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Labor's climate policy will cost business billions: Cormann

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Labor’s plans to take action on climate change would force Australian businesses to shell out $25 billion in the coming decade, according to the coalition.

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The cost would come from companies being forced to purchase international offsets when they can’t meet their emission reduction targets through productivity changes, the government argues.

Finance Minister Mathias Cormnann has spruiked the figure as Labor leader Bill Shorten remains under pressure to give a clearer sense of the economic impact of his party’s climate plans.

“It is the best available estimate given what Labor is willing to put out into the public domain,” Cormann told ABC Radio National on Thursday.

The opposition has proposed a target to cut emissions by 45 per cent by 2030, compared to 2005 levels, and would allow companies to buy international offsets if they need to.

The coalition’s target is for a more modest 26 per cent reduction.

A day after refusing to answer questions on the economic impacts of Labor’s climate and energy policies, Shorten on Wednesday said they won’t cost the economy but will help it to grow.

He pointed to findings by ANU economist Warwick McKibbin that under both the coalition’s target and that proposed by Labor, Australia will rack up 23 per cent worth of economic growth through the 2020s.

“Our economy is going to grow, I don’t accept the characterisation that it’s a cost,” he told reporters in Perth.

BAEconomics has estimated the policy will cost the economy $472 billion but Mr Shorten said he doesn’t expect the price of international offsets to be “anywhere in that dimension”.

The coalition’s $25 billion estimate of the cost of businesses buying offsets relies on a series of assumptions, including that the offsets would cost an average of $50 a tonne.

But Cormann says it has worked within the policy settings Labor has put forward.

“Given that they are not properly answering questions, we’ve got to come up with the best possible estimates based on the information that is out there.”

Labor frontbencher Anthony Albanese says the businesses would benefit from his party’s policies because they will give them certainty after years of shifting climate proposals under the coalition.

“Business will tell you that what we need is certainty. That’s what Labor will provide,” he told Sky News.

-AAP

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