Carbon tax is gone: Repeal bills pass the Senate

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The Abbott government says it has not left Australia's environmental policy in limbo with the repeal of the carbon tax and it will push ahead with "plan A" to convince the Senate to support its Direct Action policy.

But Prime Minister Tony Abbott and Environment Minister Greg Hunt have repeatedly refused to rule out a return to a price on carbon in the future, as Mr Abbott described his government as "conservationist".

Australia on Thursday became the first country in the world to abolish a price on carbon, with the Senate passing the government’s repeal bills 39 votes to 32. After two weeks of negotiations, and several false starts, the Abbott government achieved its long-held ambition to axe the tax, to applause from government senators.

Speaking after the vote in the Senate, Mr Abbott rejoiced at the passage of the repeal bills, declaring "today the Parliament finally listened. Today the tax that you voted to get rid of is finally gone."

Mr Abbott said he did not accept that with the carbon price now abolished, and legislation needed for Direct Action yet to pass the Senate, his government was leaving Australia without a mechanism to reduce greenhouse gas emissions.

"We are a government which absolutely appreciates that we have only got one planet and we should pass it on to our children and grandchildren in at least as good shape as we found it," he said.

"So we are a conservationist government and we will do what we think is the sensible thing to try to bring emissions down."

Mr Abbott expressed confidence the government could still find support for its plan to pay polluters to reduce their emissions, despite a hostile reception from Labor, the Greens and crossbenchers to Direct Action.

"What we've seen over the last few days is that just because people will start off with a particular position doesn't mean that they end up with the same position," he said.

Mr Hunt said "we have a plan A and we're sticking to plan A" and the government was not ready to contemplate other mechanisms for implementing Direct Action if it did not secure the necessary Senate numbers.

While Mr Abbott signalled an intention to run a scare campaign on Labor's plan to push for an emissions trading scheme - declaring any price on carbon is a tax – he repeatedly refused to rule out a future price himself.

"Well, what I'm saying is that we've just scrapped the carbon tax, and (Opposition Leader) Bill Shorten is still committed to it," he said.

"Whether it is a floating tax or fixed tax, it is still a tax, and Bill Shorten having said he will terminate the tax now says he will go to the next election saying, there will be a carbon tax under a government I lead'."

Shorten says Labor will take ETS to next election

In an earlier press conference, Mr Shorten did not rule out Labor voting for Direct Action, despite describing the policy as an inefficient mechanism that gives "wads of taxpayer money to big polluters for little likely result''.

He reaffirmed Labor's plan to campaign for an ETS, but said it was "early days" to be locking down what the scheme would look like.

"It's early days for us to be announcing our election policies," Mr Shorten said.

"On Monday I outlined the principles that Labor will apply in terms of developing an emissions trading scheme. We know that water levels are rising.

"We know that 13 of the last 14 years have been the hottest on record.

"We know that heat-trapping greenhouse gases are going to cause and are causing a problem for our environment, so we know that we need to be part of international best practice."

Labor, Greens vote against repeal

Passage of the repeal legislation delivers the policy on which the government staked an election campaign, which ushered Prime Minister Tony Abbott to the head of his party, and which helped to kill the leadership of former prime minister Kevin Rudd and former opposition leader Malcolm Turnbull.

The Abbott government clinched its victory after a rocky two weeks trying to wrangle the new Senate and an unpredictable crossbench.

In the final vote on Thursday, the Palmer United senators, Motoring Enthusiast senator Ricky Muir, Family First senator Bob Day, Liberal Democrat David Leyonhjelm and Democratic Labour Party senator John Madigan voted with the government to repeal the bills, while Labor and the Greens voted against.

The Greens and Labor made impassioned statements against the repeal of the carbon tax before the vote.

Greens Leader Christine Milne condemned the government and crossbench senators for what would be "the legacy of their political career".

As the Senate prepared to dump the tax, Senator Milne declared the vote was a "failure" that would see Australia become a global pariah as other countries marched towards pricing carbon and stronger action on climate change.

Labor senator Lisa Singh said that, with one vote, the nation had moved backwards and "Australia will today be a laughing stock to the rest of the world".

But government senator Ian Macdonald stood to defend his colleagues, and voters who swept the Coalition into power and backed the carbon tax's abolition.

He accused both Labor and the Greens of ''the ultimate hypocrisy''.

''It is the ultimate of hypocrisy for the Greens to say they know better than the Australian public,'' Senator Macdonald said.

''It's typical that the Greens think they know better than anyone.''

Bar some mild applause from government senators, there was little fanfare in the chamber once the bills were passed.

Thursday’s repeal also axed hundreds of millions of dollars in funding for the Australian Renewable Energy Agency, despite the Palmer United Party and Senator Muir signalling they will not vote for the agency’s abolition in a bill to be considered later this year.

Labor, the Greens and the crossbench will also use their numbers to save other major pieces of the Rudd-Gillard government’s environmental infrastructure, including the Climate Change Authority and the Clean Energy Finance Corporation.

Final vote ends chaotic fortnight

The vote ended a chaotic two weeks for the Abbott government, as it scrambled day by day to negotiate with an unruly crossbench.

The first sitting of the new Senate began last week with the government incorrectly assuming the repeal’s passage was assured the moment new senators took their places.

The Prime Minister's office had even prepared its own celebration in anticipation of a speedy repeal last Wednesday afternoon.

But the government was repeatedly blindsided by crossbench senators, culminating in the Palmer United Party using its votes last Thursday to block the repeal and return it to the House of Representatives with new consumer protection amendments.

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