A carbon tax would help substantially in tackling two of the major problems facing Australia today: climate change and paying for the government services that we want.

Given the misrepresentations in response to the recent budget’s tax changes, it seems unlikely that the Albanese Government will readily embrace further tax reform. Nevertheless, a carbon tax is the best way to respond to two of the major policy problems facing Australia: climate change and the need to cut carbon emissions; and our inability to properly fund the government services that we are demanding.

Unfortunately, Angus Taylor and his parliamentary colleagues have reversed the Coalition’s previous commitment to net zero by 2050. But that policy reversal tells us more about them and their pursuit of populism, while the evidence is irrefutable that we must all reduce carbon emissions.

The most recent data show that carbon emissions in Australia are at last starting to fall and were 2 per cent lower in 2025. The biggest source of carbon emissions has been electricity production and understandably the government is congratulating itself that in the last six months half of Australia’s electricity was generated using renewable energy, but transport carbon emissions also fell a little as people are switching to electric cars.

According to the Climate Council, “on average in 2024-25, the wholesale price for power from renewables was $74/MWH – compared to $136/MWH for power from coal or gas”. So, given this cost difference, we can be reasonably confident that market forces will lead us to achieving close to net zero carbon emissions from electricity generation. Why the opposition want to switch back to coal defies common sense as well as simple economics.

Nevertheless, to accelerate the development of renewable energy, the Labor government has introduced a Capacity Investment Scheme to underwrite the risks of investing in new renewable energy generation and storage. This scheme has a target of 40GW of new renewable energy capacity and storage, but so far it has only commenced construction or commissioned less than 3GW of that capacity.

Most importantly, however, even back in 2019, electricity only accounted for 32 per cent of Australia’s carbon emissions, and that proportion would be lower today. Other major sources of carbon emissions are transport (18.1 per cent), industry and household direct consumption of fuels, like gas, (18.6 per cent), agriculture (12.3 per........

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