Authority recommends against handouts to resource industry

The Grattan Institute has reviewed the assistance proposals from the government which detail handouts to resource sectors that will be affected by the carbon price and concluded that they are an unnecessary burden on the government and public.

Researchers Tony Wood and Tristan Edis believe that the proposed assistance is "costly and unjustified".

In a report released today on Climate Spectator (August 30), the pair asserted: "We call it New Protectionism because the bearer of the cost of special treatment for a few industries will be the whole Australian community."

The argument from industry lobbyists has been that coal mining and natural gas companies will face too great a cost through the carbon tax, which will result in utilities companies raising electricity prices.

However, Wood and Edis believe is it more beneficial for companies to feel pressured to implement changes first and lower emissions second - rather than to begin by providing handouts, which are more likely to delay any positive change.

By removing assistance, mining and electricity suppliers will be forced to transform their operations to a more eco-friendly model - which is the intended result of the carbon price in the first place.