Australia and New Zeland to Cooperate on Carbon Tax

June 21, 2011 Taxation in AustraliaTaxation in New Zealand

Australia Carbon TaxAustralia and New Zealand are looking set to cooperate on the issue of emissions taxation, despite the continuously escalating debates about the tax in Australia.

On June 20th the Prime Minister of Australia Julia Gillard and the Prime Minister of New Zealand John Key spoke at a joint press conference in Canberra, announcing that the two countries are set to work together in an effort to form a cooperative emissions trading scheme.

Julia Gillard and John Key explained that the economies of Australia and New Zealand are closely linked, creating an opportunity to form a strong and effective bilateral emissions taxation system. The Australian Prime Minister said that tax authorities and policy makers from both countries would soon begin work to amend rules and create legislation which would allow for businesses on either side of the Tasman to trade carbon credits between the two jurisdictions. In 2008 New Zealand instated its own emissions trading scheme, which requires polluters to purchase emissions units for the amount of carbon dioxide they release into the atmosphere. Operators with unused units are able to sell their allocation to other producers, if they wish.

On the same day, leader of the Liberal Party of Australia Tony Abbot put forward a private member’s bill that calls for a public vote to be held regarding the future country’s emissions tax system. According to an announcement made by the Australian government late on June 20th, the bill could potentially be brought in front of the national Senate as early as June 23rd. The Australian Green party has already called the move a “political stunt”. Near the end of the day Tony Abbot commented on his proposal, saying that it would cost the government approximately AUD 69 million to hold the referendum.

Photo by nznationalparty