Carbon tax divides Australia

Carbon tax divides Australia

Australia’s Prime Minister Julia Gillard is facing a fight to the political death over a carbon tax that has split the nation.

Five hundred of Australia’s worst polluters will be forced to pay AU$23 ($25;£15) for each tonne of carbon dioxide they emit under a scheme lauded by environmentalists as historic but condemned as economic madness by conservatives.

The Gillard blueprint aims to cut emissions by at least 5% of 2000 levels – or 160 million tonnes – within a decade. Multi-billion dollar compensation packages for businesses and tax cuts for households are an attempt to sweeten Australia’s most comprehensive economic reforms this century.

The sweeteners should secure legislative approval – but only just, thanks to crucial support from a handful of independent MPs and the Greens that gives the Labor government the slimmest of parliamentary majorities.

Ms Gillard is to spend two weeks travelling the country on an election-style road trip selling the pollution levy to a largely sceptical public. If she fails to convince the people, the fate of her government at the next election seems assured.