On September 7, 2013, Australia held its federal election, and a new government was elected. One of the policies of the new government is to repeal the carbon pricing mechanism ("CPM")—the carbon tax scheme. The government has released exposure drafts of eight repeal bills ("Bills") and an accompanying Repeal of the Carbon Tax Consultation Paper.
The Bills are open for public consultation, and submissions must be made by November 4, 2013. The Bills were tabled in Parliament on November 13, 2013. For the Bills to be passed, they must be approved by the House of Representatives and the Senate. The Senate is not controlled by the new government, so the support of independents will be required to pass the Bills. Following the election, a new set of independents will hold the balance of power in the Senate beginning July 1, 2014. The government will be counting on support from this new set of independents if the existing independents in the Senate do not pass the Bills before that date.
Key features of the Bills are to be as follows:
- The repeal of the CPM is to take effect from July 1, 2014, whenever the Bills are passed.
- The CPM is to continue operating until that time.
- The National Greenhouse and Energy Reporting Scheme is to continue to operate.
- Industry assistance provided under the Jobs and Competitiveness Program ("JCP") and the Energy Security Fund is to continue in 2013–2014, but there is to be a "true up" process for any under- or over- allocation of free units issued under the JCP.
- Planned 2015–2016 carbon price-related tax cuts are to be repealed.
- Any carbon units auctioned before the repeal takes effect are to be cancelled and refunded.
- The Climate Change Authority is to be abolished.
Also, it will be illegal to charge "unreasonably high" prices. The Australian competition authority will have extensive temporary extrajudicial investigative and administrative enforcement tools. Fines will be set according to the tariff for serious antitrust violations—up to 10 percent of the company's annual total turnover. Buyers of energy and synthetic gases can avoid honoring contracts or seek damages where the prices previously agreed with them or now offered to them are "unreasonable."
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