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March 26, 2009

Job fears in Gippsland and the Latrobe Valley have been further exacerbated by reports today that the Rudd Labor Government’s Emissions Trading Scheme (ETS) could slash the local economy by 20 percent over the next 40 years.

Frontier Economics has completed economic modelling which found that the impacts of an ETS would be much more severe in states and regions where emissions-intensive industries were the backbone of the economy.

The Nationals Member for Gippsland Darren Chester has been calling on the Rudd Labor Government to abandon the proposed ETS because of concerns it will cost jobs in regional areas like the Latrobe Valley.

Mr Chester said the modelling forecast devastating cuts to the Gippsland economy of more than one fifth.

“We cannot push ahead with the ETS knowing this sort of data is around,” Mr Chester said.

“In the middle of a global recession, the last thing we should be doing is creating uncertainty and undermining business and industry confidence.”

Mr Chester said there were enormous social and economic risks associated with the Rudd Government’s ETS and the environmental benefits are questionable.

“The big risk with Kevin Rudd’s ETS is that it will cost jobs in regional areas; drive future investment overseas; and transfer carbon emissions to other nations which have less rigorous environmental standards.”

Mr Chester said the Federal Government had so far refused to conduct its own economic modelling into the impacts on regional communities.

“This new study paints a very bleak future for Gippsland and the Latrobe Valley if the ETS goes ahead with any global agreement,” Mr Chester said.

“I’ve been saying all along that the ETS would lead to job cuts in the Latrobe Valley, but the Government has refused to consider the impacts of this policy at a local level.

“There is more evidence emerging every day that the ETS proposed by the Rudd Government will cost jobs at a time when Australia can least afford it and it should be abandoned before business confidence deteriorates any further.

“When we are faced with economic uncertainty and job losses in several industries, it is bizarre that the government would take any steps that could jeopardise investment in regional communities.

“Given that our nation’s contribution to emissions is less than two percent of the global total, anything we do in Australia needs to be put in a global context. If all we achieve by imposing this new tax is to force jobs offshore, we will have sacrificed our economy and the global emissions will probably increase.”

The report states that the economic downturn will inevitably be associated with a rise in social and community problems as businesses close, unemployment levels rise and real wages and house prices fall.

The ETS legislation is due to come before the Senate in June and is currently the subject of two Senate inquiries.  The Federal Opposition has called on the Government to model the short-term and regional effects of its proposal before the Senate votes on the issue.

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