Key sees trans-tasman carbon tax

The Emissions Trading Scheme could eventually be harmonised with Australia’s carbon tax, but only if the tax survives, Prime Minister John Key says.

The Australian tax has now been introduced, but polling across the Tasman shows it to be highly unpopular.

Mr Key said it was ‘‘very unsettled times’’ for climate change. The two schemes had been designed so that they could work together, he said.

‘‘It wouldn’t make sense to have a situation where eventually New Zealand companies packed up and went and worked in Australia because they thought that they were going to get a better deal from climate-change policy.’’

But while the ‘‘aim of the game’’ was to harmonise the system, it was a longterm programme.

The carbon tax was very unpopular in Australia and there would be a general election there next year, he said.

A compatible system made sense given Closer Economic Relations and the Australasian market.

The New Zealand system was cheaper than the Australian tax – about $12.50 compared with $25, Mr Key said.

Australian Prime Minister Julia Gillard has called opposition leader Tony Abbott’s bluff, saying she did not believe he would repeal the carbon tax if he won the election.

The A$23-a-tonne (NZ$29) carbon price, to be paid by about 300 heavy carbon emitters – mostly companies and councils – came into effect yesterday.

Its introduction comes after years of debate over carbon pricing as a sol- ution to climate change, and kicks off a fortnight of busy campaigning by the major parties.

The Gillard Government believes that once the carbon price comes into effect, Australians will realise it has only a modest effect on their daily lives and the acrimony towards the policy will subside.

Mr Abbott yesterday repeated his vows to scrap the carbon price.