Despite having a minority in the federal Lower House, the government seems to have the numbers to make this happen. Bloomberg has the gist:

Gillard Unveils Australia Carbon Tax to Cut Coal
By James Paton - Jul 10, 2011 4:51 PM ET

Prime Minister Julia Gillard unveiled Australia’s first tax on greenhouse gas emissions from July 2012 to reduce dependence on fossil fuels and encourage renewable energy in the world’s biggest-coal exporting country.

Australia expects to raise some A$27.8 billion ($30 billion) in three years by making polluters pay an initial charge of A$23 ($24.74) a ton of carbon dioxide, then lifting the price by 2.5 percent a year, plus inflation, Gillard said today in Canberra. The tax will switch to a cap-and-trade system in 2015, while the plan provides about A$47 billion through 2020 to help households and industries and spur renewable energy.

Gillard, Australia’s least popular prime minister for 13 years, wants to cut emissions in the developed world’s biggest per-capita polluter to at least 5 percent below 2000 levels by 2020. She already has support from the Greens party and the three independent lawmakers needed to pass the program after plans to price carbon and tax profits of miners cost her predecessor, Kevin Rudd, his job.

“This is an ambitious transition plan for the Australian economy -- it’s not just about greenhouse gas emissions,” Martijn Wilder, the head of the climate change practice at law firm Baker & McKenzie, said today by phone. “Australia has been working on this policy since the late 1990s. It’s about time.”

The country, which relies on coal to generate about 80 percent of its electricity, will require about 500 businesses to pay for their pollution under the plan. The government also will more than double aviation fuel excise. The carbon program will increase the annual change in the consumer price index by 0.7 percentage point in its first year, the government estimates.

More Than Europe

“Australia will cut 159 million tons a year of carbon pollution from our atmosphere by 2020,” Gillard said. “That is the equivalent of taking over 45 million cars off the road.”
Power generators facing losses in the value of their assets will receive A$5.5 billion in assistance, Gillard said today. The government also said it will provide loan support to electricity suppliers and payment for the closure of coal-fired plants to remove as much as 2,000 megawatts of capacity by 2020.

While the carbon initiative has “some positive” details for the electricity generation industry, “risks remain for the stable, competitive delivery of secure energy supplies,” Brad Page, chief executive officer of the Energy Supply Association of Australia, said in an e-mailed statement.

“Australia will cut 159 million tons a year of carbon pollution from our atmosphere by 2020,” Gillard said. “That is the equivalent of taking over 45 million cars off the road.”
Power generators facing losses in the value of their assets will receive A$5.5 billion in assistance, Gillard said today. The government also said it will provide loan support to electricity suppliers and payment for the closure of coal-fired plants to remove as much as 2,000 megawatts of capacity by 2020.

While the carbon initiative has “some positive” details for the electricity generation industry, “risks remain for the stable, competitive delivery of secure energy supplies,” Brad Page, chief executive officer of the Energy Supply Association of Australia, said in an e-mailed statement.

Adds Costs

A decision not to allow deferred payments for carbon permits adds costs at a time when many generators would already face reduced cash flow, the industry group said. Power plants would need access to more than A$10 billion of permits, he said.

The A$23 cost compares with allowances that averaged 15.42 euros (A$20.45) a ton during the past 12 months in Europe, which started the world’s biggest emissions-trading program in 2005.

Carbon prices in Australia may rise to about A$32 by 2020 from A$22 in 2015, when trading starts, said Seb Henbest, who leads Bloomberg New Energy Finance’s Sydney-based research team.

“Business should be looking beyond 2015 to the trading phase to understand their long-term liabilities and opportunities,” Henbest said.

Opposition leader Tony Abbott’s pledge to repeal the Gillard government’s planned legislation if he comes to power may be hard to fulfill, as the Greens would likely block such an attempt in the upper house.

The government will provide A$9.2 billion over three years to assist the biggest-polluting businesses such as aluminum smelting, steelmaking and pulp manufacturing. The assistance will be in the form of free carbon permits. The government also will allocate A$300 million to steelmakers to encourage investment and innovation, the government said.

Industry Assistance

Coal mining companies would get A$1.3 billion, with the biggest polluters getting assistance over six years, the government said.

Anglo American Plc said the proposal puts coal investments in Australia and 40,000 industry jobs at risk. Aluminum producers estimate that extra costs they face because of Gillard’s plan will rise to A$400 million in 2020 from A$120 million in the first year, the Australian Aluminium Council said in an e-mailed statement.

Part of the plan includes A$10 billion for the Clean Energy Finance Corp., which will invest in businesses seeking funds to get projects off the ground, according to the government.
A carbon price may help trigger about A$20 billion of investments in renewable energy by 2020, said Kane Thornton, director of strategy at the Clean Energy Council, an industry group. Spending on new gas-fired stations may reach A$14.7 billion through 2016, said Sajal Kishore of Fitch Ratings.

AGL Energy Ltd., the Australian electricity and gas retailer building the A$1 billion Macarthur wind farm in Victoria state, said it supports the introduction of a carbon price as “soon as possible to provide investment certainty.”

The news release was this afternoon (Sunday) and there will be plenty of talking heads by tomorrow morning.

In the meantime, my opinion is that it is far from perfect but far better than no deal at all. It had to satisfy a diverse collection of independents in the Lower House who hold the balance of power, and the Greens, who hold the balance of power in the Senate. Negotiations took many months and as they went on, Tony Abbot, leader of the federal opposition (who apparently believes that he was robbed of victory in the last election), has been doing everything he can to destabilise the government and bring it down.

Perhaps in fact Abbott's tactics were instrumental in getting the deal through. As the Bloomberg report notes, Gillard is the least popular prime minister in many years, and as Samuel Johnson once observed, "Depend upon it, sir, when a man knows he is to be hanged in a fortnight, it concentrates his mind wonderfully." It is almost three years until the next federal election, but if support numbers stay the same, federal Labor will be wiped out.

Or one could observe, as Janis Joplin belted out shortly before her death in October 1970, "Freedom's just another word for nothing left to lose". Or again, looking at the voting bloc that Gillard has somehow cobbled together, one could go with Shakespeare's Trinculo: "misery acquaints a man with strange bedfellows. I will here shroud till the dregs of the storm be past".

Time will tell whether the electoral disapproval storm will pass. Anyway, bar slips, it looks like the deal is done.