillard for the “sake of his children”.

Richard Lloyd, also a Centennial coal miner, adds: “There is massive money in coal and the big companies are making big profits and they are not going to walk away from that,” he says.

His comments are at odds with the Australian Coal Association, an industry body that this week launched an anti-carbon tax advertising campaign. It has warned the policy will put 4,700 coal industry jobs at risk, 18 coal mines could be closed prematurely, and future employment in the coal industry could fall by 37 per cent.

“The Hunter Valley, like many of Australia’s coal communities, will feel the hit the economy is expected to take with the introduction of the carbon tax,” Ralph Hillman, the industry body’s executive director says. “It is not just the mines that will feel the effects but the thousands of small businesses that rely on them.”

Ms Gillard assured workers that Centennial’s coal mine would see out its 25-year production life.

“They’ve got a future here at this mine,” she said. “If their sons want to follow them into this industry, then they will have a future in coal mining too.”

Brodie Thomas, a coal miner for more than three decades, is firmly against the tax.

“The whole thing was derived by blackmail. Julia Gillard had to bargain her way into government [last August] and the Greens helped put her there,” Mr Thomas says, echoing a common suspicion in Australia.

Distrust of Ms Gillard is one reason why political commentators believe her attempts to convince the community are not gaining greater traction.

The Labor’s party’s primary vote languishes at just 26 per cent, while Ms Gillard’s approval rating has fallen to 34 per cent.

But Ms Gillard’s greatest weapon could be time. Barring unforeseen events, an election is not due until the second half of 2013 and Ms Gillard is showing every sign of fighting to stay in power until then.

With just enough support in both of parliament’s chambers, Ms Gillard’s carbon tax policies are likely to become law later this year. If opponents are incorrect and the tax ends up having a smooth introduction without big job losses, Ms Gillard will have a much easier story to sell.

As one Centennial coal miner lamented on Tuesday: “A lot of blokes here are against it but they still believe it will go through.”

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