AUSTRALIA’S commodity markets are facing unprecedented pressures from climate change and other pressures on supply and demand, and will not be able to withstand the pressure, the government’s chief economist has warned.

The Government has released a blueprint for the Australian economy that includes a plan to phase out fossil fuels and move towards a zero-carbon economy.

But the economy will struggle to achieve a balanced budget, which would require tax revenue to increase to keep up with rising costs, Professor Peter Koff, the Government’s chief economic adviser, said on Friday.

“If we are to maintain a balanced financial position in the future we are going to have to have a big shift in the way we generate income, both in terms of the income tax and corporate income tax,” he said.

Professor Koff said there were a number of factors that would have to be considered in any plan for a sustainable economy.

“Some of these are the growth of the domestic economy, the expansion of export markets, the growth in international trade and so on, but there are also other factors that will have to play a part,” he told ABC radio.

What will happen to mining?

“What we need to do is make sure that we are not making a mistake and the way to do that is to do the right thing and to make sure we are getting the best bang for the buck,” Professor Koff added.

There are some challenges in implementing a carbon price.

A carbon tax would increase emissions but it would only apply to electricity generated by existing coal, gas and oil and gas.

If a carbon tax was applied to food and dairy, for example, it would apply to all those who consume it and not just those that produce it, but Professor Kopp said it would be unfair to people who eat fish or produce it.

Australia already has a $100-a-tonne carbon tax on coal, but it has not been applied to agricultural emissions since 2012.

That has been part of a national strategy to cut emissions and encourage more investment in green technologies, but the Government has not provided any detail about the impact of the carbon tax.

Senator Brandis said he hoped the Government would have a plan in place to make the transition to a zero carbon economy.

But he said he was concerned about the lack of detail.

“We’re not saying that it’s the worst thing to do, but I think it’s a really difficult thing to get the information out there on this because there is a lot of different options out there and it’s not a one-size-fits-all, I think you’ve got to look at all of those,” he warned.

Topics:environment,economy,climate-change,energy-and-environmental-issues,economics-and.energy-industry,environment,government-and:government-to-government,government,business-economics,environmental,business,government—public-sector,government–politics,australiaFirst posted April 06, 2021 21:40:55Contact Pauline Henshaw