The true cost of Labor's energy tax revealed

Media release

20 March 2019

The Fisher Report, published today by independent consultancy BAEconomics, confirms that Labor's 45 per cent emissions reduction target and 50 per cent renewable energy target will have a far-reaching and devastating impact on Australia's economy.

Today's release of the report - which has been peer reviewed by Professor John Weyant, Director of the Energy Modeling Forum and Deputy Director of the Precourt Institute for Energy Efficiency at Stanford University - reveals which sectors will be worst hit.

The Fisher Report reveals that under Labor's target the agriculture, construction, manufacturing, coal mining, oil and gas production, and transport sectors will pay a heavy price.

Regional economies that depend on industries like these will be hardest hit, but no Australian will escape the impact of Labor's economic wrecking ball.

Labor's targets will punish Australian families already struggling with cost of living pressures, and destroy the industries that have made our economy strong.

The modelling also shows that if Labor does not use Kyoto carryover the effects of Labor's policy on Australian jobs and wages will be even worse than first predicted.

Without the use of carryover:

  • A $472 billion hit to the economy will more than double to $1.18 trillion,
  • Real wages will fall every year and be approximately $24,000 less than they otherwise would be in 2030,
  • 580,000 fewer Australians will be in full time employment, and
  • A 58 per cent increase in wholesale electricity prices becomes a 94 per cent increase.

For three and a half years, Bill Shorten has failed to reveal the detail of Labor's climate policy. Now we know why.

Labor has an aggressive, economy-wrecking target and no plan to get there.

While Bill Shorten continues to avoid these important questions, the Morrison Government is getting on with the job of delivering emissions reductions in a balanced and sensible way.

The Morrison Government has mapped out its plan to meet and beat Australia's 2030 Paris target.

Our fully costed, fully funded Climate Solutions Package will deliver over 200 million tonnes of abatement by 2030, while reducing energy costs for families and businesses.

When Labor left office in 2013, they left Australia 755 million tonnes behind in getting to our Kyoto targets. The Coalition Government has turned that around by 1.1 billion tonnes, so we now have an overachievement of 367 million tonnes.

Australians should be proud of our track record of meeting our international obligations.

Under a Morrison Government, Australians can be assured we will continue to meet our obligations without having to slash jobs, close down industries and decrease wages.

Only the Morrison Government can be trusted to stand up for Australian families and defend Australian jobs. We recognise the importance of protecting the environment while keeping our economy strong and without hitting the pockets of hardworking Australians.

Hardworking Australian families and businesses deserve the truth from Bill Shorten on how he intends to reach Labor's economy wrecking emissions reduction target.

Table 1: key economic impacts, 2030

  45% with carryover 45% without carryover
Abatement task 959 million tonnes 1.33 billion tonnes
Real wages -$9,000 or -8% -$24,000 or -23%
Full time employment -336,166 -586,202
Cumulative GDP losses 2021-2030 $472 billion $1.18 trillion
Effective carbon price $326/tonne $696/tonne
Increase in wholesale electricity prices 58% 94%

Table 2: percentage change in sectoral output, 2030

  45% with carryover 45% without carryover
Crops -2.7 -6.8
Livestock -2.6 -0.7
Forestry -1.6 2.0
Fishing -8.6 -15.5
Thermal Coal -44.0 -63.8
Metallurgical Coal -13.2 -26.7
Oil and Gas -1.6 -14.5
Oil refinery -17.0 -36.7
Iron Ore 3.8 11.3
Other mining1 -13.0 -22.3
Food processing -3.0 -3.7
Chemicals, rubber and plastic -15.8 -38.9
Manufactures non-metallic mining products -9.3 -20.9
Other manufactures -4.6 -19.3
Iron and Steel -11.0 -31.4
Non-ferrous metal -37.0 -67.1
Electricity -14.0 -23.8

1 Other mining includes mining services.

To read the full report visit: www.baeconomics.com.au

Minister for Energy