The carbon tax will hit NSW harder than any other state on the mainland and cost at least 31,000 jobs, particularly in regional areas, a NSW Treasury review has found.
The analysis shows the carbon tax could cut $3.7 billion from the annual output of the NSW economy by 2020, rising to $9.1 billion by 2030.
The confidential cabinet document shows the federal tax will result in the loss of 1,850 jobs in the Hunter region and 7,000 fewer jobs would be created in the Illawarra. The central west would lose 1,000 jobs.
The analysis is based on Commonwealth modelling and is supplemented by independent analysis by the Independent Pricing and Regulatory Tribunal, Access Economics and Frontier Economics.
The Frontier Economics modelling for Treasury showed a reduction in the annual rate of employment growth of 0.1 per cent each year and a cut in the growth of real gross domestic product of about 0.15 per cent a year as a result of the carbon tax.
The federal Minister for Climate Change, Greg Combet, said the effect on regional jobs reported by the O’Farrell government was based on long-outdated work by a private sector consultancy which did ”not take into account many elements of the Gillard government’s carbon price package, including our $9.2 billion jobs and competitiveness program”.
The NSW government did not respond to the Herald’s questions about why the Treasury modelling appeared not to include potential jobs gained through the development of renewable technology.
The document says the immediate impact of higher prices would cost government agencies at least $44 million in 2012-13 based on federal Treasury estimates. Lower distributions from NSW electricity generators were expected to cut revenue by $45 million this financial year, $215 million in 2012-2013, $150 million in 2013-14 and $290 million in 2014-15.
The government said it was seeking compensation from the federal government for loss of dividends from generators.
The Premier, Barry O’Farrell, said the review showed the carbon tax would slash the growth of many industries, cut jobs and push up prices.
Coal-fired generators and aluminium smelters would be hardest hit, with output expected to fall by nearly half by 2050.
”It is beyond belief that Labor can even contemplate a tax which will tear the heart out of many industries and rob these areas of so many jobs,” Mr O’Farrell said.
Mr O’Farrell said the tax would reduce the NSW mining industry’s growth to about 60 per cent of what it would have been.
Mr Combet said the Treasury analysis was another example of ”Barry O’Farrell jumping on board Tony Abbott’s unprincipled scare campaign”.
”Federal Treasury modelling shows employment will continue to grow under a carbon price, with an extra 1.6 million jobs being created nationwide by 2020,” he said.
