$1M fine for carbon tax price gougers in Australia

SYDNEY (AP) — Australia's government warned businesses Wednesday that they face fines of up to $1 million if they indulge in price gouging using an unpopular tax on polluting industries as an excuse.

The Australian Competition and Consumer Commission "will keep a watchful eye out for any shonky attempts to jack up prices and falsely claim it is related to the carbon price," Treasurer Wayne Swan told reporters.

The ACCC "will be the cop on the beat out there to ensure false claims are dealt with, and dealt with the full force of the law," he said.

Although the so-called carbon tax, which comes into effect next July 1, has pulled down public support for Prime Minister Julia Gillard and her Labor Party, it is unlikely to take a political toll immediately because elections are not due until late 2013.

"In 2013, people will have lived under the system, direct experience, real experience ... and then they will be able to decide," Gillard said Wednesday.

Besides the 1.1 million Australian dollar ($1.2 million) fine on industries, individuals caught profiteering face maximum penalties of AU$220,000.

The carbon tax will force the country's 500 worst polluters to pay AU$23 for every metric ton of carbon they emit. Critics say the polluters will pass the higher costs to ordinary Australians and that it will lead to job losses, particularly in the mining industry.

The government disputes that and says it will lead to a rise of only 0.7 percent in the cost of living because of a proposed assistance package worth AU$9.2 billion in compensation for industries affected by the tax. Nine out of 10 households will also receive some kind of assistance in the form of income tax cuts and payments.

But Gillard's credibility has taken a huge hit given that the Labor Party had vowed before the August 2010 elections, when it was elected by a narrow margin, not to impose the tax. The party has a single-seat majority in Parliament with the support of three independent lawmakers plus a member of the minor Greens party, which is the main proponent of the carbon tax.

Gillard's popularity is down to an all-time low of 27 percent, according to a recent opinion poll. The opposition Liberal Party has seized on the carbon tax, currently Australia's most hot-button issue, and its leader, Tony Abbott, has traveled from city to city to whip up public opinion.

Abbott said that while the government is vowing to crack down on misleading and deceptive conduct by businesses, "the most misleading conduct is by the prime minister herself. ... Every day the deception deepens."

The government hopes the tax will prompt companies to seek out clean energy alternatives to avoid the higher bills. Australia is one of the worst greenhouse gas polluters in the world because of its heavy reliance on coal to generate power. Coal is also the country's biggest export.

Many scientists say global temperatures are rising due to carbon dioxide and other heat-trapping gases emitted by industry, transportation and agriculture. Scientists have warned that without massive reductions in emissions, melting polar ice caps will inundate islands and coastal areas, certain plant and animal species risk extinction and extreme weather conditions will increase.

"We will be powered into the future with clean energy," said Swan, the treasurer. He said Australia owes it to future generations to produce clean energy.

"I don't know what I will say to our children and grandchildren after 20 years ... that we were afraid of electoral loss? That's not leadership," he said.

Australia's government is not the first in the world to introduce a carbon tax. The European Union, several U.S. states and New Zealand also make polluters pay for carbon emissions.