'Historic' carbon tax law fuels Opposition

Opposition Leader Tony Abbott. Photo / Supplied

Prime Minister Julia Gillard yesterday won round one of what will be one of her most crucial parliamentary battles with the passage of carbon tax legislation through the Lower House.

Round two, today's debate on asylum-seeker laws, will be far more bruising: defeat in the House of Representatives is a strong possibility and even if Gillard wins there her amendments to the Migration Act will be killed in the Senate.

But the 19 bills comprising the carbon tax package passed in the House by 74 votes to 72 will now go to the Senate next month, where they will succeed with the support of the Greens, who hold the balance of power.

Yesterday's vote was greeted by applause from Labor members and the Greens and independent MPs who pushed the legislation over the line, as Gillard embraced Climate Change Minister Greg Combet and kissed Foreign Minister Kevin Rudd on the cheek.

Rudd failed to introduce climate change laws before his term as Prime Minister was cut short by the coup that installed Gillard as Australia's first female leader, and has since repeatedly been accused of plotting her downfall.

Once passed by the Senate, the laws will come into force on July 1 next year, charging by the tonne for carbon produced by the nation's 500 biggest emitters and covering an estimated 60 per cent of Australia's greenhouse emissions.

Most of the companies targeted by the tax are coal-fired electricity generators, heavy industry manufacturers and miners.

The package accepts cost of living increases will follow the imposition of the tax, with additional benefits and tax breaks compensating for the average extra A$10 ($12.72) per week households are expected to incur.

Combet said the package would allow Australia to seize the economic and job opportunities that would come as the world tackled climate change and moved to a clean energy future.

"These 19 bills ... represent one of the most important environmental and economic reforms in this nation's history." he said.

Conservation Foundation chief executive Don Henry said the legislation came after a decade of people power, and WWF-Australia chief executive Dermot O'Gorman said the move was an historic step towards Australia taking strong action on climate change.

But Opposition Leader Tony Abbott "pledged in blood" to repeal the tax when he won power.

"We must repeal the tax because this is a tax which is going to put up every Australian's cost of living and put at risk every manufacturing job," he said.

"This is a bad tax and it is a total betrayal of the Australian people."

The Opposition is also turning its guns on the two northern New South Wales independents, Tony Windsor and Rob Oakeshott, who backed Gillard.

Both are former conservatives whose seats are being targeted by their former party, the Nationals, heightened by surveys showing most of their voters opposed both the tax and their support for the Government.