Carbon Tax to reduce Unemployment

Henry Ergas claims in an article in The Australian today that unemployment will fall as a result of the government's carbon tax.

The article, oddly entitled "Black hole in government's carbon tax compensation plan", Henry Ergas explains "A carbon tax increases prices relative to wages. As the Ross Garnaut report acknowledges, that reduces incentives to work, which are already blunted by the income tax. With reduced work incentives lowering labour supply..."

What this in fact says is the carbon tax will cause unemployment to fall.

The unemployment rate is a measure of the number of people seeking employment who are not able to find work. When the number of people seeking work declines, the unemployment rate goes down.

Henry Ergas argues that the introduction of the carbon tax will lower the labour supply, which means there will be fewer people looking for work.

Tony Abbott does "Hanrahan" for Doorstop Interview

Said Tony Abbott -
"The Coalition has been saying now for a long time, that Julia Gillard’s carbon tax will destroy the coal industry. That’s not the only industry it will destroy. It will destroy the steel industry, the cement industry, the aluminium industry, the motor industry."

SAID HANRAHAN

"We'll all be rooned," said Hanrahan,
In accents most forlorn,
Outside the church, ere Mass began,
One frosty Sunday morn.

The congregation stood about,
Coat-collars to the ears,
And talked of stock, and crops, and drought,
As it had done for years."

by John O'Brien

Menzies House, June 25 - Global Warming is by No Means a Settled Issue: US Supreme Court

Andy,
You are missing the point on why government is sometimes required to take precautions against potential threats.
For example, in the 2003 Canberra bushfires it was not a settled fact that fires that had been burning for 4 weeks would combine then rage through Canberra suburbs, destroying 500 homes and killing 4 people. The government decided that as the potential threat was not "settled" it would not alarm the population by issuing warnings or arranging evacuation centres. Lives were lost and many people were injured and traumatised in the chaos that resulted from government inaction.

Tony Abbott's Daily Telegraph Blog on Friday, 24 June 2011

Talking down an economy by looking for the cloud around a silver lining is not in Australia's interest.

The carbon tax is only a minor contribution to energy price increases. (See the Electricity Prices Fall web page in which a range of background information is collated.)
The carbon tax will encourage and benefit a number of industries.
Here is just one example: Coal gasification with CO2 sequestration can be a major new industry, generating jobs, investment, and technology exports.

Carbon Capture and Storage

Electricity prices to fall

Biomass - does it need an image makeover?