Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Hansard source

I am going to come to those questions. I am just responding to the point on the business sector. In relation to section 114, the government's advice is that the provisions do not contravene that provision of the Constitution.

In relation to local government, as I said, the impact, which includes the impact on council rates, is 0.7 per cent of CPI. You might recall that the GST introduction was a 2.5 per cent CPI increase. The government provides ongoing financial support to local government through the financial assistance grants. That is a pool of funding indexed to the CPI, so obviously that indexation of itself captures the carbon price impact.

A question on landfill was raised with me. Landfill operators who take action to reduce pollution from waste before 2012 can secure carbon credits under the Carbon Farming Initiative. If landfill operators use methane from landfill to generate electricity, they may be eligible for renewable energy certificates under the Renewable Energy Target. I am advised that legacy waste emissions are excluded from any liability and, therefore, it is expected that carbon farming credits from landfill waste will in fact exceed liability on landfills in the period to 2020.

The government also made some changes in the other place to landfill liability to further ease the burden on local councils. There will no longer be a liability on landfills that emit between 10,000 and 25000 tonnes. Landfill operators will be able to meet 100 per cent of their obligations using carbon farming credits. Regrettably, Senator, I think your party opposed those amendments. The Australian Local Government Association welcomed the outcome of this and the introduction of a market based approach to carbon pricing. They said:

The amended legislation addresses local government's concerns about the impact of a carbon price on small landfills, many of which are owned by councils.