Even as opinions are divided over the feasibility of such a measure, fissures have already emerged within the Australian polity over the imposition of the controversial carbon tax from July 1 this year.

The New South Wales (NSW) government has opposed the introduction of the carbon tax by the federal government led by Prime Minister, Julia Gillard.

In reply to queries posed by The Hindu, NSW Minister of Resources and Energy and Central Coast, Christopher Hartcher said the NSW government does not support the introduction of the carbon tax by the federal government. “The government is concerned about the impact on cost of living for NSW families and businesses. The carbon tax and other green schemes are expected to add around $315 to a household electricity bill in 2012. The NSW is calling on the Commonwealth to close its renewable energy target when the carbon tax commences to reduce duplication and minimise price increases for electricity consumers,’’ Mr. Hartcher remarked.

Mr. Hartcher also announced that his government will close its carbon reduction scheme when the carbon tax commences from July 1. In contrast, Australia’s Minister for Resources and Energy, Martin Ferguson told visiting journalists from South Asia that imposition of carbon tax was absolutely justified as it was being imposed on coal and iron ore.

“The people of Australia have energy right to take a part of the profits made by the companies engaged in exploration of such activities. The money will be used for development and other works for the people of this country,’’ he remarked.

Asked if the imposition of new tax will make coal prices competitive and unviable for exports, Mr. Hartcher said the competitiveness of this sector is critical and the NSW government is reviewing its planning and regulatory processes to ensure that the development of the sector can proceed in line with export needs. “The coal sector is very important for NSW. Its makes up more than 80 per cent of the resources sector in the State. Coal production, valued at about $16.3 billion in 2010-11, was the largest in the mining sector. There is significant amount of foreign investment occurring in the resources sector and also in the area of energy. The NSW coal sector is very dependent on offshore capital for development. We are seeing companies from China and India like Shenhua, Yancoal and Gujarat NRE allocate significant amount of capital to projects in NSW,’’ he added.

In 2011 Australia exported 290 million tonnes of coal - 140 Mt metallurgical and 143 Mt thermal. NSW accounted for nearly 121 of these exports. Around 4 Mt per annum is exported to South Asia, of which 3.5 Mt is for India, 200,000 tonnes to Pakistan.

Officials here said that the Indian consortium led by Steel Authority of India (SAIL) was in the advanced stages of talks through an Australian company for acquiring coal assets in NSW and Queensland.

The International Coal Ventures Limited (ICVL), comprising of NMDC and Coal India Limited is awaiting government approvals for its coking coal acquisition in Australia. Interestingly, an Indian Steel Ministry team had last year visited Australia hunting for assets, but a final word of their visit is still awaited by the NSW government.