KEVIN Rudd will push to dump the carbon tax and go straight to an emissions trading scheme in a bid to unshackle the government from the politically toxic policy.
The Daily Telegraph understands the carbon tax, which is due to rise by $1.15 per tonne to $24.15 next week, will top the agenda when the new Prime Minister convenes his first cabinet meeting, scheduled for Monday.
Sources close to Mr Rudd confirmed it would be a high priority and most likely be at the top of the cabinet agenda.
However, in a signal that he would conduct a consensus government, Mr Rudd indicated to colleagues no changes would be made without approval of the cabinet.
It is believed the sticking point will be how quickly Mr Rudd could drop the fixed carbon price and go straight to a floating market price, considering the significant cost in also retaining the household compensation package.
Axing the current fixed price for a market-based floating price could see the cost drop to as little as $6 a tonne.
It’s estimated the move could cost the government several billion dollars in lost revenue. With parliament not due to return before an election, Mr Rudd is likely to announce it as an election policy, with changes to come in next year. Such a change would require legislation, which the Greens have indicated they would not support.
“This is a priority issue,” a source close to Mr Rudd said.
The move would allow Mr Rudd to keep Labor’s commitment to a carbon price but distance his new government from Julia Gillard’s broken promise to not impose a carbon tax. Yet carbon is also something of a vexed issue for Mr Rudd, who famously described the onset of climate change as “the greatest moral, economic and environmental challenge of our generation”.