The former Labor government, while introducing a price on carbon, said the move would help slash emissions by 160 million metric tons by 2020. It offered voters billions of dollars in compensation through tax breaks and welfare payments for increased costs stemming from one of the most dramatic reforms ever attempted in the energy-reliant economy.
But after the global financial crisis took hold in 2008, followed by the end of a decadelong mining boom in 2012 that slowed growth and employment in the A$1.5 trillion (US$1.4 trillion) economy, Australian voters turned against climate laws—recognized by the International Energy Agency as model legislation for developed countries—blaming them for rising energy bills and living costs.
The World Bank in May produced a State and Trends of Carbon Pricing report counting carbon pricing programs in 40 nations and 20 regions worth a collective US$30 billion, while also singling out repeal plans in Australia as one of the biggest international threats to the rollout of similar programs elsewhere, given its example.
However, implementation of the carbon tax and other emissions laws proved costly for the then-incumbent Labour Party. Former prime-minister Kevin Rudd was unseated in an internal party challenge from Julia Gillard as his approval ratings plummeted due in part to proposed Resource Profits Super Tax which would've levied a tax of no less than 30% on mining companies should their annual profits pass an annual A$75 million threshold.
As leader of the opposition party, Tony Abbot warned the Australian federal government against spending millions of taxpayer dollars for an ad campaign in support of the Carbon Tax in 2011. During the 2013 elections, Abbot campaigned against Labour's carbon tax scheme, saying it increased energy costs and hurt small businesses.
According to 2011 figures from the US Energy Information Administration, Australia is the world's largest exporter of coal and 4th largest exporter of LNG. The demise of the Resource Profits Super Tax also is likely to increase investment and exploration in the Coober Pedy area of the Australian outback, which is believed to hold as much as 200 billion barrels worth of oil according to multiple reports from last year.