Jury still out on impact of tax

Tony Abbott visits Boyne Smelter.
Tony Abbott visits Boyne Smelter. David Sparkes

WILL it, or won't it?

That is the question being asked in Gladstone about the fledgling carbon tax: Will it kill Gladstone or not?

The Federal Opposition, including leader Tony Abbott and member for Flynn Ken O'Dowd, believe the new tax will have a devastating impact on Gladstone.

During a visit to Gladstone last year, Mr Abbott said, "(Prime Minister Julia) Gillard's carbon tax could turn places like this into a ghost town."

On his visit to Boyne Smelter last week, Mr Abbott reaffirmed his stance.

"Gladstone is the carbon capital of Australia," he said.

"There are so many major businesses and major employers here in Gladstone that are going to be hit by the carbon tax, but none more so than this major smelter."

Mr Abbott and Mr O'Dowd said Boyne Smelter created, directly and indirectly, thousands of jobs.

Within hours of Mr Abbott's statements, Treasurer Wayne Swan issued his own statement on the issue.

He said Gladstone would continue to thrive, pointing to massive investments in LNG projects.

"Twelve months ago Tony Abbott visited Gladstone and claimed that pricing carbon pollution would turn Gladstone into a ghost town," Mr Swan said.

"Guess what Mr Abbott, far from being a ghost town, Gladstone is an economic powerhouse which is continuing to contribute greatly to our nation's strong economy."

Economics professor John Quiggin from University Queensland believes the tax won't crush Gladstone's economy. "We are seeing a lot of over-heated rhetoric about the impacts of the carbon tax," he said.

He said the real challenges threatening Gladstone's aluminium sector were the strong dollar and global aluminium prices.

Topics:  boyne smelter carbon tax gladstone ken odowd tony abbott

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