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Carbon Tax Kills Labour Government In Australia’s NSW

Australian Prime Minister Julia Gillard faces a fight over her plans to tax carbon emissions and mining profits after her Labor party was defeated in elections in New South Wales, the country’s most populous state.

Barry O’Farrell’s Liberal-National coalition ended 16 years of Labor rule, running a campaign that opposed a carbon tax. It inflicted the worst defeat in Labor’s history and reduced the party’s representation in the 93-member lower house of parliament to 19 seats from 50 seats.

“This is doom and gloom for Julia Gillard,” said John Warhurst, a political analyst at Australian National University. “If federal-state relations break down, it will be very difficult for Gillard to get runs on the board — particularly on climate and mining laws.”

O’Farrell’s coalition joined those elected in Western Australia and Victoria states since 2008 that oppose Gillard’s plans to price carbon emissions from next year and place a 30 percent tax on iron ore and coal profits. The three states contribute 67 percent of Australia’s A$1.3 trillion ($1.33 trillion) economy.

“A carbon tax pushes up prices, it threatens jobs,” O’Farrell told Sky News television today. “You can’t support a carbon tax and say you’re trying to reduce costs for families.”

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