The Clean Energy Future Package legislation passed by parliament today has the potential to significantly increase risks to Australia’s economic growth and competitiveness.

The Business Council of Australia has worked constructively with successive governments to ensure a workable approach to reducing greenhouse gas emissions that will not adversely affect Australia’s competitiveness in the absence of binding global action.

It is extremely disappointing that the parliament has not heeded the council’s calls to include essential safeguards in the legislation and act in Australia’s national economic interest.

The council’s analysis has demonstrated the legislation is based on optimistic assumptions in the Treasury modelling that have not been stress tested.

The lack of safeguards in Australia’s approach is particularly concerning given the uneven pattern of growth in Australia, the increased uncertainty in the global economy, and the lack of progress on international negotiations to put a price on greenhouse gas emissions. The legislation as passed risks placing Australia too far ahead of its competitors in pricing carbon.

The council will closely monitor the state of the global and domestic economies and developments in both the international negotiations and the carbon markets and the implications of these for the implementation of the legislation.

We will continue to discuss with our members the impact of the rollout of the legislation on their competitiveness.

If the assumptions in the Treasury modelling are proved to be optimistic, and the impact on Australia’s business competitiveness is worse than anticipated then the government must be prepared to amend the legislation.

In the meantime we will seek safeguards through the regulations and other means to minimise the risks to the economy.