Australian carbon tax is levied

Australians now pay AU$23 per tonne of CO2.

The Australian carbon tax came into effect on Sunday, at a price of AU$23 per tonne of CO2. The tax is supported by just a third of Australians, and has driven support of the Labor party, which leads the coalition which introduced it, to a forty year low, but many campaigners consider it a forward-looking measure.

The price will rise by 4 per cent a year for the next two years, before the tax becomes an emissions trading scheme in 2015. From then on, the cost of a tonne of carbon will be set by the market. A number of concessions had to be made to get the tax through the legislature at all, including exempting agriculture entirely and issuing large rebates – of up to 94.5 per cent – to industries like steel and aluminium mining, which take the largest hits from being undercut by foreign businesses.

The target is to reduce the countries emissions by 5 per cent by 2020, and 80 per cent by 2050, from 2000 levels. As it stands, Australians create more CO2 per capita than any other developed country. The country is responsible for 1.5 per cent of global greenhouse gas emissions, just 0.2 per cent less than Britain, which has three times the population.

The tax itself has been set at a relatively low figure. The Stern review, the seminal 2006 report by the economist Nicholas Stern, is commonly thought to have lowballed the damaging effects of climate change, and still suggested that the social cost of a tonne of carbon was in the order of $85 (AU$83). It is also intended to be revenue neutral, and in order to avoid what would otherwise be regressive effects, most of the money is being used to effect major cuts to income tax. The threshold for income tax raised by over $10,000 to $18,200 yesterday, and even direct payments into bank accounts under the name "Clean Energy Advance". Overall, any household earning udner $80,000 should be better off after the changes.

All of which appears to have done nothing for the popularity of the tax, which is hurt by the sheer strength of climate scepticism in Australia. Not only is the opposition leader, Tony Abbott, a climate skeptic, but the views of right-wing shock-jock Alan Jones are representative of a relatively large section of the population:

What [Prime Minister Julia Gillard] has done ... is to diminish the image of parliament and politics in the eyes of the public. The notion of global warming is a hoax, this is witchcraft. . . There are stacks and stacks of eminent scientists all over the world who've argued it's witchcraft. . . I have interviewed every one of them on my program and not one syllable they have uttered has been produced on any other media outlet anywhere in Australia. . . There is a conspiracy in this country to deny the other side.

Nonetheless, the government – made up of a coalition between the Labor party and the smaller Greens – has hope for the policy. Greens leader Christine Milne says:

I think people will shrug their shoulders and say 'what was all that about'. People will start to get angry with the Coalition [the opposition party], for having made all the claims they've made.

Even Milne seems to be anticipating a Coalition victory in the next elections, and no surprise. If there were an election today, they would win in a landslide. But as she says, the tax is in place, and it may be that by the time of the next election, there are more important questions to answer.

Protesters don't like Julia Gillard. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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I was wrong about Help to Buy - but I'm still glad it's gone

As a mortgage journalist in 2013, I was deeply sceptical of the guarantee scheme. 

If you just read the headlines about Help to Buy, you could be under the impression that Theresa May has just axed an important scheme for first-time buyers. If you're on the left, you might conclude that she is on a mission to make life worse for ordinary working people. If you just enjoy blue-on-blue action, it's a swipe at the Chancellor she sacked, George Osborne.

Except it's none of those things. Help to Buy mortgage guarantee scheme is a policy that actually worked pretty well - despite the concerns of financial journalists including me - and has served its purpose.

When Osborne first announced Help to Buy in 2013, it was controversial. Mortgage journalists, such as I was at the time, were still mopping up news from the financial crisis. We were still writing up reports about the toxic loan books that had brought the banks crashing down. The idea of the Government promising to bail out mortgage borrowers seemed the height of recklessness.

But the Government always intended Help to Buy mortgage guarantee to act as a stimulus, not a long-term solution. From the beginning, it had an end date - 31 December 2016. The idea was to encourage big banks to start lending again.

So far, the record of Help to Buy has been pretty good. A first-time buyer in 2013 with a 5 per cent deposit had 56 mortgage products to choose from - not much when you consider some of those products would have been ridiculously expensive or would come with many strings attached. By 2016, according to Moneyfacts, first-time buyers had 271 products to choose from, nearly a five-fold increase

Over the same period, financial regulators have introduced much tougher mortgage affordability rules. First-time buyers can be expected to be interrogated about their income, their little luxuries and how they would cope if interest rates rose (contrary to our expectations in 2013, the Bank of England base rate has actually fallen). 

A criticism that still rings true, however, is that the mortgage guarantee scheme only helps boost demand for properties, while doing nothing about the lack of housing supply. Unlike its sister scheme, the Help to Buy equity loan scheme, there is no incentive for property companies to build more homes. According to FullFact, there were just 112,000 homes being built in England and Wales in 2010. By 2015, that had increased, but only to a mere 149,000.

This lack of supply helps to prop up house prices - one of the factors making it so difficult to get on the housing ladder in the first place. In July, the average house price in England was £233,000. This means a first-time buyer with a 5 per cent deposit of £11,650 would still need to be earning nearly £50,000 to meet most mortgage affordability criteria. In other words, the Help to Buy mortgage guarantee is targeted squarely at the middle class.

The Government plans to maintain the Help to Buy equity loan scheme, which is restricted to new builds, and the Help to Buy ISA, which rewards savers at a time of low interest rates. As for Help to Buy mortgage guarantee, the scheme may be dead, but so long as high street banks are offering 95 per cent mortgages, its effects are still with us.