THE government's proposed carbon tax is being asked to do a lot.
It's supposed to: (1) reduce greenhouse gas emissions; (2) include "compensation" for some trade-exposed industries; and (3) finance compensation for households. Ross Garnaut also (4) wants it to finance other tax reforms included in the Henry Review, and (5) provide $3 billion a year for low emissions technology innovations.
A cash-strapped government promising to get the budget back into surplus shouldn't promise too much for its carbon tax. Its budget credibility will suffer.
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