Are carbon taxes (another) Australian 'magic pudding' policy?

Second, do the politics of a new tax militate in favour of an ineffective (ie, very low carbon price) emissions policy? Won't this mean more consumers can be compensated, (and conversely for an effective policy)? If so, why should Australians accept a new ineffective tax?

Third, whatever the effectiveness of the carbon tax, if all consumers will be compensated, how will this be financed, and how will other tax reforms be paid for? What new Budget savings are being developed?

These questions apply to, and also beyond, 1 July 2012.

If real emissions taxes are increased over time, whether by 4% per annum or any other amount, the same questions arise on every such occasion.

Several policy objectives are being mixed up in the 'selling' of the Government's carbon tax. Its primary purpose – reducing emissions – seems in serious danger of being lost to other policy agendas.