Australia's new PM brings carbon tax repeal bill, as promised

SYDNEY (Reuters) - Australian Prime Minister Tony Abbott stuck to an election pledge on Wednesday to quickly repeal a carbon tax, introducing legislation as the new parliament met for the first time.

Australia's Prime Minister Tony Abbott speaks at a breakfast meeting in Jakarta October 1, 2013. Abbott is on a two-day visit to Indonesia file photo. REUTERS/Supri

Abbott, once a climate-change skeptic, was elected in September partly on the back of a plan to scrap a scheme to price the carbon emissions responsible for global warming.

But he faces a tough test to convince opposition politicians, with the Greens and Labor Party vowing to fight the changes.

“The election was a referendum on the carbon tax,” Abbott told parliament. “The people have spoken. Now it’s up to this parliament to show that it’s listened.”

The previous Labor government’s carbon pricing plan was aimed at reducing emissions by taxing major polluters with the world’s highest carbon price of A$23 ($22.23) a tonne before moving to a market cap-and-trade system by mid-2014.

Instead, the government will set up a so-called direct action plan, including an emission reduction fund and a market-based incentive for businesses to reduce greenhouse emissions.

Australia has the world’s highest carbon emissions per capita due mainly to its reliance on coal-fired power stations.

The bill should easily pass the lower house, where Abbott has a clear majority, but may find it hard to get through the Senate where the Greens, independents and several small parties hold the balance of power.

If the Senate blocks the bill, Abbott has promised to call a double dissolution of parliament to break the deadlock. Such a move, last called in 1987, would mean elections to both the lower and upper houses.

Abbott has a long reform agenda to address as he attempts to revive the economy in the face of a fading mining boom that has put pressure on tax revenues and the government’s debt position.

Labor and the Greens have vowed to fight plans to introduce laws to lift the government’s A$300 billion ($280 billion) debt ceiling to head off concern Australia could reach its limit before the end of the year.

Editing by Robert Birsel